Strategic Resiliency in Large Corporations
Strategic Resilience = Insulation + Innovation
Strategic Resilience can be viewed as a two-pronged approach. One constantly aims to improve and insulate current core functions. The other leverages a flexible workforce and robust project management strategies to find new revenue streams, reduce costs and, in one word, evolve.
In order to support the goal of Strategic Resiliency, we can develop five complementary strategies covering the following areas:
1. Innovation
2. Supply Chain Resiliency for Core Functions
3. Automation and Continuous Improvement
4. Organizational Flexibility (Money, People, Systems/Processes)
5. Evaluating ‘Strategic Decay’ and other sunsetting opportunities
Innovation
Establishing multiple revenue streams so you’re never too reliant on one single core function is first thing that comes to mind when thinking about how to insulate oneself from shocks to core functions.
This means also strategizing about how we evaluate and invest in these new initiatives. The pace of change is increasing, and that requires both the ability to change quickly and knowledge of where to point your resources. In this case, innovation is the process of testing new ideas and figuring out where to point your resources.
Supply Chain Management
No matter what our core functions are or how fast they change, we will always need to protect them. So just as we never want to rely too much on one core function, we don’t want to rely on one supplier or risky suppliers to support our core functions.
Establishing multiple credible vendors that could service our Core Functions and absorb each other’s capacity if there’s a failure somewhere in the chain should be a primary goal of any Strategic Resiliency plan.
Automation and Continuous Improvement
A company’s resistance to bloat is a key factor in its ability to be agile and resilient (and profitable). Continuous improvement should be re-enforced and incentivized at every level, even for non-core functions.
Automation of existing tasks will be the ultimate driver behind a flexible workforce. We need to eliminate the current work if we’re going to be able to drive people to new roles and opportunities.
Organizational Flexibility
Having truly flexible resources is the skeleton key for Strategic Resilience. Both in the way you create flexible resource and the way you manage them. When it comes to change, embracing a culture of lateral movement and smart project management is the only way to evolve at pace.
The primary resistance to any effort like this (ie: Lean Six Sigma, RPA, Strategic Resilience) is fear. People don’t want other people watching them do their jobs, telling them how to do their jobs, or (obviously) cutting their jobs. All these concerns are addressed and can be channeled into enthusiasm if we have a good plan for the re-allocation of human capital (and good, clear communication of that plan).
The money should follow the people and the ideas. Investing in many potential ideas in the form of early stage testing while divesting in strategies that have been identified as sunset opportunities.
Identifying Strategy Decay and Sunset Opportunities
Identifying Strategy Decay is a cost prevention method that ultimately insulates us from shocks by shutting something down before we’re forced to. We should constantly be evaluating the value prop of all products, so product teams are appropriately sized for their current and expected market size by way of planning, not sudden shut downs.
Identifying and planning for sunset opportunities is different from automation in that we can automate something but retain the function. In the case of strategy decay, we’re saying this isn’t working or wanted anymore - or at least that the marginal value is shifting and should be re-evaluated - so we can get ahead of the shifts. This supports flexible resources from a people, systems, and money perspective and is driven by good Product/Project Management strategies.
All functions and sub-functions should be periodically re-evaluated, ideally with broad plans for potential sunsets, such as ‘like-to-have’ initiatives where those resources can be re-allocated.
This is ideal for smaller, labor-intensive functions that don’t have a role in attracting or retaining clients, but is crucial to monitor at the high-level as well so a core product doesn’t suddenly become dead weight.
Synopsis
The Scale of Strategic Resiliency
This two-pronged approach views Strategic Resiliency as striking a balance between the efficiency and security of today’s operations and the creation of tomorrow’s, with strategic decay as the key to maintaining a good balance.
Our effectiveness at sunsetting the right projects at the right time and making the judgment on where those resources go is the key to maintaining a good balance.
Organizational Flexibility
Another way to look at it is as a lifecycle. We innovate (develop a product/service), insulate (protect the supply chain), automate (improve operations), and finally sunset our products, with flexibility providing the bridge to the next cycle.
