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Thriving in a persistent transformation context

EDIVANDRO CARLOS CONFORTO AND JULIANA MENDES

Almost two years after the first case of COVID-19, and a lot has changed in our lives and in many organizations across the globe. What had seemed impossible, like asking all employees to work from home, in some organizations became a reality in just a few weeks. What made such a radical shift possible so quickly? To a certain degree, it was those who were best prepared in terms of an agile operating model, technology adoption and processes, that were able to quickly mitigate some of the negative impact caused by the pandemic restrictions.

For example, at Accenture China, we distributed over 80,000 desktop computers within a week to the homes of staff.¹² Thanks to a clear plan, the company was able to make this shift quickly and fully embrace a work-from-home operating model.

Many organizations had to review their strategies to overcome the crisis. The difference between those organizations that will thrive after the pandemic and those that will struggle lies in the organization’s capability to deal with a persistent transformation mode.

Fast forward one year and discussions have begun about returning to the office. Another massive change lies ahead of us. What will it look like? What should we expect in terms of productivity? What is the right balance between home and office working? In just two years, organizations have had to “transform” themselves more than once.

In this article, we share recommendations to help leaders prepare their organizations for the state of persistent transformation.

There are several elements to this:

Build a hybrid environment

First, organizations need to build a hybrid environment. The pandemic forced many firms to break their traditional boundaries to allow people to work from home. Now, having seen the positive results, many firms are rethinking the purpose of working at the office. Research suggests people’s expectations are changing about what is coming and what we might expect when we are all able to return to work safely.

In one recent study, for instance, eight out of ten workers from different industries said a hybrid model would be optimal.¹³ Unfortunately, the reality is that most HR policies are based on in-person work prior to COVID-19, and 90 percent of the global workforce was onsite. When it comes to going back to regular work, people seem to want a different approach (see Figure 1, A and B).

Figure 1. People’s perception about what they want at the office and remote. Source: Accenture Research — The future of work: Productive anywhere, 2021. (% of people who strongly agree, sample size 9,326 respondents).

Looking at the top priorities listed in the figures above, it is clear that one of the main challenges for those who want to work remotely as well as those who are willing to work from the office, is how to create a ‘hybrid environment’ where people can enjoy the benefits of both work models.

One strategy is to develop ‘adaptive spaces’ to foster connections, help teams collaborate, innovate and experiment, combined with a digital approach that will allow workers do their job from anywhere.¹⁴

From a management perspective, hybrid management models have emerged to help organizations cope with innovation and dynamism, while at the same time balancing discipline and predictability. Leaders are recognizing the importance of combining different management approaches to deal with the diversity and complexity of their strategic initiatives. With the limitations and restrictions caused by the pandemic, teams had to find new ways of interacting and collaborating to keep productivity at the same level as before.

But how can organizations raise the maturity level of their workforce to sustain and even ramp up productivity? Intelligent working models have come to light to help balance the adoption of technology, methods, practices, and processes enabled by a great cultural change. On top of that, discussions about incentives have also emerged. More than ever, it is necessary to review the metrics, compensation, benefits, and the whole incentive model to give people a strong foundation to align their purpose with the company’s goals and objectives. The goal of adopting a hybrid management model is to combine what works best for the business needs, leveraging different frameworks and tools and, most importantly, align the business needs and challenges with people’s purpose and expectations.¹⁵

Here are some recommendations to build a hybrid environment:

• Design your own strategy for the post-pandemic context. Consider different scenarios and manage all potential risks to avoid surprises and keep operations running smoothly while transitioning to this new normal. Initiate a transition period to new workspaces as well as roles.
• Consider implementing an intelligent operating model to align with the needs of a new scenario. Don’t simply copy, but use frameworks and tools as a reference (e.g., agile, adaptive, iterative), and make sure you define some boundaries to indicate which type of activities can be executed remotely and which should be completed in person. Be mindful about the differences in the incentive model for each scenario.
• Define clear business objectives, to allow the business vision and strategy to permeate from top to bottom to increase the transparency and discretionary decision making at all levels of the value chain, allowing autonomy and decentralization of decisions. An intelligent model will help leaders to build autonomy with accountability.
• Make sure the organization provides the technology required for the hybrid operating model. Building people’s technology literacy will help workers deliver the best result no matter where they are. Focus on building the right level of maturity so teams will choose the best approach to do their job.
• Leadership must be transparent about the challenges and genuinely listen to their team, who typically knows where the friction and challenges are. This journey will require leaders who are open to learning and able to adjust as they go along.

