By Gideon Malherbe, VCI Founding Partner
While it feels like the doldrums, as CV-19 ebbs and flares with no one the wiser on where it’s all going to end, it is satisfying to focus on what we can manage. In fact, what we can manage should be where we spend most of our time.
Hotels, airlines and restaurants got it straight in the face, with restaurants pivoting to pickup and delivery services, even pre-cooked food ensembles for families to prepare at home. Office working flipped overnight to remote work. Hospitals pivoted to telehealth in a flash. Manufacturers retooled to produce the much-needed personal protective gear and ventilators. Best of all, Kodak pivoted to become a pharmaceutical producer.
Two characteristics of this pivoting is notable: The quantum of change – this is not incrementalism; and the speed of change. Decisions are made at a pace now that has never been seen before. Perhaps winners will be defined in this era as those that could turn on a dime and the fantastical speed by which management decided and executed their new strategies. Let’s look at the core rules of this new business theater.
Mega Trends are real: As corporate scenario planners for over 30 years, the most sustainable business success is a function of developing core competencies – and they take years to master. Whether an internal design skill, Artificial Intelligence algorithm or simply developing a culture of innovation, the company has to stay on track for those proverbial 10,000 hours before they can expect any real sustainable rewards. To do so implies a long view – and that means not reacting to the crisis of the day, but to deeply appreciate the second and third order implications of current events. It is into these megatrends that we plan the company’s competitive position, its contribution and rewards. We have the glaring environmental and social justice hurdles to overcome while we design new operating companies to work into the flow of megatrends like digitalization and health & wellbeing. Into these decisions flow our understanding of structural changes in global politics, social behavioral resetting, availability of financial instruments and tools never seen before, a reset of labor and work areas, and most importantly, a readiness for people to adopt the new.
About people: During these times of “all hands on deck” and massive systems changes, it soon becomes clear that it is people and only people that can cause the required changes. Many now work from home, and after the initial chunkiness of screen-based teamwork, now participate daily in cross functional problem solving and ideation sessions. Initial commitment even pushed up productivity from home-based workers. Companies running ahead are noted for their leaders communicating openly and often, with empathy and honesty, both pushing hard for the changes whilst deeply appreciating the potential sensitivities of home stresses and trauma. Commitment is also demonstrated by curbing layoffs and finding further support for employees, securing aid for employees and accepting executive pay-cuts. The challenge now is to effectively tap employees’ collective intelligence through, for example, spending more time explaining scenarios and why leadership has adopted certain strategies. This underwrites the company as a whole to make faster, better decisions, pushing digital transparency throughout the organization to help further encourage collaboration and non-hierarchical solution-seeking.
Innovation and change resilience: Think of this as: Positive innovation activities in the organization can be the “pull” driver for change. Not only product and engagement innovations, but innovation spanning all facets of the organization. Every work process, every action and every piece of equipment is an unfilled canvas ready for the grand remake forced by CV-19. Innovation is also breaking the solid-state supply chains we have become used to by creating cracks that allow for flex to nimbly respond to sudden spikes and slumps. I don’t like it when Agile, Lean, 6-sigma or any continuous improvement system subordinates innovation. We prefer to see developing a culture of innovation as the predominant strategy with Agile, Lean and 6-sigma as tools. This culture of innovation also underpins the “just in case” coalitions of suppliers as the external network all participate to focus on what they do best to make the whole eco-system successful. CV-19 has further pushed players to even partner with their competitors, sharing fleets, parts and people. With a “digital everything” approach to underwrite transparency and decision-making speed, the crisis has also sharpened focus on accelerating tech tools like AI, cloud, robots and automated systems. Smart solutions drawing people to change is now much more effective than attempts to force change into an ecosystem that is already burned out by the pandemic.
A Networked world: Made possible because of digital technologies, the math of calculating success shows that collective contribution to making an eco-system work outperforms the companies that hold to closed boundaries in a purely self-serving way. In the age of abundance, with more of everything available – including ideas and innovation – the self-serving business is in fact starving itself from all the fruits of the new normal for the meager benefits of its own secrets and dearly held slice of the economy. Executives are seeing that collaborative innovation projects with suppliers, universities and labs bear much better fruit than trying to be self-reliant or rely on pure contract work. Similarly, integrated platforms in the value stream reduce friction, error and speed, the three frustrating elements of any analog system. Why have dozens of procurement people in an analog world when Amazon can effectively execute 80% of your orders for a fraction of the cost. The crisis has also brought forth a deeper involvement of government into the business sector that will also motivate “good citizenship” actions furthering an ecosystem’s view of the world. This crisis did indeed trigger the need for an enormous repair to damage done and a resetting of the world economy. This will not happen without a deep rethink about how we engage with people in the work system, and how we infuse our now semi-virtual companies to drive innovation and redefine all boundaries we previously took for granted.