Everyone adapts… everyone who is not dead yet, at least!
Animals, individuals, organizations even the plants. So, then why do some organizations respond better than others to evolutionary and revolutionary changes which are getting more frequent & severe?
We all have seen organizations, who thru all times (even in as disruptive period as now in 2021) are waiting for old “Normal” business times to come back and unwilling to adapt to the new. For them, good old times was when things were stable and the disruptions are a temporary blip which must be coped with rather than adapted to in order to thrive on. We came across an organization (in infrastructure operations) which has spent ~$70m over last 4 years to replace their billing system and refusing to change course almost 18 months into a global pandemic which has reduced their revenues by 60%.
What are tell-tale symptoms of such organization? In our experience, here are the top 3:
- Centralized, hierarchical functions:
Organizations built for thriving thru changes in a VUCA world are getting increasingly organized as network of cross-functional, flat and autonomous teams built around missions. While that may sound chaotic (& it is, especially when compared to the classical hierarchical models built for efficiency needed for the industrial revolution of last few centuries), there are multiple examples of such organizations who have successfully thrived thru normal and not so normal times.
For inspiration, one may consider the org model of Uber which not only helped them grow to market cap of ~$92b in last decade.
Especially look at the section on how autonomous teams adapted locally for rapid growth for the organization.
“Speed requires local decision making and empowerment, and Uber gives City Ops teams all the resources to succeed: ready cash, motivated talent, and flexible technology.”
- Traditional supply chain mindset:
This is an easy trap for senior management to fall in & get busy with making more efficient… till the point it no longer makes sense in the current & future marketplace. The very word “Supply Chain” is literally a misnomer in a world which is getting more demand driven and network dependent. Adaptable organizations recognize their core mission of staying close the customer and work with an increasingly networked ecosystem of partners, suppliers, collaborators and even competitors to serve their mission effectively. For example, a pretty traditional, big-box retailer Kroger not only started home delivery in record time with partner Ocado but also shared their pandemic playbook of lessons learnt with the ecosystem.
Dont miss the part on the ecosystem play part as described by the CEO Rodney McMullen:
“Under Restock Kroger, we have made significant strategic choices over the last several years to transform our business model and to redefine the customer shopping experience, partner for customer value, develop talent and live our purpose. We have invested aggressively in technology to establish a seamless digital eco-system and we have made incremental investments in Fresh, our brands and personalization…The benefits of the changes that we have been making to our business model were accelerated by COVID-19. For example, our heavy investments in technology enabled us to reliably sustain the incredible, almost overnight increase in demand for our pick-up and delivery services.”
Rigid processes, efficiency over experimentation:
Efficient Business process, that has been the mantra for decades for most organizations. In best of the times, it creates an efficient, time-bound and predictable experience. Mostly, it is a catch all phrase when the lack of response, transparency or delays cant be explained any more.
Modern organizations, however are re-designing themselves in a way to so that they can improve and adapt to changing market ecosystems. Take the example of RBC bank, one of the largest in Canada. Frankly, banking industry is not known to be adaptable & responsive with their processes. However, 6 months into the pandemic, they enabled both the business & personal customers to open their account completely digitally (author is a 1st hand beneficiary of this service, when they were able to remotely open the business & personal bank accounts at RBC Canada, while physically being in USA)
RBC makes banking more accessible with fully digital account open processes
Sean Amato-Gauci, Executive Vice-President, Cards, Payments & Banking, RBC. “The three unique options being offered to clients will allow them to remotely open an account through a simple and secure digital solution, while also enabling connectivity to the expertise of our advisors. And because of the increased adoption of digital banking solutions, we believe clients will enthusiastically welcome the opportunity to open an account when and where it’s convenient for them.”
What is the common thread here? In our experience, most of the adaptable organizations had strong foundation in data driven operations and a leadership culture of decision making based on a mix of historical data as well as current situation signals.
To summarize, plug in the following parameters to assess your organization readiness to thrive in these uncertain times:
S= Signals capture from the market ecosystem,
C= Alignment to the customer centric mission,
N=Network of autonomous, X-functional teams,
D=Data driven insights.