The past few years have felt like anything but a game – unless that game is Monopoly and you’re losing to your older sibling after landing on Park Place for the eighth time. In this case, the taunting sibling has more teeth: global pandemics, social reckonings and war. 

All of these factors have shaken people’s sense of safety, identity and trust. And these challenges have required companies in every industry to accelerate transformation—something that’s difficult in an environment where people are exhausted, frustrated and, at times, scared.  

Fortunately, many companies are heeding the call to take care of their people with 90% of employers reporting an increase in investment in mental health programs (come on, the other 10%!) according to Wellable Labs’ “2022 Employee Wellness Industry Trends Report.” 

And while holistic well-being is incredibly important, work itself still lacks the humanity (the human beings in “well-being”) needed to sustain change. But that’s where play comes in. Forgive the pun, but it plays a part in the transformation.  

What is Play and How Does it Tie Into Transformation? 

Prophet’s Change Fitness Model reflects the different starting points for how companies see and address change, ranging from the transactional belief that “change is an obstacle to overcome” to the transformational state of play where transformation can be a sport to be enjoyed. 

You can think of play as “batteries not included.” Because, given the constant nature of change, those who have achieved play can spend less energy overcoming each effort and more time being fueled by it.  

So how do you get to the state of play? Exactly—you play!  

Scientists Meredith Van Vleet and Brooke Feeney define play as: A behavior or activity carried out with the goal of amusement and fun that involves an enthusiastic and in-the-moment attitude or approach, and is highly interactive among play partners or with the activity itself.  

Applying this lens to work clarifies the opportunity–making work that people enjoy, that brings out enthusiasm and deepens connections.  

The skeptic will say, “We don’t have time for play – we have work to do!” But those ahead of the curve see the intrinsic need to link the two. Better play means better work. In fact, in a 2019 study by Brigham Young University, teams that played video games together were 20% more productive than others.  

That’s because play unlocks creativity, helping people tap into new sources of inspiration and ways of thinking—which creates better solutions.  

And, especially at a time when the universe is playing chess with humanity, play creates sustainability and safety, encouraging people to enjoy what they’re doing, so they’ll want to do it more. And it deepens skill building, encouraging trial and growth in new ways. Checkmate. 

Of course, play is easier said than done and toxic environments will reject it. People can’t experiment if they believe their job or reputation is at risk. They won’t be themselves if they don’t like the people they’re working with. And they won’t prioritize play if they’re getting mixed or conflicting signals from leadership.  

Play shouldn’t be isolated to an innovation team, a single brainstorm, an occasional company outing nor the funniest person in the room. Play needs to take place across all levels and contexts – across a company’s culture, teams and individuals. Each reinforces the other with a company’s culture making it easier for teams to be able to play, and individuals bringing their whole selves to both innovation and the everyday.    

How to Create a Culture of Play Within Your Organization  

So how might you best implement a culture of play? We couldn’t not use the SMILE acronym, could we?  

Safe 

No one wants to play “the floor is lava” with actual lava. People need to feel safe in their environment. That means feeling confident that they can make mistakes and learn from them, not be punished by them.  

According to Peter Temes, founder and president of the Institute for Innovation in Large Organizations (ILO), “that hasn’t changed since we began this work 15 years ago, and probably hasn’t changed from decades prior to that—this idea of lowering the cost of failure.”  

Leaders can create safety by modeling and being transparent about failures and growth opportunities. Most importantly, leaders’ actions must speak louder than words – when individuals fail, they need to celebrate those learnings, not focus on the implications. 

Leaders can also help create a sense of safety through joy and levity in the workplace. Jennifer Aaker and Naomi Bagdonas, authors of “Humor, Seriously,” have shown that companies that embedded humor in their culture had employees who were 16% more likely to stay at their jobs feel engaged and experience satisfaction.  

Meaningful 

By nature, games have stakes and meaning – it’s what makes them exciting and, as defined above, creates the enthusiasm that creates play. Giving meaning to play can take many forms.  

One way is through reinforcing an organization’s purpose, helping people see why their work matters. Some companies create meaning through competition – whether individual incentives, team challenges or by focusing on external competition.  

One company created an internal fantasy league, resulting in an 18% increase in outbound calls and an increase in morale. Making play meaningful like this can be a great cause for celebration and recognition as well—reminding people about why they need to be invested in what they’re doing. Of course, “meaningful” must be rooted in safety – if people fear the stakes are too high, that fear can hold them back.  

Individual 

Everyone’s favorite radio station is WiiFM – “What’s in it for me.” Ask someone about a project they’re working on, and they might smile. But ask them what they did this weekend, and they’ll light up—even more so if they get to talk about personal hobbies or passions.  

Create more ways for people to light up, and you’ll create more ways to unlock that joy and translate it into their work and relationships. At a systemic level, consider how you’re fostering individuals’ passions and making them feel heard and represented. And at a team and day-to-day level, find ways to share them.  

Linked 

On the other side of the “individual” see-saw is the need to bring people together. Often, people have more fun working with other people, and collaboration creates those all-important feelings of togetherness and belonging. Prophet’s 2022 Catalysts research: The Collaborative Advantage finds that employees achieve better outcomes personally and professionally when they collaborate – 65% of respondents cited higher levels of productivity as a result.  

