An interesting short e-book from the Boston Consulting Group, ‘Adaptative Advantage: winning strategies for uncertain times‘ by Martin Reeves, addresses the issue of adaptation (and innovation) in large organizations.
Large organizations need to be especially aware of the challenges they are likely to encounter in developing adaptative capabilities. Classical approaches to managing scale – delegation and specialization – can be highly efficient under stable conditions, but the hierarchical structures they produce are too rigid for the rapid learning and change required in turbulent environments.
A narrow focus on leanness, too, can impede adaptability. Under pressure from competition and capital markets, some large companies have squeezed out not only inefficiency but also the diversity and variation needed to adapt to rapid change. What’s more, once adaptative capabilities in highly structured and specialized organizations have atrophied, they can be challenging to recreate.
In summary, the search for maximum optimization and scalability is bad for adaptation because it squeezes out all the resources and organizational levers that would be needed for adaptation.
This is just why so many large organizations and institutions will not survive the Fourth Revolution. This is why successful organizations will seek to be sub-optimized, to remain reactive, constantly changing and adaptative.