Make agility pervasive

It is undeniable that COVID-19 forced leaders to think differently about the changes needed in their organizations — from the changes in the workforce to the urgency of dealing with climate change. What we have seen is a rush toward digital transformation and innovation.

Some leaders tried to recover the years they did not act toward transforming their organizations and the underinvestment in technology, organizational modernization and new ways of working. Most organizations today need business agility capabilities to be able to consistently anticipate, adapt and accelerate to respond to change. Several studies have reported the business benefits of adopting agility at all levels, including better financial performance, long term and sustainable growth, innovation, resiliency, flexibility, customer satisfaction, people culture and behavior.

In 2015, research from MIT revealed evidence about the use of agile practices to develop agility capabilities across different areas and in different industry sectors.¹⁶ From the product level up to the ecosystem level, it is essential to develop agility capabilities to cope with changes in people behavior, product requirements, operations objectives and goals, and business strategies.

To make agility pervasive, leaders need to understand the essence of agility which can be summarized in three main aspects.¹⁷ First, agility has different and multiple dimensions (see Table 1 as an example). Second, agility is a capability, not a method: just adopting a framework or method will not automatically turn your organization into an agile powerhouse. Third, agility is dependent on multiple factors, which, depending on the business context, may include culture, incentives, organizational structure, governance, budgeting strategy, team configuration, access to technology, and so on. Simply copying frameworks from successful cases may not work for your organization.

Table 1. Dimensions of Agility. Adapted from Conforto, et al., 2016.6 ¹⁷

Regardless of the dimension of agility, those organizations that have mastered agility are organized around value chains. And this is a big change in the way a business is structured, especially for those organizations that are more traditionally organized around business functions.

Although some organizations have reaped the benefits of agility, many others still struggle to make agility a strategic topic and adopt it on a scaled level. Due to the pandemic, organizations have accelerated the adoption of agility capability, but not all have mastered it. Just one third of the organizations studied, according to recent report, have already adopted an agile workforce strategy at scale.¹⁸

So, if you are the leader of a large enterprise, there are a few questions to help you understand where you are on this journey. Is agility on your priority list? Are you discussing agility with your leadership consistently? Are you adopting agility at scale (from the product level up to the strategic level)? Do you consider agility as an enabler to deliverables or results?

To make your agility capability pervasive, we recommend the following steps:

• Agility is driven by common principles: define a set of common principles that will guide the behavior of teams, and teams of teams: for example, collaboration, autonomy, continuous learning, transparency, purpose driven, etc. It is essential to adopt intelligent operating models that promote collaboration and experimentation. Encourage efficient, top-down, bottom-up communication.
• Connect with strategy: objectives should be driven by strategic goals and measured by customer value. Some competencies combined with agile methods are useful in the search for quick responses regarding potential business benefits. Another key success factor is to adopt the lean portfolio management approach to balance investment between business as usual and innovation, in addition to implementing techniques for dynamic budgeting. It allows companies to make faster and more assertive decisions to escalate or pivot in short learning cycles.
• Scaled by design (not only by IT capability): adopt a top-down and bottom-up approach. Think holistically and include all areas of the organization in the agile transformation initiative. To implement, start small and scale fast. Focusing on continuous learning, experimentation and a data-driven approach will provide the best transformation ROI. Speed is critical, as are consistency and clear benefits. Setting up a Business Agility Center of Excellence may help align key stakeholders around common purpose and goals.
• Connect with the business ecosystem: with the democratization of data, experience-led transactions, changes in financial market and regulations around the globe, the balance of the business ecosystem is changing. This trend opens new possibilities for collaboration. As a result, new incentives outside the corporation’s borders become increasingly powerful. It is essential to understand the business ecosystem and encourage new ideas to remain competitive and make the right partnerships.
• Measure continuously: if you don’t measure you cannot improve or, worse, you cannot prove benefits. Adopt data analytics from the portfolio level down to the product development level. Digitally-enabled metrics, which are evidence-based, will help leaders make better investments and understand the causal relationship between business results and agility capability.

Leverage technology as a service

Technology adoption is one of the factors that enables a hybrid environment, as it supports and enhances business agility development and performance. One way to look at technology now is from a business disruption standpoint. Every business depends on technology or will be a technology business in the near future. Therefore, it is crucial to understand how technology is driving transformation in your business sector.

To put this into perspective, a study of 10,000 companies across 18 industry sectors and over 10 million datapoints indicated the level of disruption in some sectors, many of those impacted by technology advancement. To some extent, banking, insurance, retail, and many others are more likely to deal with persistent transformation, as their strength has become their weakness, and disruptors are constantly finding new sources of value (Figure 2). During the pandemic, retail for example, was deeply impacted, with people unable to go shopping in person. Those retailers that had not adopted the right technologies or started their digital transformations were caught unprepared to deal with the massive changes.

