Evolving in the digital ara: advocating for agile organizations

12.01.2024

This article delves into the necessity of agile internal structures within the trade fair industry, emphasizing the importance of embracing digital competencies, restructuring organizational frameworks, and fostering a demand-driven approach.

By Ton Otten, Director International, Jaarbeurs VNU

The article provides a comprehensive roadmap for digital transformation and agility, offering actionable steps to navigate the dynamic market and seize growth opportunities.

The philosophy of change:
In Giuseppe Tomasi di Lampedusa's classic work "The Leopard" (1958), the core message is encapsulated in the statement: "Everything needs to change so that everything can stay the same." This philosophy underscores the paradox that change is essential for maintaining stability and continuity. Trade fair organizers derive their raison d'être from this principle, leveraging principles throughout the value chain to adapt to changes and trends, staying relevant on both the demand and supply sides.

Challenges Post-Covid-19:
Despite a rapid recovery post the Covid-19 period, the trade fair industry faces a resurgence of challenges in their size-wise unbalanced and mature portfolios. While inflation has boosted revenues, the lack of organic growth, absence of in-house start-ups, and insufficient digitalization threaten the sector's relevance.

Internal organization in the spotlight:
Similar to how trade shows require continuous refreshing, our organizational structure, processes, and culture need more frequent updates during these turbulent times. While cars remain cars and trade shows remain trade shows, everything, including systems, methods, and processes, must change to stay competitive. Generally, our industry tends to lag behind in adopting and effectively integrating business process improvements. The result is that the organization of trade shows is characterized by a high degree of craftsmanship supported by relatively simple digital tools. Sustaining growth demands a shift in focus to transform our organizations into modern, digitally-driven, and adaptive entities.

Digital era and organizational structures:
Organizational structures built on old principles necessitate critical evaluation. Although "Structure follows Strategy" (Chandler) implies the importance of structure, it does not diminish their primary role. Digitally centralized roles, structures with excessive layers, and extensive staff departments are generally not exemplary in adaptability, agility, and innovation. Such structures align less with the current digital era and are unattractive to millennials, not only as employees but also as our future customers. It is crucial to address the underlying issues fundamentally.

Strategy and structure:
After the euphoria of the post-pandemic recovery, the old growth issues are gradually resurfacing. In the article "How to Keep Our Rheingold," (Ton Otten) it is explained that large exhibition companies in the Rhine delta have been lacking growth for almost a decade. External factors like labor shortages, inflation, and geopolitical issues may pose challenges, but they shouldn't be excuses for not striving for growth. A future-proof business operation based on value creation and growth requires a thoughtful strategy and a structure encompassing processes and personnel capable of realizing set goals. This compels us to reconsider organizational structures from the analogue era in the current digital age.

Agility in action:
An effective organization is characterized more by a streamlined structure with minimal hierarchies than by a complex layered hierarchy. The focus should no longer be on structures tailored for economies of scale and supply-driven output. Nowadays, it's about adopting a demand-driven approach to optimize the customer journey and value creation. Thinking from an external perspective to internal naturally leads to a structure with adaptive and innovative product/market teams connected with the outside world. If we take our staff, who are in the market day by day, seriously, we need to rethink the hierarchy. In a successful football organization, the club staff contribute to the players because they know they are the ones who can score and win matches.

New competencies in the digital era:
Creating product/market teams is not enough. The lack of Beta-skills within product teams is another critical aspect. Digital competencies are necessary to recognize and capitalize on growth opportunities. Besides traditional roles, new competencies such as AI/ML specialists, DevOps engineers, innovation managers, and customer experience specialists are required. The natural inclination to centralize these roles should be avoided, aiming for a mix of digital/technical and creative/organizational competencies across all levels of the organization.

Automation and flexibility:
Achieving peak efficiency and effectiveness in your team requires an ongoing business process improvement program. Permanently eliminating redundant routines and finding the optimal balance between automation and flexibility not only boosts the agility of product teams but also serves as a consistent catalyst for change. Undoubtedly, those overseeing day-to-day operations are best positioned to eradicate unnecessary complexity, streamline processes, enhance output speed, and improve quality and productivity. Naturally, they require the necessary skills, tools, and authority to accomplish these objectives.

In conclusion:
There is an undeniable need to integrate digital competencies into an organizational structure that enables synchronization with the external environment and capitalizes on the growth opportunities that rapidly changing markets offer. By taking the following steps, we move closer to our goals of creating value and fostering growth. Here's the roadmap for Digital Transformation and Agility to elevate the organization:

1. Evaluate and rethink organizational structures: Critically assess existing organizational structures based on old principles. While "Structure follows Strategy," structures should actively contribute to adaptability, agility, and innovation. Consider a shift to flat structures with minimal hierarchies.

2. Implement product/market teams: Reason from the outside to embrace demand-driven approaches. Introduce product/market teams as the pivot between the external environment and the organization. Consider these teams as the lever for value creation, akin to the value players bring to a championship team.

3. Develop new digital competencies: Acknowledge the lack of Beta-skills within product teams and invest in digital competencies. Integrate traditional roles with new competencies like AI/ML specialists, DevOps engineers, innovation managers, and customer experience specialists. Avoid centralization and aim for a balanced mix of digital/technical and creative/organizational competencies across all levels of the organization.

4. Automate Routines and enhance flexibility: Permanently eliminate unnecessary routines within processes and automate where possible, maintaining flexibility. Strike the right balance between automation and flexibility to enhance agility without adding unnecessary complexity to product teams.

5. Focus on continuous optimization: Aim for continuous optimization by periodically re-evaluating structures, updating digital competencies, and adapting processes to changing market needs. Ensure a dynamic approach that responds to new challenges and opportunities in the digital era.

Contact: ton.otten@jaarbeurs.nl