In hybrid environments, it becomes more challenging, where it may seem like people are working together on endless transactional Zoom calls. In reality, there is a shrinking emphasis on true connections which require smaller group interactions and a mix of both work-related and non-work-related focuses.  

Exploratory 

People need new inputs to get to new outputs. Trying a new dish can be more fun and exciting than eating the same meal for the fifth time this week. Consider how to fuel people’s joy and creativity by putting them in new situations, hearing from new voices or thinking about things in new ways. Then, use that space to give people a chance to get their hands dirty, safely.  

Build in the flexibility for exploration. A global airline used the power of play to teach the organization its seating pricing strategy. Leaders used a game of “The Flight is Right,” taking the principles of “The Price is Right” and applying it to the complex principles that airlines face. By approaching the learning in a new way, and allowing people to play and participate, the message stuck.  

LEGO’s serious play methodology is another great example of encouraging exploration to envision challenges in new ways while tapping into the joy of being a child.  

The creativity expert, Edward De Bono, describes “Rivers of Thinking” – the building nature of experiences that help us to unlock new solutions. When we fill our rivers with the same water, it becomes difficult to explore new ones.  

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It’s a truth older than Darwin: The ability to adapt grows more valuable whenever uncertainty in the environment increases. With the world’s markets tiptoeing toward recession, companies have the opportunity to make their next evolutionary leap–the chance to become more human.  

We know –”more human” doesn’t exactly sound like how we’ve traditionally been taught to think about organizations. Businesses have spent the last two decades pursuing digital transformation and embracing artificial intelligence and advanced robotics–technologies that generally assume tasks previously reserved for humans. Additionally, business leaders have spent the last two centuries absorbing the Industrial Age organization theory, painting organizations as machines. 

However, enterprises are not machines and people can no longer pretend that they are. Organizations are living organisms with behaviors and abilities like the humans who staff them. 

The last few years have made that clear. Profits, while essential, aren’t all that matter. The market’s definition of success has shifted, and while people still expect organizations to make money, they increasingly value environmental sustainability, social equity and inclusion as well as efficiency. They expect human behavior–that means ethical, compassionate and transparent–from the companies they do business with.  

Organizations can’t behave like single-minded robots to thrive in this new era, marching mindlessly toward the next quarter’s financial results. They need to evolve and become more complex, adaptive and creative organisms.

Three Ways You Can Build an Adaptable Operating Model  

Adaptability is an acquired skill, and enterprises can take inspiration from our own human biology. We see three critical ways companies can evolve their operating model to become more adaptable and flexible, using the human body as a starting point.  

1. Distributed Intelligence 

People’s bodies can react quickly without involving the brain. Think about knee-jerk reflexes or yanking a hand away from a hot fire. 

Organizations do the same thing when they empower people to take action throughout the company instead of having all decisions centrally controlled by a handful of leaders.  

In a pharmaceutical company, for instance, engineers and planners can be embedded into production teams so they can deal with any issues locally, continually improving performance. The production quality gets improved locally and immediately, without involving the company’s central leadership. 

This pivot to decentralization is evident in flexible manufacturing. For the pharmaceutical industry, for example, this concept is increasingly important when using cell and gene therapies to make advanced biologics. Often, these drugs are aimed at small patient populations, especially in oncology. Manufacturing cells need to reconfigure quickly to respond to market needs and be first to market. 

It shouldn’t be local intelligence and action versus global intelligence and action. It’s about both. The human body has neurons in muscles, gut and extremities as well as the brain–and so do organizations.  

2. Learning Through Data 

Our brains learn through external stimuli, and people’s knowledge and capabilities represent everything they’ve individually learned or experienced. In other words, they are built by the data available to them through the senses. That’s why neural networks, modeled on the structures of human brains, can only be as smart as the training data available to the model. 

For organizations to be more nimble, they need better and more frequent access to data of all types. They need to develop robust “sensory organs”–mechanisms to ensure they intimately understand customers’ needs, wants and desires. And they need to feed that data (as real-time as possible) into organizational decision-making.  

That’s especially true for design functions, so that customer and employee experiences adapt to the needs of 21st-century consumers. Many companies believe they already do this, of course. But in adaptive enterprises, it is as natural as the human eye adapting to bright sunlight. 

Samsung has built regional design studios around the world, which leverage design thinking and market knowledge to rapidly innovate. With its main hub in San Francisco, its multidisciplinary designers help it tap into the entrepreneurial spirit of Silicon Valley. That enables it to reign as Apple’s most formidable competitor.

3. Embrace the Ecosystem 

Humans are exquisitely social animals. Most of us cannot exist independently from one another. Societies are complex ecosystems, with people mutually dependent upon one another for survival. And as environments have changed, new civilizations have grown up in response to new human needs. 

In organizations, this spurs ever-expanding ideas about partnering and collaborating with other organizations. Technology incubation centers have spawned new developments–enabled by these networks and connections in ways that didn’t exist even a decade ago. It’s driven by sharing platforms– companies like Uber and Airbnb–and the subscription economy, led by companies like Salesforce and Apple. 

