In a rapidly developing global economy, knowledge workers hold the key to competitiveness. These high-performing employees thrive on innovating from a foundation of data, insight and experience, and provide a clear and distinct advantage to companies that best inspire them.
Yet traditional models for business, where companies ask skilled employees to extend their capabilities to more and more areas, fail to create the type of corporate ecosystem where knowledge workers thrive – or to deliver the agility that organisations need in today’s fast-moving markets.
To innovate successfully, businesses must give knowledge workers the tools they need to turn information and ideas into a tangible edge. This can be achieved by focusing on three priorities: cultivate – don’t cut – the workforce; build a supportive ‘spoke and wheel’ model; trust knowledge workers to execute decisions fast, ahead of the market.
Cultivate – don’t cut – the workforce
During the downturn, many organisations made sweeping cuts to the workforce and capital equipment. But PA’s Managing Uncertainty survey shows that extreme downsizing and the struggle to do more with less actually contributed to lower productivity, degraded quality and a dissatisfied workforce. Now, as growth begins to pick up, these companies find their lack of infrastructure is holding them back.
By contrast, the Managing Uncertainty survey shows that companies that engaged and enabled their staff during the downturn enjoyed higher Total Shareholder Return (TSR) and had more confidence in the decisions they made. As the economy recovers, companies that emphasised innovation and supported the workforce are well positioned to make significant gains.
Instead of focusing on traditional levers to restructure teams and cut costs, business leaders must recognise that people are the key to an invigorated company. The shift to a model that puts innovation at the centre of corporate ambition is key to recapturing a leadership position in global markets.
Build a supportive ‘spoke and wheel’ model
The key to attracting and retaining the best knowledge workers, and to making them more productive, lies in ‘hyper-specialisation’. This involves creating networks of hyper-specialists, who can be tapped for their distinct skills, in order to free knowledge workers to contribute at higher speed, better quality and lower unit cost.
This model, in which knowledge workers are the hub of the wheel and hyper-specialists are the spokes, generates value more effectively than a model built on individual business units. The ‘spoke and wheel’ model shifts analysis away from corporate divisions and processes, allowing for a focus on employees and how they can be most productive.
Move fast and trust your knowledge workers
The ability to keep pace with rapid change in global markets is essential to success. Organisations must be agile enough to seize new opportunities as they emerge.
By implementing a ‘spoke and wheel’ model, companies can eliminate the time lapse that occurs between information and action in traditionally structured organisations. The new model involves, for example, replacing the annual budgeting cycle, with its emphasis on cost cutting, with a more frequent ‘learning cycle’, which informs executives of the impact of recent decisions and shows them where to direct their immediate attention.
PA’s Managing Uncertainty survey revealed the effectiveness of this approach. Companies that turned rolling budgets into scenario-planning exercises stayed close to the marketplace and maintained an opportunistic readiness. In fact, companies that made scenario planning a priority consistently delivered higher TSR than those that stayed locked into traditional methods.
To find out how PA can help your business gain speed and innovation in the new economy, contact us now, please contact us.