Disruptability Index Industry Sector Matrix — 2018 results

0-1 scale (1 = most susceptible/disrupted)

Figure 2. Disruptability Index Industry Sector Matrix — 2018 results. Source: Accenture Research.¹⁹

The pandemic has exacerbated the issues in most businesses, and those which were prepared leveraged the crisis to create opportunities to innovate quickly. Take Starbucks, for example. The organization was already in an ongoing digital transformation when the pandemic hit. It quickly changed priorities to implement new solutions to keep the business afloat. The Starbucks mobile app, used by customers to customize and pay for their orders, was considered a critical solution for when people were afraid to interact with each other, touch screens or stay inside the stores. Because it was prepared, Starbucks was able to navigate the uncertainty when the business scenario radically changed.²⁰

In other sectors, those who were prepared had some characteristics in common. They were able to leverage emerging technologies such as data analytics and take advantage of ‘technology as a service’ to have quick access to what they needed.

Dematerialization and the ‘as-a-service’ business model is a reality, not just a trend anymore, since you have pretty much your life surrounded by “as a service” models (movies, books, news, mobility, clothes, etc.) that are challenging the principle of possession of goods in detriment of having the on-demand service.

The core principle here is pay per use, not possession. A good example here is cloud computing. Instead of investing thousands of dollars in data centers, networks, infrastructure, buildings, maintenance, etc., you have access to several services provided by large organizations such as Amazon AWS, Microsoft, Google, Oracle, just to name a few. Cloud computing enables storage, development tools, processing power, and several other applications that the organization can activate when needed and deactivate when not required. Done right, the cloud transformation will help the organization become more effective, innovative, and competitive.

Organizations do not have to heavily invest in equipment, staff, training, maintenance, and deal with outdated and depreciated technology. Research²¹ shows that 80 percent of business executives look to cloud computing services as a means of mitigating business uncertainty and risks. There are many benefits of cloud technology as a service. It can help organizations accelerate and scale innovations, adapt at speed to changes, streamline operations, reduce costs, and drive business agility.

As a comparison, Figure 3 shows the rate of technology adoption before and after the pandemic. What is most interesting is the trend of adopting technology ‘as a service,’ leveraging the scalability and flexibility of cloud computing.

Overall rate of adoption

Figure 3. Overall rate of technology adoption before and after the Pandemic. Source: Accenture Research.²² Legend: Emerging tech: blockchain, extended reality, open source, 3D printing, robotics. IT Infrastructure: DevSecOps, serverless computing, cloud native applications, containers, docker and Kubernetes, microservice architectures, distributed logs/event hubs, react/event driven architectures, FaaS. AI & Automation: deep learning, machine learning. IoT: internet of things, edge/fog computing. Cloud: SaaS (software as a service), IaaS (infrastructure as a service), PaaS (platform as a service), hybrid cloud. Data: data lakes, repository, streaming/ real-time data, big data analytics.

To give an example, a large Italian multinational electricity and gas manufacturer and distributor implemented one of the largest virtualization projects on its telecommunications network to accelerate its digital transformation. This shift to the cloud contributed to reducing operating costs, by increasing the agility of the company’s infrastructure. Now, its network connects over 1,000 sites on three continents and more than ten countries. It also contributed to a reduction in go-to-market time, costs optimization and improved operations. The company was able to quickly move over 37,000 employees to work remotely, providing secure access to applications and environment to continue its operations.²³

There will be an exponential growth of offerings as a service after the pandemic especially in those business environments that need flexibility, scalability, and quality. Key recommendations to leverage technology as a service to support a hybrid environment and contribute to business agility are:

• Start right — begin with a clear strategy to use technology as a service to support the hybrid environment characteristics and business agility capabilities that you need. Like agility, technology is just the means to an end. Having a clear strategy to adopt technology will help an organization keep its focus on what matters, avoid unplanned costs and get more for its dollar.
• Leverage partnerships — choose wisely: you don’t need to partner with just one provider, but you need to be mindful about the pros and cons of having multiple partners and services. Hybrid and multicloud environments are a reality but they also offer trade-offs that need to be managed. Be strategic about your core competences, do not try to internalize everything.
• Accelerate toward the new — technology leaders, also known as the ‘high adopters’ — the organizations that are massively adopting cloud and modern technologies — are now growing at 5x the rate of laggards (or low adopters). In 2019, this difference was 2x the speed of laggards.²⁴
• Unlock growth and innovation — do not adopt these services just to cut costs. Adopt these services to boost growth and innovation through improving speed to market, better customer experience, testing new ideas and products quickly and cheaply, and identifying new revenue streams and business models.
• Mind the talent gap — the adoption of new technologies, as well as new processes and ways of working, will likely trigger the need to reskill and upskill your workforce. When the pandemic sped up, many organizations rushed to secure the best talent. In addition, mobility and flexibility came into perspective, since people now have access to opportunities everywhere.