Thriving in a VUCA World 

There’s no escaping the VUCA (volatility, uncertainty, complexity, ambiguity) world we live in today. Organizations are still scrambling to embrace the changes wrought by the pandemic, including shifting customer values and hybrid workforces. And while the recession is by no means certain, rising inflation, energy costs and interest rates are pressuring consumer and B2B customers.  

But organizations are by no means helpless. These sweeping changes offer opportunities for evolution and adaptation. For some, it may even be the right time for organizational transformation, including a new approach to human-centric operating model design. And no matter what, this uncertainty requires an entirely new approach to collaboration, a holistic view of the organization that takes in a company’s eyes, ears, heart and soul–as well as its brain.  

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More than ever, collaboration is top of mind as companies ease out of the pandemic and build towards a new normal. The past few years showed us the challenges of collaborating amid changing COVID-19 restrictions and hybrid setups. However, they have also shown us the transformative potential that can be unlocked via technology, agility and a human-centered approach.  

In Southeast Asia in particular, effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal. But this is not without its challenges. The region continues to struggle with heightened competition for talent, fluctuating COVID-19 policies and different development stages of hybrid work in an ever-competitive market landscape. Moreover, collaboration in SEA can be particularly challenging due to a number of characteristics unique to the region: varying cultural and language backgrounds of employees, different levels of economic development across the region, nascent stages of digital transformation and – for international corporations – a wider cultural difference between HQ and regional offices.  

Despite, or perhaps because of these challenges, our 2022 global research report, “Catalysts: The Collaborative Advantage”, shows that SEA companies value collaboration more than other regions (52% versus 44% globally).  

Diagram 1: Value of Cross-Organizational Collaboration 

However, only 28% of SEA respondents feel they are very effective at collaboration across their organization.  

Diagram 2: Effectiveness of Cross-Organizational Collaboration 

How can the region work to close the gap and reap the benefits of strong, cross-organization collaboration?  

The Collaboration Flywheel 

A key output of this year’s “Catalysts” report, Prophet’s annual global culture research study, is the Collaboration Flywheel, a model that reveals a path for leaders and organizations to prioritize and accelerate the efforts to build their collaborative muscle.  

The metaphor of a flywheel helps capture the inherent complexity of the adaptive system that is organizational culture. A flywheel works by reinforcing positive behaviors and outcomes while minimizing negative feedback loops, thus building and maintaining momentum over time. Most importantly, each specific action we’ve identified in the Collaboration Flywheel model helps deliver better, more impactful outcomes more quickly. 

Using this framework, we can understand how SEA can leverage its strengths and unique regional characteristics to drive greater organizational effectiveness.  

Diagram 3: The Collaboration Flywheel 

1. Coordination 

The first phase in the Collaboration Flywheel is Coordination. This is where many organizations begin their development journey by empowering groups to work horizontally rather than just in their vertical silos. Coordination centers on connecting an employee’s effort to the larger picture – the organization’s purpose – and modeling “what good looks like.”  

In our research, when compared to respondents in other regions, SEA respondents were more likely to emphasize the importance of connecting individual work to the organization’s purpose. In SEA, 75% of respondents believe it is important to be able to connect their work to the company’s business strategy, however, only 36% think they are able to effectively contribute to the organization’s purpose.  

Diagram 4: Value versus effectiveness When Connecting Employee Work to Business Strategy 

While many factors can inhibit an individual’s ability to contribute to the organization’s purpose, we see the three biggest factors in the region as top-down management styles, lack of understanding of “what good looks like” and early stages of digitalization. To overcome these hurdles, companies can enable cross-organization coordination by empowering decision-making at lower levels of the organization, showcasing best practices and pushing the digital transformation agenda forward.  

In 2017, MB Bank, one of the largest financial services groups in Vietnam, set up a new digital bank as an independent business unit, separate from its legacy bank. This radical approach to digital transformation helped MB Bank’s speed to market, but it also made coordination between the two BUs challenging. Employees knew the bank’s digital transformation goal, but those in the legacy bank couldn’t always contribute to it.  

MB Bank recognized this disconnect and saw the impact it had on employee coordination and how that translated into the customer experience. By leveraging digital transformation to instill agility and a more nimble way of working across the organization, MB Bank was able to transform its legacy bank, driving the efficiency of its operating model and increasing cross-organization coordination. To further create a culture of collaboration, the company focused on shifting the mindset of its people, encouraging an entrepreneurial and agile approach that embraces risks and a fail-fast new culture. This has propelled MB Bank today to become the fastest growing and most digital bank in Vietnam.  

2. Cooperation 

The next phase is Cooperation, which builds on coordination by adding trust and shared ways of working. It is characterized by clarity of objectives, capability building and incentive alignment. 

Relative to other regions, SEA respondents place more emphasis on aligned incentives as necessary means for collaboration. In our research, 78% believe incentive alignment is important to collaboration effectiveness, and a quarter believe incentive misalignment is also one of the biggest barriers to achieving this goal. 

Diagram 5: Value versus. Effectiveness When Aligning Incentives That Encourage Cross-Organizational Collaboration 

Keeping in mind SEA’s highly diverse workforce, the definition of a good incentive can vary widely.  

