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The Liquid Organization

Liquidity Will Define the Next Generation Competitiveness

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The Liquid Organization

Our Publications
The Liquid Organization

Liquidity Will Define the Next Generation Competitiveness

Our Publications
The Liquid Organization

Liquidity Will Define the Next Generation Competitiveness

Button
The Liquid Organization

Liquidity Will Define the Next Generation Competitiveness

Button
The Liquid Organization

Our Publications

Liquidity Will Define the Next Generation Competitiveness

The Liquid Organization

In this era of disruptions, traditional industries face two strategic imperatives: first, creating growth in stable industries and, second, addressing dramatic environmental changes. To address dramatic changes in the environment, firms need to increase their speed and adaptability. We provide the blueprint for an organization form labeled the “liquid organization.” Liquidity refers to the speed, flexibility, scalability, acceleration, and ambidexterity of an organization, positively affecting firm growth. We propose the “Three R” model—restructure, reskill, and rescale—to increase liquidity. Firms need to move towards team structures, enhance organization and employee learning, and increase adaptability through transformation. Finally, our research finds that we are entering a period of supercycle growth, and liquidity will enable countries and firms to take advantage of opportunities. More details are provided in The Liquid Organization section.

The Age of Disruptions

We are in an era of unprecedented change, as firms face environmental and competitive disruptions that have changed how firms function. Firms currently face disruptions associated with global connectivity, increased complexity, fast innovation cycles, and quicker regulatory changes. The latest disruption is the Covid-19 pandemic that has crippled global economies. In examining disruptions, two significant drivers emerge. The first is environmental; the second is competitive. Environmental disruptions are “non-linear” because they are unpredictable and do not follow a linear pattern regarding growth over long time horizons. Competitive disruption primarily derives from traditional or emerging competition, and digital technologies, coupled with more accessible financing, have increased the pace of competitive disruption. Our research suggests that organizational liquidity allows firms to effectively initiate and address disruptions. More details are provided in The Age of Disruptions section.

Increasing Personal Liquidity

For a firm to become liquid, its people need to become liquid. Our research shows that increasing personal liquidity is a top-down process. The senior leadership of a firm first needs to increase its liquidity before asking their direct reports to increase their liquidity. Executives need to measure and improve their liquid delivery (focusing on the quality, speed, and innovativeness of delivery), liquid people (focusing on learning), and liquid infrastructure (focusing on scale and adaptation). When senior executives drive the increase in personal liquidity, the results are extremely positive for the firm. More details on measuring and improving personal liquidity are provided in the Increasing Personal Liquidity section.