Thriving in a persistent transformation environment will require a different set of capabilities and skills from senior executives. Building a hybrid environment, making agility pervasive and taking advantage of technology as a service will contribute to make organizations ‘future ready.’ Transformation is becoming more frequent and complex than ever. No matter how much organizations are prepared, they will need to stay alert to anticipate, adapt and accelerate changes to take advantage of opportunities and become more resilient.

About the authors

Edivandro Carlos Conforto is a managing director and Latin America lead of the Business Agility and Transformation Practice at Accenture. The author of a number of books and over 50 articles, published in business magazines globally, he is a world-renowned specialist with over 15 years of experience working with executives in different industry sectors in Brazil, EUA and Europe. Between 2013 and 2015, he lived in Boston, USA, where he attended a post-doctoral program at MIT focused on business agility. He holds a PhD and a master’s degree in agile management and innovation from University of São Paulo. He is the first Brazilian to receive international recognition as a result of his contributions to agile management and business agility.

Juliana Mendes is a business agility and IT advisor, and principal director at Accenture. She has over 20 years of experience helping customers from multiple industries drive performance improvements and unlock their full potential using digital and advanced techniques to manage their organization and business decisions. A specialist in designing transformational solutions for complex problems, she studied IT project management at postgraduate level, with executive training in digital transformation and innovation at Harvard Business School and data driven consulting at Northwestern University, along with overseas specialization courses in organizational agility.

Footnotes

12   More information about being ready to remote work available at https://www.accenture.com/ cr-en/case-studies/about/ready-remote.

13   Accenture Research. Source: https://www.accenture.com/us-en/blogs/voices-public-service/ curious-about-returning-to-work-youre-not-alone

14   Arena, M.J. (2021), ‘Adaptive Space: Shifting from structure to social design’, Management and Business Review

15   Bianchi, M.J., Conforto, E.C., and Amaral, D.C. (2021), “Beyond the agile methods: a diagnostic tool to support the development of hybrid models”, International Journal of Managing Projects in Business, Vol. 14 No. 5, pp. 1219-1244.

16   Conforto, E.C., et al. (2014). The building blocks of agility as a team’s competence in project management. Massachusetts Institute of Technology. MIT research report available at: https://scholar.google.ca/citations?view_op=view_citation&hl=en&user=AjLBjGkAAAAJ&cita tion_for_view=AjLBjGkAAAAJ:hqOjcs7Dif8C

17   Conforto, E.C., et al. (2016). The agility construct on project management theory. International Journal of Project Management, 34(4), 660-674. This article describes the definition of agility and provide insights on how to measure it.

18   Fast track to future ready – Accenture Research, available at: https://www.accenture.com/ us-en/insights/operations/future-ready-operations

19   Accenture Research report. Breaking through disruption, June 26, 2019. Available at: https://www.accenture.com/us-en/insights/consulting/business-disruption-innovation

20   This case is described in the research report “Accenture Technology Vision 2021”, available at: https://www.accenture.com/_acnmedia/PDF-145/Accenture-Tech-Vision-2021-Executive- Summary-Geo-Version.pdf

21   Sky high hopes: navigating the barriers to maximizing cloud value. Accenture Research, 2020. https://www.accenture.com/_acnmedia/PDF-139/Accenture-Cloud-Outcomes-Exec- Summary.pdf#zoom=40

22   Accenture Research. Make the leap, take the lead – tech strategies for innovation and growth. Research report available at: https://www.accenture.com/_acnmedia/PDF-153/Accenture- Make-The-Leap-Take-The-Lead-Report.pdf

23   ENEL beyond the cloud – more than a thousand sites connected by one of the world’s largest network virtualization projects. Accenture Newsroom: https://newsroom.accenture.com/news/ enel-beyond-the-cloud-more-than-a-thousand-sites-connected-by-one-of-the-worlds-largest- network-virtualisation-projects.htm

24   Make the leap, take the lead – Tech strategies for innovation and growth. Accenture Research, available at: https://www.accenture.com/_acnmedia/PDF-153/Accenture-Make- The-Leap-Take-The-Lead-Report.pdf