For example, companies in more developed countries such as Singapore, tend to consider soft incentives (benefits, training, recognition, etc.). However, companies in developing countries such as Vietnam, often prioritize hard monetary incentives. Beyond cultural differences, unrelated parts of the organization are often incentivized by siloed outcomes and metrics of success, making cooperation difficult. To solve this, companies can enable cross-organization cooperation by aligning incentives with relevant business outcomes that build towards a common goal, while taking cultural nuances into account. 

In 2020, HSBC merged its retail banking, wealth management and global private banking into a new global wealth and personal banking unit. This change in the organizational structure allowed for greater operational efficiency, reducing redundancies and combining related capabilities, talent and infrastructure resources. By breaking down silos and creating a shared mindset around collectively achieving goals, HSBC was able to reduce cooperation barriers to drive more effective client outcomes. 

3. Collaboration 

As cooperation builds interdependence and synergy between formerly independent groups, it creates the opportunity to pilot and embed new ways of working. In the Collaboration stage, leaders reward progress – not just outcomes – and there is a culture of evaluating both process and priorities within the context of the organization’s purpose. 

When compared to other regions, SEA is better at both recognizing and rewarding cross-organization progress. Almost half (41%) of SEA respondents believe their organization is good at recognizing and rewarding progress. However, to enable effective cross-organizational collaboration, organizations need to both recognize progress and be open to constructively challenging the ways things are done.  

Diagram 6: Value versus. Effectiveness When Recognizing and Rewarding Cross-Organizational Progress, Not Just Outcomes 

Many of the companies in the region tend to be more traditional in their approach to workplace organization and culture, emphasizing their top and bottom line over individual wellbeing. This is especially true for small and medium enterprises, which make up 97% of all businesses in the region. This conventional mindset often inhibits individuals from innovating new, more effective ways of working.  

To open the door for innovation, employers can empower employees to think critically about how they can better contribute to the organization’s purpose and be innovative in their ways of working. By allowing a more bottoms-up approach to organizational culture, employers will not only see more effective outcomes in the market but will also make their workplace more attractive to employees. This can be achieved through test-and-learn environments where employees can propose new ways of working and implement integrated planning processes where functions can share wins, risks and priorities. And if the organization is in the midst of a transformation, this is where setting up a Transformation Management Office (TMO) to connect different parts of the organization around a unified set of goals can take place.  

Singapore’s Government Technology Agency (GovTech) has adopted a flat, tech-like organizational structure that gives semi-autonomy to its sub-groups. This enables the agency to have not only speed to market, but also high levels of collaboration across the groups. In addition, when recruiting, GovTech specifically looks for a sense of learning agility in candidates, ensuring its employees are eager to adapt, pivot and stay ahead of the trends. This internal culture of collaboration helps GovTech stay competitive with other tech startups and incumbents that prospective employees might be considering. The results are astoundingly impactful: In 2021, 99% of citizens surveyed expressed satisfaction with the overall quality of Singapore’s government digital services.  

At Prophet, we believe that people are at the core of any organization. And people working together collaboratively is what drives change, delivers results and sets organizations apart. SEA faces unique challenges: from its uneven regional economic development to its early stages of digital transformation to the diversity in its workforce. However, these present an even more pressing need for organizations in the region to build towards a culture of collaboration. By using Prophet’s Collaboration Flywheel, organizations can work towards:  

• Coordination: Illustrate the linkage between an employee’s individual effort and the organization’s purpose. Guide individuals by showcasing “what good looks like” and giving decision-making authority to lower levels, while leveraging digital transformation as an enabler.
• Cooperation: Align incentives across the organization, balancing differing definitions of what a “good” incentive is. Take these cultural differences into account to create incentives as well as a shared mindset that collectively achieves unified goals.
• Collaboration: Focus on the process, not just outcomes to make room for more agile thinking which allows synergies and interdependences to form. Empower employees through a bottoms-up, test-and-learn approach that encourages them to challenge the status quo and implement new, fresh ways of thinking. 

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“Never let a good crisis go to waste” may be old advice, but it feels timelier than ever. While businesses are still struggling to distill the ongoing lessons of the pandemic, they now see inflation, interest rate hikes and an ongoing war pushing the economy closer to recession. If that wasn’t enough, supply chain issues continue to disrupt and consumer confidence is fading. 

Companies are also challenged as they try to figure out if we are in the great resignation or the great retirement, and what that all might mean for the great hybrid experiment.  

A new norm has emerged: The only true business constant is continuous business disruption. 

Predictably, many businesses are already fearful, cutting budgets, freezing new hires and even laying off staff.  We are seeing this in our clients. Governments are getting involved in companies’ marketing spend. And chief sustainability officers wonder how best to pay for the commitments they’ve made over the past two years. 

All these issues are real and complex, and in some ways, it’s good to be on high alert. But businesses have a choice in how they respond, as they did in the economic crises of 2001, 2008 or 2020.   

