The Liquid Organization

While disruptive forces continue to batter industries, firms need to increase their liquidity. Organizational liquidity refers to the speed, flexibility, scalability, acceleration, and ambidexterity of an organization; and liquidity positively affects performance. Liquid organizations have higher speeds or higher velocity in developing and executing strategies compared to their competitors. In addition, liquid organizations can change direction and accelerate in any direction. Finally, liquid firms are ambidextrous. They can take advantage of existing competencies (exploitation) while simultaneously discovering and harnessing new opportunities (exploration). The employees of a liquid firm are also ambidextrous, as they can work in multiple functional areas. 

There are four types of organizational liquidity: liquid delivery (fast, high quality, and innovative solutions); liquid infrastructure (scalable people and processes); liquid people (workforce designed for flexibility in size, ability, and movement across functional boundaries); and liquid geography (ability to work across geographies and time zones). Our research finds that most firms still have low levels of overall liquidity.

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. 

To take advantage of the post Covid-19 growth supercycle, countries and firms will need to increase their liquidity. 

To download the latest white paper on liquidity, please click on the download buttons.