New capabilities for a fast-changing world

The world is changing faster and perhaps more, this decade, than any other in living memory. While the forces of change are mostly coming from outside our businesses, we need to ‘future proof’ ourselves and indeed seek advantage from the changes by adapting and proacting at both the firm level and as individuals.

Forces acting exogenously on our economy and professional service firms have included the pandemic, revolutionary new technologies, geopolitical elements, climate-induced changes and generationally changing cultural expectations of new entrants into our workforces.

At the firm/ business level, most organisations have long realised that there is not much point making five year plans anymore, because the inherent assumptions within such plans will always become invalid within a year or two, rendering such plans invalid, and indeed sometimes destroying value. Instead, it seems more sensible to make one year plans, relate these to operational capabilities and the order book, and focus on developing key capabilities. These capabilities should be the focus of investment in our professional service firms, being aimed at coping with the fast-changing world referred to above. Specifically, these are agility and resilience, that refer to the firm’s ability to flex as conditions around it, such as market forces and technology, change, and the ability to anticipate, cope with and achieve advantage from such changes. These capabilities require great leadership and a ‘growth’ mindset, culture to suit, and flexible systems that will deliver the services that remain at the cutting edge of meeting clients’ requirements in our dynamic circumstances.

At the individual level, we should all enhance our own personal competitiveness and contribution, by ensuring our personal capabilities make us each ‘fit for purpose’ for the new world volatility.

Some key elements (1) are:

1. Self-leadership, sometimes called distributed leadership, or as labelled in one of my client firms, ‘leadership at all levels’, this means having the right behaviours in place, accountabilities, responsibilities being devolved and accepted by all, for making decisions and delivering on commitments: for everybody. When everyone exhibits these self-leadership behaviours strongly, culture and people management become easy.

2. Marketing, where indeed everybody in the firm is involved in marketing, being the positioning, profiling, client matching, pitching and profiting from the work. If it’s not a direct marketing role or client facing activity of service delivery, it is an indirect or support role, with a clear ‘marketing orientation’ for everyone to bring to work.

3. Strategy and operations, involving contributing to and implementing the firm’s vision and strategic priorities, linking these to our everyday activities, and pursuing ‘operational excellence’ in terms of right first time, waste reduction and lean / flow work systems in what we produce and deliver to clients.

4. Sustainability/ ESG (environmental, social, governance) represents a growing opportunity for contributing at the individual, project and firm levels to a broader set of outcomes than purely financial, finding win-win solution for all stakeholders, through ‘doing well by doing good’, and engendering a ‘sustainability orientation’ in firm culture.

5. Innovation, including digitalisation-enabled transformations are sweeping through industries and economies, driving efficiencies and service levels to new heights, and leaving laggards behind, requiring us all to be capable of getting on board.

6. Implementing change and improvements, critical in these times of volatility, because of the agility and resilience needs of our firms, requiring open minds in all our staff, and indeed a hunger for improvement and a rejection of the old, outdated approach of ‘if it isn’t broken, don’t fix it’. In 2022 and beyond, we must break ‘it’ and transform it to something much better, ahead of the exogenous driving forces and our competitors.

"At the firm/ business level, most organisations have long realised that there is not much point making five year plans anymore, because the inherent assumptions within such plans will always become invalid within a year or two, rendering such plans invalid, and indeed sometimes destroying value.”

Some great examples of well-established businesses in other sectors I have recently researched are Rolls Royce (jet engines), Netflix and Bank of America, that have ‘remade’ their business models based on innovation and business model transformations, all of which required their workforce to be highly dynamic, open minded and able to bring a ‘growth mindset’ to work. Rolls Royce changed its whole business model, from selling jet engines to ‘power by the hour’, using artificial intelligence and cloud technology to servitise its offerings, and create significant new value for customers. Bank of America came out of the GFC essentially broken, then revitalised its whole business using digital technologies that created much new value for customers, employees, and shareholders. Netflix transformed and grew using AI and cloud from snail mailing DVDs to the global streaming giant and content producer it now is.

For professional service firms such as consulting engineers, the forces of change that are upon us can be seen as an opportunity to transform, at the business strategy and business model level, the project level, and this requires us to each re-equip personally to achieve new levels of personal and business resilience and dynamism. These elements, detailed above, are forecast to increasingly be the ones that decide who wins and who loses over the next decade.

The six aspects of personal development outlined above deserve reflection and commitment to take on alongside our technical (e.g. engineering) skills, as we deal with what is now being labelled VUCA (volatility, uncertainty, complexity, ambiguity) in our business environment. Engineers and others who are strong in these six aspects will be able to contribute strongly to the future of their firm’s trajectory. Our sector’s business leaders will find that investing in these capabilities in their workforce is one of the best strategies they can possibly employ.

Dr Danny Samson

Is a Professor of Management at the University of Melbourne, and Director of Consult Australia’s Professional Services Excellence short-course.

(1) Consult Australia's Professional Services Excellence short-course covers these topics in depth