Each downturn has produced new economies that did not exist before, from e-commerce to the sharing economy to the experience economy to the world of subscriptions and crypto. There’s a long list of companies that have been created by these downturns including Netflix, Uber, Airbnb, AbbVie, Spotify, Instagram, Bitcoin and Ethereum. Others, such as Samsung, GM, Microsoft, Amazon, Google and Bank of America have been reimagined in ways that would be hard “to imagine” before these downturns. 

So, instead of talking about crises, cutbacks and retrenching, we are choosing to use words like resiliency, durability, agility and radical innovation, as we guide clients through this latest challenge. We know growth can’t happen amidst panicky cost-cutting or short-sighted pivots. 

No one enjoys downturns. But we can see how our clients in the past have channeled anxiety into strength and resiliency. They evolve. They make intelligent choices and emerge stronger than the competition. This is a moment to leapfrog and discover ways to accelerate, creating an opportunity to differentiate companies from competitors and create net-new businesses and categories, customer experiences and offerings. 

To this end, here are five ways we are advising clients as they strive to build their own versions of relentless resiliency. 

Accelerate Purposeful Leadership 

In the last two years, purpose-driven companies have become the norm. COVID-19 triggered an unprecedented number of companies to go out, find their North Star and align to a higher-order purpose. These past few years have shown leaders that doing good in the world, doing right by employees and customers and making money can all work in concert. Now is not the time to throw all of that goodwill and equity away.    

Purpose-driven companies are forcing leaders to become more agile, transparent and even a little vulnerable. The radical communications door that opened during COVID-19 needs to stay that way. The entrepreneurial spirit that allowed companies to reinvent how they did business has to continue to thrive. The agile strategies that respond to a changing environment must become the norm.  And, importantly, with a strong purpose in place, they can make hard decisions through a values-based filter. Steps to take now: 

1. Invest in purpose-driven growth moves. Remind teams that downturns always open white space opportunities for those that are looking “between the cracks.” Encourage teams to continuously search for the next big thing. What will be the crypto or sharing economy of 2023? How might it align with your purpose? How will it move you forward? And, importantly, how does it pay off your purpose? Assume your competition is doing the exact opposite. 
2. Be ruthlessly transparent. Agility is important, but moving too fast can cause whiplash, confusing employees rather than inspiring them. A change in direction and purpose alignment can’t just be clear to leadership–it must be evident to all teams and employees, as well as customers, shareholders and other stakeholders.  Be vigilant, strong and consistent in your communication approach. 
3. Accelerate brand, demand and innovation efforts. Discretionary spending is generally first to go, yet, we have seen in the last three recessions that companies that kept their foot on all of these pedals have come out stronger on the other side. On the innovation side, widen the acquisition aperture. Start-ups and small companies might currently be more open to acquisition discussion, and can immediately fill in offering and experience gaps at a lower price point. On the brand and demand side, it’s easy to fall into the false dichotomy that companies must tradeoff between brand or demand marketing. However, you need both. And there must be a real partnership between the two disciplines often most at odds—sales and marketing–to figure out the right mix today and tomorrow. 

Leverage Employees as Your Greatest Competitive Advantage  

There are many reasons the employee base is so fragile right now. The great resignation, the great retirement and many of the experiments coming out of COVID-19 are still in motion. Many companies will use recession nerves to back off employee engagement efforts. If they haven’t yet focused on their employee value proposition (EVP), they may think they can let it slide.  

This is a big mistake. Like many other companies, Prophet just went through a talent war like few others we have seen. There is no reason to think that will change on the other side of this downturn. 

The current economy is making employees increasingly uncertain about the company-employee contract, despite all the employee engagement skills businesses have built through COVID-19. The EVPs just re-launched at many companies will be thrown into disarray. Pragmatically, if personnel cuts need to be made, it must be done through a strategic lens, tying back to the company purpose. Steps to take now: 

1. Choose programmatic and initiative cuts over personnel reduction. We are still in the early days. And just as the pandemic sparked supply chain issues and are still causing mayhem (just peek in a Target or Walmart warehouse), so too will the labor shortages many are experiencing on a daily basis. 
2. Encourage cross-functional teams. New research from Prophet finds that 63% of companies with higher cross-functional collaboration skills say it increases employee satisfaction scores, and 54% say it boosts retention. People want to work with one another. 
3. Poke at pain points. Hybrid workforces are in their infancy, and there is much to be done to make the experience more fulfilling. Is commuting grinding people down? Are they stressed by after-hours e-mail? Do they have Slack or Zoom fatigue, and are there other tech solutions that might help? 

Make Budget Decisions Through the Experience Lens, not Just Organizational Constructions and Functions 

As mentioned, it’s natural for companies to consider cuts across the organization– in each function and business unit. In tough times, this often feels “fair”. Instead, decisions should be made using the experience point of view: What allows for the best customer and employee experience? 

Companies should take this opportunity to understand what is required across the functions to create differentiated experiences for customers and employees. This may require more granular cuts. And in every company, there are pockets within the budget that will always be spent, often in procedural and programmatic ways. That money may well be redirected to experience investments. Paused programs can always be restarted. Steps to take now: 

1. Create agility through experience pods. Many companies have already put smaller pods into place to boost agility. Put these newer teams to work differently, across functions and in ways that build customer or employee experiences. Create assignments that build connective tissue. 
2. Enhance collaboration. Break down silos and optimize spending by developing a more collaborative working model. Our recent research shows that while 80% of leaders believe collaboration leads to better outcomes, only 28% of hybrid workplaces effectively support it. And only 50% of respondents believe their teams collaborate effectively, even when they’re all in the same room. What are new ways to rewire traditional methods of working including budgeting, resourcing and product development? 

