It’s not your imagination. The speed of business is increasing exponentially.
We have entered the Great Acceleration — a time of unprecedented change happening at breakneck speed. Whole industries are being remade in a comparative blink of an eye.
Consider smartphone ownership: 35 percent of Americans owned one in 2011, which soared to 96 percent by 2019. In contrast, it took 75 years from the invention of the telephone until 100 million people owned one.
Online video streaming is another example. In 2004, Blockbuster Video had 9,000 stores. But management was slow to recognize that video consumption habits were changing. Executives even rebuffed an offer to buy a then-struggling Netflix for a bargain price of $50 million. Blockbuster’s last corporate store closed in 2014. Netflix is now a Wall Street darling.
A final example: Coal generated the bulk of the U.S.’s electricity needs for centuries. But in 2019, renewable energy sources surpassed it for the first time — a development that happened so quickly, even industry experts were surprised.
Health care diagnostics, education, customer service, insurance and automobiles are some of the industries that are ripe for drastic change.
The Fortune 500 list also testifies to the Great Acceleration. Fewer than 11 percent of Fortune 500 companies in 1955 remained on the list in 2018. But this will seem slow from the vantage point of the future. Experts predict that about 50 percent of the current S&P 500 will be replaced over the next 10 years.
Welcome to the Great Acceleration. It’s just started.
Reinventing the organization for the Great Acceleration
We have been watching how the Great Acceleration is reshaping businesses and leadership. Here are some of our observations.
The corporate model of centralized, hierarchical decision-making is increasingly looking archaic in a world moving at blistering speed. A bureaucratic structure and the command-and-control leadership style slowed down decision-making and innovation. These shortcomings were apparent in the early days of the COVID-19 pandemic, when flatter organizations pivoted more successfully. A new model is emerging: One with more distributed decision-making at the peripheries of the organization. It’s an approach that lets companies be agile instead of reactive.
Effective managers are essential to moving quickly. They accelerate their people’s performance by setting well-defined goals and providing them with the direction and support they need. Good managers also improve employee morale and workplace efficiency — a key to corporate agility. For how can companies be agile when they are weighed down by struggling managers, unhappy employees and poor productivity?
Continuous innovation is another requirement in the Great Acceleration. Furthermore, how sustained innovation happens must be reconsidered. It is not a top-down approach driven by executives on the upper floors. Breakthroughs occur when managers and individuals make incremental improvements with customers in mind.
The smartphone is a perfect example. It may seem like a single disruptive innovation, but it was actually the product of thousands of small innovations done by those people closest to the work. And managers are in the best position to ignite or extinguish the flame of innovation.
Creating a culture that promotes collaboration and communication is also essential if a company is to flourish in the Great Acceleration. Consider how much time is wasted in the typical business because people have different agendas. Because they view the goals of others as unimportant. Because they are unclear on the overarching objective. Lack of candor, fear of pointing out a problem and resistance to brainstorming dooms an untold number of projects that could have transformed an organization.
A safe conclusion: Companies with dysfunctional cultures can’t compete over the long haul. Cultures where people support each other’s goals, trust each other and communicate open-mindedly and candidly move much faster and win the race.
People also must have leaders who create a supportive environment characterized by trust and psychological safety. They need leaders who provide the right support and direction when they need it. Only then can collaboration and creativity flourish.
But how do you help employees realize their potential and, as Ken Blanchard says, “bring their brains to work?” This happens when managers care about their people, encourage their development and help them succeed.
Five traits of the new leader
An incisive quote from Gallup Research points to one of the ways to succeed in the Great Acceleration: “The quality of the managers and team leaders is the single biggest factor in your organization’s long-term success.” Further Gallup research finds that managers account for at least 70 percent of variance in employee engagement scores across business units.
Blanchard’s research amplifies these findings, showing that leaders are the critical link between organizational vitality and employee work passion. A positive relationship reaps many important benefits, including employee passion, customer devotion and organizational vitality.
Here are five strategies leaders can employ to meet the challenges of the Great Acceleration:
Leaders must adapt their leadership style to every situation. A one-size-fits-all leadership approach really never worked. And it’s self-sabotaging in the Great Acceleration. Leaders must give their people the support and direction they need by adapting to the demands of the moment. In short, they must lead situationally.
Leaders must develop their people so they reach peak productivity. Every employee deserves to be amazing, and the Great Acceleration demands that companies must help all employees unleash their potential. This means that leaders must guide people to projects that build their skills, help them become successful and self-reliant in their roles, and have inspiring career development conversations.
Leaders must set goals dynamically. When conditions are stable, goals don’t need to change that often. But when conditions are changing rapidly, leaders are better served by setting shorter-term goals and revisiting them frequently. This requires leaders who are more flexible and agile, and willing to change their people’s goals regularly. If leaders aren’t changing goals and canceling projects, they are probably doing something wrong.
Managers must run experiments continuously. Many employees adopt a wait-and-see attitude toward innovation and change. To counteract this, leaders should role-model risk-taking and experimentation and encourage others to do the same. They should involve all their people in creative problem-solving and change initiatives, and they should track experiments and celebrate both successes and failures as necessary parts of the process. When all leaders encourage incremental innovation, the organization sprints on 1,000 feet.
Leaders must develop relationships built on trust and candor. Pivoting is impossible if trust is absent. Creativity and collaboration also wither when there is lack of trust. The pandemic has proven that inspiration can come from all quarters. Every employee can contribute when the environment encourages it. It rests with leaders to create a culture where people know their ideas will be heard and respected.
The changes being brought on by the Great Acceleration have just begun. But despite all the uncertainty, there are principles and skills that will allow companies to thrive.
