Many organizations are stuck. They’re held captive by the status quo. Confronted by an existential threat or opportunity, they remain frozen and unable to act. Successful organizations on the other hand are able to see a challenge and react quickly. They mobilize, improvise and innovate much faster than their competitors. Agility is now an essential survival skill in a world of constant change.
Companies face devastating competition today. In 1960, S&P 500 companies had a lifespan of about 60 years. By 2013, firms were barely expected to survive 15 years. The trend continues. Accelerating change and relentless competition ensure that no business model remains viable for very long.
The ability to innovate is now a critical competency that can be honed in three ways:
- focusing collectively on a shared challenge
- enabling everyone to contribute fully based on their own unique gifts and skill
- finding more effective ways to work together
Challenge-driven organizations concentrate their energy on the threats and opportunities where solutions are needed most. Challenge is a powerful attractor. It elevates our aspirations and focuses our attention in ways that make impossible goals achievable. It mobilizes the collective intelligence of an organization, overcomes barriers, and creates breakthroughs.
Traditional management systems work well in stable environments but they are far less effective in the face of instability. Purpose-built to exert control, they ensure reliability and maximize efficiency, but fail when an organization has to respond to unexpected shocks and unpredictable change. They predefine roles, constrain how new ideas are acted upon, restrict how decisions are made, and limit the ability of people to contribute. They put tall fences around an organization’s ability to innovate.
Challenge-driven organizations free people up, by creating a dynamic problem-solving environment that draws on diverse perspectives and involves people from the whole system. Skills and insights are more important than an individual’s formal role. The result is a supercharged engine of innovation.
While each of the three factors is important, the way people relate to each other is the most critical. Dialogue creates fertile ground for collective problem solving and collaboration. In traditional organizations, people tend to fall back habitually into debate mode, where they are invested in defending entrenched positions and protecting roles. Voices are silenced and promising ideas are lost forever.
Challenge-driven organizations unleash the power of thinking together – reframing problems, gaining new insights, and seeing new possibilities. They create a hospitable space where innovation and agility emerges.