Why Experimentation is at the Core of Agility

An organization's longevity depends on its willingness and ability to experiment.

January 30, 2019

Time writer Rishi Iyengar says the average lifespan of a company is a mere 10 years (from "This is How Long Your Business Will Last, According To Science”).

Eighty-eight percent of Fortune 500 companies in 1955 were no longer on that Fortune 500 list in 2017; only 60 remain, thanks to the creative destruction that fuels economic prosperity. And while the average tenure of companies on the S&P 500 list in 1955 was 33 years, that tenure shrunk to 20 years in 1990 and is expected to diminish to 14 years by 2026, according to Innosight.

The latest research illustrates how vulnerable even the strongest companies are when they're not resilient enough to cope with disruption. And while increasing organizational agility is clearly a priority for most organizations, the supply-demand dynamics have shifted in many labor categories and geographies requiring companies to alter their approach if they want to stay alive, and thrive.

The longevity of organizations will largely depend on their willingness to experiment.

In today’s volatile marketplace, agility is imperative. And to keep growing, learning and adapting, they can’t be afraid to innovate with new and different models, even if they don’t have all the pieces figured out yet. Look at Upwork, an online freelance talent platform that had a market capitalization of $2.15 billion at its IPO in October 2018 and an organization more than capable of adapting to change. Leveraging the latest technologies, they have consistently upgraded their services and tools to meet market demand.

Many organizations are risk averse - and with very good reason. For the past 15+ years, they’ve been operating for efficiency - an approach that is often in direct opposition to experimentation. But with advanced technologies and inventive-friendly environments available today, they can test with non-traditional data sets without having to put their business on the line.

For example, companies are comfortable leaning on traditional leading and lagging economic indicators to conduct benchmarking and analyses. They may find, however, that, in an era full of new data, other indicators – like the price of oil - are just as central to informing their business strategy.

Embracing experimentation also has an impact on talent strategies, because in order to drive innovation, organizations have to facilitate a work model that enables it.

For example, many are reassessing their buy-build-borrow models and beginning to engage full or partial project teams that augment their existing capabilities based on specific project requirements. In this model, the team - or a specialized squad with a variety of different resources - may not only be responsible for achieving a specific business goal but also in charge of rotating the right people in and out of the organization to bring in the desired amount of innovation.

When it comes to designing systems that will either engage or frustrate a workforce, human-centric design will be more important than ever. The majority of talent acquisition processes have been designed in favor of hierarchical structures. Imagine instead, if talent was treated as the “end user” and leaders applied what they know from their experiences as consumers to how they structure teams, iterate on ideas and provide feedback. Which provides talent, then, with a better “user” experience?

Some companies are experimenting, but it’s not enough if done in silos.

Most companies have made investments into some sort of idea incubator, but all too often they are either underutilized or only embraced within entrepreneurial pockets, instead of across the entire organization. Working in a vacuum is not the answer. Disruptive ideas that scale depend on collaboration and co-creation across teams - especially ones that historically didn’t overlap and are comprised of both internal and external resources that can move quickly.

Advocate for a healthy labor market.

Setting up R&D initiatives that foster curiosity, trial and error, and creativity offer talent leaders in particular an opportunity to advocate for a healthy labor market. With an increased ability to reskill, upskill, automate tasks and deploy new talent engagement models, employers can take more responsibility for the durability of their workforces and advocate for a sustainable labor market where workers have the freedom and choice as to how they want to feel fulfilled in their careers.

And if models such as intact teams prove to be successful, using teams in this way can help address the ongoing talent shortage.
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At Kelly®, we’ve been fortunate to help some of the best and most forward-thinking companies determine how to rethink their processes to become more agile across their entire workforces, as well as how to enable experimentation and testing by bringing in the right types of talent in the right manner.

Check out more from Michael Arena and me as we continue the conversation around ditching the script and rethinking approaches to talent, so organizations can continue to push the boundaries of what’s next.

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