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In a previous article, we specified the four strategic areas to focus on and the six organizational dimensions that should go along to be successful in the comeback. We also have discussed what we need to do to recover revenue -The first strategic area to focus on- which is crucial on the way towards stability.
The recovering of revenue goes hand in hand with rebuilding operations in a way that is suitable under the circumstances.
Demand patterns for products and services across sectors have radically changed. At the same time, it has been striking how fast many companies have adapted, creating radical new levels of visibility, agility, productivity, and end-customer connectivity. Now leaders are asking themselves: How can we sustain this performance? As operations leaders seek to reinvent the way they work and thus position themselves for the next normal, five themes are emerging.
1. Reimagining a sustainable operation’s competitive advantage. Dramatic shifts in industry structure, customer expectations, and demand patterns create a need for equally dramatic shifts in operations strategies to create competitive advantage and new customer value propositions. Successful companies will reinvent the role of operations in their enterprises, creating new value through far greater responsiveness to their end customers; including but not limited to accelerated product development and customer experience innovation, mass customization, improved environmental sustainability, and a more interconnected, agile ecosystem management. Dimensions needed: Customer Experience – Innovation – Transformation – Leadership – Strategy.
2. Embracing the future of work. The future of work, with the use of more automation and technology, was always coming. Now it is just being accelerated and demonstrated it works. Employees across all functions, for example, have learned how to complete tasks remotely, using digital communication and collaboration tools. In operations, changes will go further, with an accelerated decline in manual and repetitive tasks and a rise in the need for analytical and technical support. This shift will call for substantial investment in workforce engagement and training in new skills, much of it delivered using digital tools. Dimensions needed: Employee Experience – Transformation – Innovation.
3. Building operations resilience. Successful companies will redesign their operations and supply chains to protect against a wider and more acute range of potential shocks. In addition, they will act quickly to rebalance their asset base and supplier mix. The once-prevalent global-sourcing model in product-driven value chains has steadily declined as new technologies and consumer-demand patterns encourage the regionalization of supply chains. For sure this trend will accelerate. This reinvention and regionalization of global value chains are also likely to accelerate the adoption of other levers to strengthen operational resilience, including increased use of external suppliers to supplement internal operations, greater workforce cross-training, and dual or even triple sourcing. Dimensions needed: Innovation – Transformation – Strategy.
4. Accelerating end-to-end value-chain digitization. Creating this new level of operations resilience could be expensive, in both time and resources. The good news, however, is that leading innovators have demonstrated how “Industry 4.0” (or the Fourth Industrial Revolution suite of digital and analytics tools and approaches) can significantly reduce the cost of flexibility. In short, low-cost, high-flexibility operations are happening already. Most companies were already digitizing their operations before the coronavirus hit. If they accelerate these efforts now, they will likely see significant benefits in productivity, flexibility, quality, and end-customer connectivity. Dimensions needed: Innovation – Transformation – Leadership.
5. Rapidly increasing capital- and operating-expense transparency. To survive and thrive in the middle of the economic fallout, companies can build their next-normal operations around a revamped approach to spending. A full suite of technology-enabled methodologies is accelerating cost transparency, compressing months of effort into weeks or days. These digital approaches include procurement-spend analysis and clean-sheeting, end-to-end inventory rebalancing, and capital-spend diagnostics and portfolio rationalization. Companies are also seeking to turn fixed capital costs into variable ones by leveraging “as a service” models. Dimension needed: Strategy.
6. Acting. To keep up, companies have moved fast. Sales and operation planning used to be done weekly or even monthly; now a daily cadence is common. To build on this progress, speed will continue to be imperative. Companies that recognize this, and that are willing to set new standards and upend old paradigms, will build a long-term strategic advantage. Dimensions needed: Leadership – Transformation – Innovation – Strategy.
Every crisis has a lifecycle, and emotional states and needs vary with the cycle’s stages. What leaders need now is not a predefined response plan but behaviors and mindsets that will help them to look ahead. We need leaders with the right temperament and character. Leaders that have the consciousness to maintain a balance that is neither too negative nor overly optimistic; but realistic. And supported by different scenarios that consider the key variables within a well-thought strategy.
Do you know what areas to rebuild first to get the maximum benefit in the lowest time?
Do you know how to establish priorities?
Do you know how to do the rebuilding?
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The answers to those questions are some of the key components to rethink the organization, which will discuss in the next article.
RECOMMENDED TOOLS TO “REBUILD OPERATIONS EFFECTIVELY”:
1. Customer Journey – To maintain or create exceptional Customer Experiences.
2. Employee Journey – To maintain or create exceptional Employee Experiences.
3. Business Model Canvas – To visualize your business and explore new ways of restructuring it.
4. Value-Effort Prioritization Matrix.
5. Process Journey – To get a clear picture of your process which enables you to analyze and improve the process.
6. Deadly Wastes Canvas – To identify waste in your processes and find solutions to improve efficiency.
7. Business Model Stress Test – To understand if your business model is future proof.
8. Digital Eco-System Gap Assessment.
9. Agile Operation Model Gap Analysis.