Harness the Investments Made in Technology  

Digital thinking continues to be the lifeblood of business. It drives everything from manufacturing to delivery to remote work. And technology accounts for trillions in business spending, including ongoing investments that can’t be reduced. The problem is that in most companies, this tech exists in ponds and lakes, with little ability to pull it all together.  

And in many, that single view of a customer–the dashboard we’ve all dreamed of–still doesn’t exist.  

If possible, it’s a good time to pause or slow new tech investments, reevaluating digital priorities. Any spending that improves customer experience should move to the top of the list. Steps to take now: 

1. Clarify customer journeys. Use the point of view of each customer segment to ensure existing technology adds value, eliminates friction and provides the right data for future decision-making. This includes mapping the tech to each existing critical process. Encourage teams to find greater optimization. 
2. Reconsider the employee experience. The right digital tools increase employee productivity and satisfaction, enabling the kind of collaboration that drives growth. 

Knowledge of Customers, Competitors and the Market Is the Only Superpower 

Stop guessing. When no one knows what lies ahead (and no one does), it’s critical to understand how customers think, behave and buy in real-time. And it’s just as essential to know exactly what the competition is doing. Amid so many economic changes, the rules of many categories are being rewritten as people and businesses alter their spending patterns. 

What’s required is a set of processes and mechanisms to gather as many insights as possible. This needs to be combined with a mindset that accepts the insights readily, with the willingness to adapt accordingly. No one knows exactly what is going to happen six months from now, but we need the skillset to collect and discern as much about the changing environment as possible. Steps to take now: 

1. Pulse the market. Invest in pulsing capabilities, then embed findings into practices and processes. This constantly feeds into new products, services, experiences and go-to-market approaches. 
2. Use insights to prioritize new investments. These insights may tell you that you do not have what it takes to be successful in an ever-changing world. Don’t be afraid to test and learn as a result, shifting investments as needed. 
3. Challenge team behavior. The hardest part of integrating insights into your business may be changing the behavior of team members to act on the insights. This kind of cultural shift isn’t easy, especially when people are frightened. While you may be cost-cutting, invest in the change required in your culture to drive agility in the organization. 

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As businesses work toward transformation, many find themselves trapped in a structural paradox. The Collaborative Advantage, the latest global research report from Prophet’s Organization & Culture practice, finds 80% of business leaders recognize that collaboration throughout the enterprise is essential. Yet, 50% are struggling to achieve it. And hybrid working compounds this challenge further with only 28% saying they believe their organization effectively supports collaboration in this environment.  

The most successful transformers? They have worked to break down silos and build collaborative muscles by progressing through three essential phases, which we have encapsulated in a new model: Collaboration Flywheel. It’s a virtuous cycle of interdepartmental breakthroughs that reveals a path for leaders to more impactful outcomes and faster growth.  

Prophet’s Collaboration Flywheel

The Flywheel provides a perfect metaphor for organizational culture. Taking a holistic, human-centered approach, it works by reinforcing positive behaviors and outcomes and minimizing negative feedback loops. It builds momentum over time. Each time the wheel turns, it generates more power and benefits for both the business and individuals.  

Phase One: Coordination

This is where many organizations begin and end their development journey. Different groups, traditionally siloed, recognize the need to align horizontally rather than vertically. When leaders promote a broader strategic goal, teams understand that working together is beneficial. And they also understand when it makes more sense to continue with traditional, business-as-usual approaches. To create clarity, organizations need to define the goal and role model the desired collaborative work.  

An example of this in practice might be helping employees to invest time in understanding how different parts of the organization work and identify connection points (e.g., shadow a colleague in another function) or creating a shared vocabulary – even just a few key terms – to use consistently in cross-organizational efforts.  

Phase Two: Cooperation

As each group gains experience in coordination, they get a clearer understanding of how their work fits into the bigger picture. Trust, shared ways of working and incentives become more explicit, making it easier for groups to proactively call on collective capabilities. They move into the who and how of the collaborative effort. They start to define roles and decision-making responsibilities. 

They see the value of shared effort more quickly. They’re informed by a common ambition, a central fact base and well-articulated ways of working. They will also have the right tools to navigate the complexity of their growing interdependence. All of this means cooperation is far more likely to have a greater collective impact than straightforward coordination might produce and depend less on the day-to-day involvement of leadership.  

Phase Three: Collaboration

As this proactive cooperation builds a shared context across independent groups, interdependence and synergy increase. At this point, the organization can celebrate the visible progress of piloting and embedding new ways of working. Cross-organizational teams see an increase in quality, with a healthy mix of synchronous and asynchronous work. Synchronously working teammates often generate new ideas together. Asynchronously working colleagues bring objectivity and clarity.  

Working together becomes the norm, not the exception. And so, the Flywheel spins. When combined with our human-centered approach to transformation, this new organizational muscle of collaboration taps into the enterprise’s DNA, Body, Mind and Soul.  

