Labor shortages, economic uncertainty, and rapid technological change show that traditional models of business innovation based on periodic transformation no longer work
High-performing companies today embrace continuous transformation, innovation at the front-line, and a culture of growth and mobility. These are new and radical departures from traditional leadership models
Despite Dynamic Organizations achieving higher financial performance, productivity, innovation, engagement and retention (employee experience is 31 times higher), just 7% of organizations qualify as Dynamic Organizations, data from 771 organizations across industries and geographies shows
Building a more Dynamic Organization helps address the labor shortages and disruption in the “Post-Industrial” economy
The Josh Bersin Company, the world’s most trusted HR advisory firm, has today unveiled new findings suggesting that organizations will become increasingly vulnerable to shifts in the market and exposed to worsening talent shortages. It will only be the organizations that become what the advisory firm terms “Dynamic Organizations” that will thrive in this new talent reality. The problem: a mere 7% of organizations qualify as being Dynamic at the highest level, even though the research proves that Dynamic Organizations are an order of magnitude more successful in terms of financial performance, workforce productivity, people engagement and retention, and innovation ability, compared to their peers.
The Josh Bersin Company research, entitled The Definitive Guide to The Dynamic Organization, developed in collaboration with Gloat, reveals that:
- Dynamic Organizations are 31 times more likely to engage and retain their workforce
- Dynamic Organizations are 3 times more likely to exceed financial targets and delight customers and are 17 times more likely to adapt well to change
- Employees in Dynamic Organizations are 20 times more likely to accomplish high levels of workforce productivity
- Dynamic Organizations are 21 times more likely to be highly diverse and inclusive
- One high-performing Dynamic Organization unlocked $21 million of productivity savings in half a year through timely access to the right resources internally, rather than having to hire consultants or bring in contractors to fill capability gaps.
The need for a Dynamic Organization is compounded by labor shortages, accelerating automation driven by AI, hybrid work, stressed-out employees, and inflation all components of the imminent “Post-Industrial” economic era.
To address these pain points and get ahead of disruption, employers must change how they think, plan, and operate by tackling organizational and HR challenges holistically, becoming what The Josh Bersin Company posits as being architected for change on a perpetual basis.
Dynamic Organizations continuously transform themselves with speed and scale, harnessing talent mobility and dynamic teams to meet evolving market needs. Rather than focusing on individual initiatives in turn, e.g., around the employee experience, they adopt more agile structures that can flex in any direction structures that are geared to “skills and work” rather than “jobs and roles.”
There is a long way to go, but a tremendous opportunity for organizations, according to the advisory firm. Organizational dynamism is the second least mature or prominent quality seen among employers today, exceeded only by pay equity. Most chief HR officers and business leaders interviewed admit operating within highly static and largely reactive organizations where the primary focus is on controllable factors such as risk avoidance, efficiency, and repeatability.
Notably, the most mature and advanced Dynamic Organizations identified, including Mastercard, Unilever, HSBC, and MetLife, have totally redefined their HR strategy around the need to build agility, innovation, and growth from the bottom up.
The Josh Bersin Company has also identified a strong correlation between Dynamic Organizations and employers identified as Pacesetters as part of its ongoing Global Workforce Intelligence (GWI) Project, exploring the latest innovation in talent development and management.
The current research is based on analysis of data from 771 organizations across industries.
Josh Bersin, global HR research analyst and CEO of The Josh Bersin Company, said:
“The pace of business change has accelerated. Industries are converging, consumers are becoming more selective, and inflation has slowed growth. This research shows that ability to change is now the number one issue on the minds of CEOs and the old idea of what a business transformation is no longer work.
“Historically we looked at innovation as a step-change process, implemented through skunk-works innovation and periodic company transformation projects. Our new research shows that today’s world is different: high growth companies are always changing. They enable change from the ground up, and that’s what we define as a Dynamic Organization.”
Kathi Enderes, global industry analyst and SVP of Research at The Josh Bersin Company, said:
“Dynamic companies embrace many new approaches to management: they regularly reskill and redeploy employees from slow growth to high growth areas; they embrace what we call a ‘skills meritocracy’ for performance and rewards; and they embrace inclusive accountability, enabling front-line or operations staff to come up with new ideas and create change from the bottom up. While only 7% of companies are fully dynamic today, our research uncovers a roadmap for CEOs and CHROs in every company to consider.”
Jeff Schwartz, Professor, Columbia Business School and author of WORK DISRUPTED, said:
“The Dynamic Organization is a new North star for organizations and for workforce strategy. The results are clear: Dynamic Organizations deliver exponentially better business, innovation, and people outcomes. The challenge is how to accelerate your company’s journey to become a Dynamic Organization and move from static and reactive models to collaborative and adaptive ones. This journey is rooted in embracing both new technologies and insights, and an organizational mindset focused on mobility, agility, and an empowered workforce.”