Jeff Bezos, Chief Executive of the most valuable business on earth, Amazon, has a penchant for speed. To him, rapid-fire action – and failure – are at the very core of running a successful organisation, especially when the stakes are high and time is in short supply.
In a recent note to shareholders, he purposely highlighted making not just “high-quality” decisions, but “high-velocity” ones, arguing the two now have to go hand-in-hand in order to remain relevant as a business. “Most decisions,” he wrote, “should probably be made with somewhere around 70 per cent of the information you wish you had. If you wait for 90 per cent, in most cases you’re being slow.”
According to Bezos, hesitating – read: fear of failure – will always come at a price. “If you’re good at course correcting,” his memo read, “being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
Coinciding with Bezos taking the top spot in Forbes’ annual ranking of the world’s richest people last month, US consulting firm McKinsey now published a new piece of research detailing just how crucial an Amazon-esque sense of urgency is for lasting business success – if applied the right way.
Authored by Aaron De Smet and Chris Gagnon, it reveals that not even half of the world’s top-performing businesses, regardless of industry, sustain a leadership position for more than a decade – arguing that digitisation, advanced analytics and artificial intelligence (AI) “sweep across industries and geographies” to not only reshape the competitive landscape, but re-define the organisational imperative to a simple “adapt or die”.
Referencing Bezos’s rapid shift mentality, De Smet and Gagnon explain that, “those who get it right … create adaptive, fast-moving organisations that can respond quickly and flexibly” to new opportunities and challenges as they arise. To do so, they continue, modern businesses have to move away from the traditional top-down management model towards a decentralised system where decision-making is occurring permanently and on every level – at least where legally possible. “That’s in sharp contrast to the standard, ‘safer’ modus operandi of capturing data, sending it up a hierarchal chain, centrally analysing it, and sending guidance back – a process much too slow and mechanistic to keep up with real-world change,” they explain.
According to De Smet and Gagnon, the high velocity decision-making processes of the future are more akin to a network than a chain of command, thus requiring more open-minded goal setting and cultural orientation. “Because the destination is [often] uncertain you need an emergent strategy, which entails a relentless quest and not a defined end point,” they argue, touching on the ‘infinite business’ debate that is currently consuming the US tech industry (see breakout box). “The pursuit itself should be a firm’s North Star – a questioning of ‘how do we add value’ that’s unceasing but also unsolved, open to exactly how that manifests in terms of specific opportunities and actions.”
Implementing such a culture shift will in turn require a new organisational dynamic that encourages spontaneity and empowerment, De Smet and Gagnon continue. They envision a largely self-managing ecosystem where individuals – and new technologies – can learn and problems can be avoided before they manifest: “If the old world was a master composer like Mozart, planning every detail for every instrument, the new world is improvisational jazz.”
Making the leap will ultimately allow all types of decisions to be made with the right degree of velocity, they explain – from rare, “big-bet” ones that have the potential to shape the future of a company through to frequent “ad hoc” ones that can be undone or corrected before significant consequences arise.
Incidentally, they argue that focusing on a central “next big thing” may be economically fatal in today’s high urgency business environment. Instead, they recommend “unleashing your people so they can reshape your business” by focusing on incremental, close-to-the-customer decisions – even if only 70 per cent of the required information is available. “While some level of prioritisation and resource allocation must be coordinated centrally, many actions and decisions are best taken where the work is done at the front line, close to the customer.”
To ensure rapid-fire, multi-level decision-making – once unleashed – won’t derail an organisation, De Smet and Gagnon recommend the newfound speed be channelled into stable processes, tasks and roles. “Organisational discipline is one of the foundations of both corporate health and operational performance,” they say. “Organisations of the future [are] all about participants making decisions under defined rules of engagement, collaborating to create value, and earning the credibility to lead rather than having ‘leadership’ be imposed from on high.”
With view to increasingly technology-driven industries like trailer and truck body manufacturing, where sensors continue to amount data from every corner of the vehicle, they add that the key to success is letting sensors, machine and human “work their shared mojo as information providers and decision-makers”. They believe the age of urgency would be dominated by analytics powerhouses that rely on inspired, empowered individuals to outpace the competition, not technology alone – be it Amazon or a local trailer OEM.
To genuinely reduce fear of failure – and ultimately ensure a business is adaptable enough to remain relevant after a decade in existence – they stress that instigating a true sense of urgency is a multi-dimensional challenge. “Mantras such as ‘the only constant around here is change’ run the risk of bewildering employees,” they conclude. “But combine urgency with agility, capability, and identity, and you’ve got an organisation that can play fast and long.”
In order to operate with urgency, McKinsey found that businesses are going to have to fill “some serious capability gaps” in the future. “Many of the critical skills your people need – as individuals, team members, and leaders – are changing rapidly as a result of workplace automation and AI,” the consultancy explained in a recent report. “As less complex work becomes increasingly automated, workers will need to be able not just to perform in concert with machines, but also to adapt to uncertainty.” According to McKinsey, only continuous learning, employee development and consistent leadership will prepare teams for the age of urgency.