With collaboration now a default behavior, it becomes sustainable. Innovation and disruption replace old and ineffective ways of working, which in turn leads to accelerated transformation and results for the enterprise.  

Better Outcomes – For the Business and Individuals

The research shows that higher levels of teamwork enrich individuals, building new skills that increase engagement and job satisfaction – a critical lever in today’s dynamic talent landscape. Of the 1,000+ people we spoke to across the U.S., Europe and Asia, 77% say the organizational emphasis on collaboration enables higher productivity. 

As evidence of its ROI increases, it’s clear that collaboration has moved from a buzzword to a core business strategy. Organizations no longer need to be sold on the benefits and importance of collaboration. Leaders and managers worldwide understand that practical cross-organizational efforts lead to greater success.  

This is especially true as companies step up their efforts in diversity, equity and inclusion, and environmental, social and governance issues. By definition, this work needs to permeate every part of the company and be understood by each employee. Often, it even requires reaching out beyond the organization’s borders and interacting with external stakeholders that may include government, NGOs and communities.  

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Veni, Vidi…VUCA: Time to Embrace the New Reality

In the New Year, the Economic Glass is Half Full

As 2022 kicks into full swing, many sectors of the economy have been reflecting on a remarkably strong performance through the second year of pandemic mayhem. While we continue to actively learn to navigate the constant shifting sands of the pandemic, albeit easier for some sectors than others, the global economy has – thus far – proven resilient and not ground to a halt.

But our Workforce Glass? Very Much Half Empty

And yet, 2021 brought progressive waves of challenges that will still require significant attention in the years to come. Consumers and communities demand that businesses take a more active role in broader societal issues. Employees and investors express the same.

Employees worldwide are actively reprioritizing their lives, questioning the role and purpose of their work. They’re also questioning the role of the office in their lives, creating significant tension in hierarchical cultures where daily office presence has historically been expected and leaders continue to cling on to established norms. The newly christened category of “front-line, essential workers” are asking similarly existential questions about their work: when is the risk of service too high? Is our service valued by society? And thus, the so-called Great Resignation is impacting nearly all generations and “collars” of the workforce.

Welcome to VUCA

Leaders are facing the reality that nothing will return to normal and that there isn’t even a “new normal” one might reliably anticipate. Years ago, military leaders coined the acronym VUCA: volatility, uncertainty, complexity and ambiguity. In a post-pandemic business world, it’s time for the rest of us to embrace VUCA as our new reality.

VUCA means that many of our most popular models of management have literally lost their relevance. 5-year strategic plans, 3-year ROI models, Gantt chart project management, hierarchical management structures, siloed work, narrow expertise and fixed annual cycles of performance management were all already being seriously questioned in 2019.

“VUCA means that many of our most popular models of management have literally lost their relevance.”

In 2021, we found in our annual global research that the firms that truly thrived in the confusion of 2020, those that met or exceeded their objectives, had higher change fitness because they had abandoned those waning operating models, structures, rituals, mindsets and tools wholesale.

What to Do in 2022

As we look backward on what we’ve learned over the last two years and then picture ahead to the coming year, what might make your organization more fit for change? Better yet, what ideas might propel you ahead of your current and future competitors?

Three Ideas to Help Your Organization Thrive in The VUCA Reality

1. Actively Balance the Urgent with the Strategic

All sizes of organizations worldwide had to move quickly to set up projects, programs and initiatives to address the pandemic-driven issues in their business and not just once, but on multiple occasions as the different variants struck. Simultaneously, many firms recognized that a lot of their actions were addressing long-known and long-ignored issues. Wise leaders consciously used the momentum of the moment to slingshot their organization to a more resilient future, desperately looking to accelerate fundamental transformations of their operating model, customer relationships, technology enablement and culture.

Entering 2021, we observed that our most progressive clients began changing their strategy development processes. Even as they adopted agile and design thinking to maintain a sharp market focus, they also began working future-back into their strategy so as not to get caught so badly flat-footed again. In 2022, there are inevitably a host of urgent needs. Make sure that you’re also making space (and dedicating resources!) for the strategic.

2. Seek to Forge a Unified Customer and Employee Experience

All successful organizations today have embraced the philosophy of customer experience. Some organizations have also come to embrace the idea that employee experience is something that can be actively designed and managed.

A missing connection you might address in the coming year is how to make those two experiences one. What kind of transformational effort might be required for those internal and external experience designs to be crafted, managed and measured together?

3. Build a Leadership Coalition for Transformation

The ineffectiveness of organizational structures and the challenge of silos remains a constant challenge to transformation – our 2021 global research yet again highlighted this barrier. Addressing this does not begin with some re-engineering blueprint but rather with the recognition that key functions and areas need to work together differently for a different and/or new outcome. Put another way, the “new advantage” is collaboration.

We might think about the EX/CX opportunity described above to build and amplify them for mutual success. Achieving that kind of business outcome means that a unified EX-CX initiative cannot sit simply with HR nor simply with Marketing. In fact, it is more than likely to also need the buy-in from the CIO let alone operational leaders.

