How to Adapt to Constant Change
Harmonising business strategy and delivery to the current environment
Today,companies have to change constantly. This is the nature of a paradigm shift. Disruptions occur at a pace unimaginable even a few years ago. If companies want to survive and thrive, they need to harmonise their priorities with the situation. This means becoming adaptive by:
- Listening to the paradigm shift
- Reflecting on their inner capacity to adapt at speed
- Harmonising strategy and delivery with the demands of the changing environment
This article is about the final step, harmonising strategy and delivery. The key to this is redefining strategic priorities toward making the company more adaptive.
Redefining priorities
30 years of research in paradigm shifts and first-hand experience in transforming companies show that a new starting point is needed for company strategy now. The aim of transformation projects is to create a different company in the end. What is different now is “what” the new company will look like. Instead of just focusing on being “digitally enabled” or “data-focused”, the company should be looking at a broader transformation. This transformation is toward a more adaptive and innovative company. This means changing how they give priority to the initiatives and projects.
Facing uncertainty
I will use the example of a manufacturing company to show how this refocusing works. Before the lock down, the company had transformation projects it was planning or working on. One set was focused on moving its data and applications to the web. Another set was designed to make its supply chain more efficient through digital tools and lean processes. The final set was making its distribution chain more digital.
All this changed as a result of the lock down. The offices were closed and so were the ports and airports. Customers stopped buying products. As a result, distributors could not pay the company. The company could not pay the suppliers or its employees.
Now that the lock down is easing, the problems have changed. People are starting to buy the company’s goods again, but not in the same quantity as before. The company also retooled one of its plants and started producing new healthcare products. They had also managed to set things up so its administrative team could work from home.
The business had managed to survive the last quarter. There is major uncertainty, however, about what will happen in the next two years. Analysts have identified four different future scenarios. Each one, however, would require a different set of responses.
With these conflicting scenarios, how could the business prioritise its transformation projects? For example, one of the analysts’ scenarios was built around a cash crisis. In another, revenue from the new products replaced the losses in other ones. One scenario had more waves of lock downs. Another was based on the pandemic restrictions ending after a vaccine was found.
What does success look like?
The question that companies are facing is “what is going to happen next?” If they find an answer, then they can make plans and prioritise projects. The problem is that each answer about the future we come up with is at odds with the next.
This why companies should shift focus as the old definitions of success are no long relevant. Success is now about being adaptive, resilient and innovative. This means that some of the projects in the transformation portfolio are no longer important. Others will have to be rethought. New projects will now be critical.
In order to implement this, companies need to define what adaptive, resilient and innovative is for them. While each company will have its own vision of success, there are common characteristics:
- Developing the process of quick decision-making, testing them and not being afraid to change the decision if it does bring expected benefits.
- Building a culture that can handle uncertainty by focusing on learning and creativity
- Focusing on resilience to manage the risk of unexpected disruptions
This change of focus has an impact on how the company does business. Financial models will have to include “costs” for innovation and resilience. Communication becomes even more important. The leadership team needs to communicate this vision convincingly. They also have to listen even more carefully. They need to hear how the environment is changing so they can respond.
This sounds like a daunting challenge, but it can be done. Many companies have already made steps toward being adaptive as a result the lockdown. With some guidance and support, leaders can learn the lessons of the last few months and refocus their strategy on adaptability. If they do not, their businesses will continue to struggle to survive. This is stark choice that all companies face today.
