Business leaders are caught in a constant paradox. They must innovate, while optimising existing processes, promote a positive, employee-backed vision, while pleasing shareholders, and grow into new markets, without sacrificing tailored services. And in today’s technology-driven, ever-changing climate, CEOs are not just navigating monumental events, but constant turbulence.
But prioritising and compromising between dual pressures will not guarantee stability – in fact, it will prove the opposite. Agility and paradoxical thinking – the ability to appreciate multiple, conflicting truths simultaneously – is what the future holds.
Conscious decision making
It’s easy to assume that resources – time, money, manpower – are finite. That in order to execute one part of a strategy, something else must be compromised. This is zero sum thinking. And it leads companies to cannibalise, rather than generate new value. For example, investing in digital transformation may cost money, but the time, energy and expenses saved in the long run outweigh the short-term cost. Or a company may feel that it doesn’t have the people to pull off two different projects and so must choose which one to prioritise, but by upskilling, being more flexible with timeframes or redeploying talent, it may not need to.
Seen in a new light, seemingly contradictory strategies can be run in tandem, without squeezing down on resources. For example, business leaders are often caught between optimising existing business models and identifying new ones. Focusing on efficiency alone can lead a company to stagnate as they are overtaken by a moving market. But chasing innovation can lead businesses to lose their foothold in existing markets, as competitors find ways to improve on existing services.
This can be fixed by reframing how we see innovation and efficiency – not as contradictory priorities, but as complementary. One affords the time to invest in the other.
There are different ways to manage different priorities. In this example, businesses could silo teams for different purposes (one group focused on innovation and another on optimisation). Or they could embed innovation leads within teams to ensure that innovation goes hand in hand with day-to-day delivery. Or CEOs could manage this conflict from the top by balancing strategy, such as making an innovative acquisition for every efficiency gain or setting different targets for innovation and efficiency, and report on impact against both strategies in business performance reports.
Finding the balance and thinking in paradox doesn’t just apply to efficiency vs. innovation though. It can be found in the struggle for expansion into new locations vs. customer closeness in existing regions. It’s true in measuring up societal impact against financial performance. And it’s a factor in weighing up employee satisfaction and investment while giving value back to shareholders.
There are a number of ways that technology can facilitate paradoxical thinking.
Foresight and precision
By holding all of the facts, business leaders can weigh multiple conflicting truths simultaneously to make quick, informed decisions. Quick reaction times are the key to agility, but it’s important to know the knock-on effects of each reaction, rather than having a knee-jerk response to each change in the market.
When we look at Gartner’s 100 Data Analytics Predictions Through 2024 report, we see how the use of data and artificial intelligence (AI) is growing exponentially in business. We see how its reach will cross into almost every way we use tech to build better businesses – from blockchain and IoT to enterprise architecture, cybersecurity and the cloud.
Data analytics, AI and machine learning (ML) are invaluable for picking up micro shifts in the market and predicting potential outcomes. By using sophisticated algorithms and baking in variability, assumptions and third-party data (e.g. commodity prices), businesses can create accurate market forecasts that are sensitive to the current climate and hair-splittingly precise.
This data can be sliced and diced to test different assumptions and outcomes, giving leaders a better understanding of the business and the environment it operates in as a whole. In terms of paradoxical thinking, this is essential, as it presents the information holistically and starkly, without the window-dressing that many managers turn to when reporting their forecasts.
Speed and scalability
Balancing paradoxical pressure took on new meaning when the coronavirus pandemic struck in March. Urgent decisions needed to be made to overcome slow growth, affecting staffing levels, spend, productivity and scalability. But slimming down the operating model also needed to be balanced to withstand rapid market changes. Overnight, businesses were shifting their entire operations to digital, exposing the demands, inefficiencies and bottlenecks of day-to-day delivery.
Adapting to these stomach-churning lurches in the market has driven many businesses to a leaner, digitally enhanced, workforce. The learning lesson of this time appears not to be working harder to manage less, but working smarter to manage more. And that means turning to hyperautomation.
Hyperautomation combines advanced automation tools, intelligent technology such as artificial intelligence and machine learning, software packages and robotic process automation (RPA) to speed up business processes. It can be used to identify, analyse, predict, design, monitor and improve processes without human interferences – such as in digital twin technology. Gartner predicts that by 2024, organisations will lower operational costs by 30% by combining hyperautomation technologies with redesigned operational processes.
Using hyperautomation, businesses can respond rapidly to the environment. For example, artificial intelligence could detect a spike in the market, recommend a change, and implement it by connecting with a digital twin. This gives businesses both the speed and the scalability to react to change, by connecting disparate systems, tech environments and business functions. When it comes to paradoxical thinking, the key is thinking holistically and on the front foot.
As well as being hypersensitive to changing market conditions, hyperautomation and specifically RPA can also free up resources to focus on other high priority business areas. RPA takes on repetitive, time-consuming and labour-intensive work, while hyperautomation joins the dots across the enterprise. This means more resource is free for value-add activity like customer experience, innovation and creativity.
But the biggest hurdle for organisations isn’t technological, it’s cultural. Business leaders must think in constant paradox, and technology can help by giving an unbiased, real-time and holistic view of the business; accelerating operations and freeing up resources. This means that decisions can be made with precision, and at speed. But this is only half the battle.
Executives must embed paradoxical thinking across the organisation. Zero sum thinking begins at the bottom, when resources start to feel pinched. But by utilising technology like AI and hyperautomation to its full potential, individuals can gain visibility of the entire business, and the chain reactions that echo through it. This can unlock opportunities and stop siloed thinking. The proof of this is in the rise of citizen developers and citizen data scientists, who use tech to replicate the core functions of their skill scarce counterparts.
They say that necessity is the mother of invention. Covid-19 has revealed the need for greater proactivity, agility and paradoxical thinking in business – and the role that digital transformation plays. The future market is complex, and however business leaders choose to manage conflicting priorities, the most important thing is managing them at the same time, and not giving way to one ‘truth’ over another. Moving with agility means being able to make decisions quickly, taking into consideration all angles at once.
For years, business leaders have warned of the implications of living in a VUCA climate. The words we use to describe the market – high velocity, unpredictable, turbulent, disruptive – all hint at the need for regular adaptation and agility. The coronavirus pandemic is a real-life example of VUCA in action. And it won’t be the last. Change, both small and monumental, is an inevitability we must all be braced for. And technology is the trigger point for this transformation, the architect of its innovation. It is a catalyst and an accelerant.
In our Tech Through Adversity series, we explore how the world of work is changing under the pressure of a VUCA climate – and the role tech has to play. Contact us at firstname.lastname@example.org for more information.