The bottom line is that sustainable transformation fitness and effectiveness is only sustainable with a leadership team that operates beyond individual representation and is prepared to be accountable to one holistic agenda. Organizational resilience in a VUCA environment requires alignment on that agenda now – if you haven’t already.

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Everywhere you look organizations are trying to figure out how to future-proof themselves. Organizations are grappling with how their flexible, hybrid working model might look and how to cope with the diversity of employee preferences created by the pandemic.

The role of leadership has never been more important to the health of employees and the success of the organization as business leaders across the globe manage through this uncertainty. What was considered effective leadership pre-pandemic (coaching, feedback, empathy, trust) is now a basic leadership requirement. And as the war for talent intensifies, the quality and empathy of leadership will be an important differentiator for current and prospective employees.

“As the war for talent intensifies, the quality and empathy of leadership will be an important differentiator for current and prospective employees.”

Therein lies the problem. The general quality of leadership is not where it needs to be. In 2020, MIT global research with c5000 Executives found that less than 10% of employees strongly believed that their organizations had leaders with the right skills to thrive in the digital economy. But the pandemic turned every leader’s world fully digital overnight.

At Prophet, we have developed a Human-Centred Transformation Model™ that guides holistic cultural change and identifies organizations as macrocosms of an individual with DNA (strategy, values, purpose, Mind (talent, skills, capabilities), Body (structures, processes, tools) and Soul (mindsets, behaviors, rituals). Through the lens of the model and our client work, we have identified three steps that will help you raise the floor of your leadership capability and take a human-centered leadership approach in a hybrid and digital world.

Step 1: Co-create a leadership philosophy (DNA)

Leadership is a term that everyone understands or thinks they do. We all have our own view of what a strong leader looks like and who we want to emulate. However, individual perspectives don’t breed quality or consistency. It’s critical for your leadership (and your employees) to co-create and align on the version of leadership that’s right for your strategy, your people and your culture, particularly in your new hybrid context.

In addition, the remit of leadership has changed. With societal trends coming to the forefront of daily organizational life, leaders can’t lead without acknowledging and supporting their people during uncertain times. Leading with values and purpose is a prerequisite now; leaders cannot focus solely on strategic or operational topics to get them through.

Allied to that point, leadership roles should include a tangible set of leadership responsibilities and objectives. For example, leaders need to be leading, not just doing tasks or making decisions. They must be empowering, nurturing and guiding their teams. It takes time, effort and skill to adopt a human-centered approach to leadership and to do it well. Ensuring your leaders adopt the mindset that human-centered leadership is critical to the organization’s performance, will provide a strong platform to develop your leadership capabilities.

Step 2: Build agility into your leadership development framework to align with your culture and strategic priorities (MIND)

Traditionally, many organizations use prescriptive models of what good leadership looks like, developed directly from theory. However, they were never especially applicable in your organizational context and – rigid by design – they are now out of touch with what’s required in an ever-changing, hybrid world.

The shift to hybrid working provides a reset opportunity and there are some improvements that will help you make your leadership development investment more impactful going forward:

• Revisit your leadership development approach regularly – now that we are in a hybrid world, tailor your approach to your new context and your strategic priorities. Measure progress and adopt an agile approach that keeps it simple and focuses on only a few priority areas at a time
• Over-index on purpose, values and the human, empathetic elements of leadership – your employees need more meaningful communication and an increase in the level of emotional and personal support in a hybrid environment
• Prioritize collaboration and compromise as central tenets of your leadership framework – the days of heroic individual leaders are long gone. Leadership needs to come together and zero in on what’s best for the organization and the people, rather than protecting their specific domain
• Bring new capabilities to life on the job – set expectations and challenges, create a safe environment to experiment with new leadership ways outside of the development space

A refocus away from the traditional approaches will increase your chances of moving the needle on leadership significantly. In parallel, it’s important to make leadership development accessible to more than just an elite, senior group – take a youth development policy in order to build leadership as a strategic advantage over time.

Step 3: Create an aligned leadership ecosystem (BODY & SOUL)

One of the biggest complaints Harvard Business Review hears about executive education is that the skills and capabilities developed don’t get applied on the job. A note of warning: your leadership ecosystem will make or break your effort. This is the area that most organizations don’t realize they need to address. The most important step you can take to support consistent and effective leadership in action is to analyze how your culture and operating model are impacting your leadership practices and behaviors. Then you can align the critical levers to incentivize, rather than deter, the desired approach.

Additionally, all the development activities in the world won’t create the leadership you want ‘on the job’ unless your organizational ecosystem supports and rewards the desired leadership approach. The latest global research from Prophet’s Organization and Culture practice identified the fundamentals and accelerators for cultural change (e.g., ambition, roadmap, role modeling, decision making, incentives and rewards, mechanisms to experiment) and it’s important to address these to create the environment and the enablers that will embed the new leadership behaviors.

Releasing leaders from a development environment back into their day jobs without adaptive mechanisms and expecting them to change their behavior when all the rituals, processes and incentives encourage them to lead in the same way they always have done is a mistake. This instantly erodes all the value and effort of your investment in leadership development activity. Sadly, this is still all too common in organizations today.

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