The 5 traits of agile, future-ready companies

When Richard Mahoney became Mon­san­to Company’s CEO and chair­man in the 1980s, he didn’t like where the com­pa­ny was heading.

“The core of Mon­san­to was in seri­ous jeop­ardy, and it was sub­ject to the swings in oil prices,” he wrote in the book, Tough Calls from the Cor­ner Office.

He want­ed the com­pa­ny to be in charge of its own future, its prof­its unteth­ered from com­mod­i­ty prices. So, he set out to remake the com­pa­ny, imple­ment­ing a series of dra­mat­ic busi­ness moves such as pulling out of the chem­i­cal busi­ness and mov­ing into the life sci­ences, agri­cul­ture and phar­ma­ceu­ti­cals arena.

“If there’s one thing I’ve learned in busi­ness, it is that you have to con­tin­u­al­ly remake your­self,” he wrote.

It was a lone­ly jour­ney. He had to stick to the vision he had defined for the com­pa­ny and keep “Wall Street at bay”. As he threw mon­ey into research and devel­op­ment, and new busi­ness­es, Wall Street accused him of mak­ing fool­ish deci­sions. Their nick­name for him? “Prof­li­gate Spender”.

How­ev­er, by 1995, Mahoney’s patience and deter­mi­na­tion paid off. The com­pa­ny reached 20% return on equi­ty and had a whole range of agri­cul­tur­al prod­ucts and their first phar­ma­ceu­ti­cal product.

He retired to teach soon after, hap­py to leave the com­pa­ny bet­ter than it was when he started.

Mahoney didn’t like where Mon­san­to was going and made the tough call to turn the cor­po­rate ship around so that it could thrive in the future.

Most busi­ness­es know that they need to be more agile and change to meet the chal­lenges of the future. But mak­ing that hap­pen has always been challenging.

So, why do organ­i­sa­tions like Mon­san­to (acquired by Bay­er in 2018) suc­ceed when oth­ers fail? It’s because they have the fol­low­ing characteristics:

1. Vision­ary leadership

Mahoney’s sto­ry illus­trates how impor­tant it is for an organisation’s lead­er­ship to define the vision of suc­cess and then guide the com­pa­ny towards the new direc­tion. The jour­ney is often lit­tered with pot­holes and naysay­ers, but lead­ers need to stay true to their vision to the end to reap the benefits.

Often, as in Monsanto’s case, a change ini­tia­tive may take time to pro­duce fruit. The key is to stay the course.

“Lead­er­ship must define and com­mu­ni­cate the need and vision so that the action plan can be co-constructed and owned by the whole organ­i­sa­tion. That are the pre-requisites for a suc­cess­ful and sus­tain­able ini­tia­tive,” says Flip De Herdt, Renoir’s Oper­a­tions Man­ag­er (Mid­dle East). 

“If any of these ele­ments are not clear­ly defined and com­mu­ni­cat­ed, there may be greater resis­tance to the new direc­tion, which can affect the suc­cess of the busi­ness transformation.”

2. They know where they want to be … and they get there

When Net­flix CEO Reed Hast­ings decid­ed to change his then-small DVD rental busi­ness into a video stream­ing plat­form, he dili­gent­ly pre­pared the way to ful­fill his vision.

First, he spent 10 years research­ing video stream­ing,  spend­ing up to US$10 mil­lion a year on the effort, report­ed Forbes. He was not afraid to fail. He exper­i­ment­ed with small projects and moved on quick­ly if they failed.

Lead­ers like Hast­ings have a clear under­stand­ing of the strengths and weak­ness­es of their organ­i­sa­tion, and then they cre­ate a strat­e­gy to bridge the gap between where they are and where they want to be.

This takes courage. Hast­ings was will­ing to attack his company’s core busi­ness mod­el to reach some­thing better. 

“Organ­i­sa­tions must ask them­selves: If we want to bridge the gap to our goals, what changes must we make to our process­es, man­age­ment sys­tem, struc­ture, knowl­edge and behav­iors of our peo­ple to get where we want to go? This way, we can have a clear plan to achieve our goals,” says De Herdt.

Today, Net­flix adds 10% more sub­scribers a year. When the COVID-19 pan­dem­ic swept across the globe, it was ready for the mil­lions of view­ers stuck at home. From Feb­ru­ary to April 2020, it raked in 15.77 mil­lion new sub­scribers glob­al­ly, dou­bling the num­ber of its pro­ject­ed sev­en million.

3. Proac­tive, not reactive

“If an organ­i­sa­tion only starts work­ing on change when dis­rup­tion hits, they’re too late,” says De Herdt.

Instead, organ­i­sa­tions should start build­ing their change capa­bil­i­ty now so that when dis­rup­tion hits, they’ll be able to change quick­ly to over­come it.

Mon­san­to and Net­flix did not wait for indus­try trends to catch up to them before remod­el­ing their busi­ness­es. They began their busi­ness trans­for­ma­tion ear­ly, method­i­cal­ly plot­ting towards a bet­ter future.

Dur­ing tur­bu­lent times, organ­i­sa­tions that are reac­tive to dis­rup­tions will suf­fer if their com­peti­tors take proac­tive actions and leap ahead of them, leav­ing them in the dust.

4. They have a cul­ture of con­tin­u­ous improvement

Agile, future-ready com­pa­nies are not afraid of shak­ing things up and seek­ing out oppor­tu­ni­ties to improve.

This requires a dif­fer­ent mind­set, one that is not afraid of fail­ure and looks for­ward to try­ing new things.

“Some things will work and some things will not work. And when things do not work, it should not be thought of as a fail­ure. Instead, think of it this way: you’ve found some­thing that does not work so that you can find some­thing that does work,” says De Herdt.

Netflix’s Hast­ings was not afraid to fail, change strat­e­gy and exper­i­ment. Lead­ers like him believe that fail­ure is a chance to dis­cov­er a bet­ter strategy.

“We … had to be ready at any moment to cast aside our plans, admit mis­takes and embrace a new course,” said for­mer Net­flix Chief Tal­ent Offi­cer Pat­ty McCord in her book, Pow­er­ful: Build­ing a Cul­ture of Free­dom and Respon­si­bil­i­ty. “The com­pa­ny had to per­pet­u­al­ly rein­vent itself – first fig­ur­ing out how to keep our DVD-by-mail busi­ness thriv­ing while simul­ta­ne­ous­ly throw­ing our­selves into learn­ing how to stream; then mov­ing our sys­tems to the cloud; then begin­ning to cre­ate orig­i­nal programming.”

5. They’ve mas­tered the blue­print of change

Goals will not be realised if a com­pa­ny does not pos­sess the change capa­bil­i­ty to exe­cute the vision.

Com­pa­nies that thrive in the future have “trained” for change because they are con­tin­u­ous­ly improv­ing, tweak­ing and refin­ing themselves.

With each trans­for­ma­tion pro­gramme, the organ­i­sa­tion gets bet­ter at change man­age­ment. As a result of this, employ­ees have more trust in future initiatives.

“Organ­i­sa­tions that are suc­cess­ful in change have built an inter­nal track record. And if some­thing else kicks in they will pick that up and say, we can do this. We have proved it,” says De Herdt.

Learn the suc­cess­ful change man­age­ment tac­tics of agile and future-ready com­pa­nies from our free white paper, Future-Ready, Agile organ­i­sa­tions: The Win­ning Blue­print for Change. Down­load now.