Research shows that effective organizations display two characteristics simultaneously: efficiency and adaptability. The efficient organization follows well-structured, stable routines to deliver its products or services in large quantities with high quality at low cost. In a stable world, efficient organizations may be successful. But in a changing world, organizations also need adaptability. While efficiency implies mastering routines, adaptability means mastering the process of deliberately changing routines.
Adaptability is a proactive process: it allows the organization to deliberately and continually change and create. It entails deliberate discontent — discovering new needs to be met and problems to be solved, finding new things to be done, and adopting new technologies and methods before the competition. Adaptability is disruptive. It requires looking outside the organization for new opportunities, problems, trends, technologies and methods that may dramatically improve or change routines or introduce completely new products and services. Adaptable organizations anticipate customer problems and develop timely solutions. They deliberately and continually change how they do things to improve quality, raise quantities, reduce costs and stay ahead of competitors.
Organizations that build concrete strategies allowing them to confidently and capably shift the balance between adaptability and efficiency will be well positioned to adapt and prosper in volatile economic times, such as today’s environment. And while the results of emphasizing adaptability may take longer to appear than the results of an emphasis on efficiency, the long-term success of the strategy can be found by looking at Japan; While decision-making in many organizations in North America is driven by the next quarter’s results, Japanese organizations tend to favor long-term planning and reporting.