Failure to develop a competency in responding to change leaves you scrambling
If you’re like most companies, you’re dealing with increasing demand volatility, shortening product lifecycles and an increasingly globally distributed fulfillment network and supply chain. In the quest to become more demand-driven, you’ve no doubt realized that you can’t plan the customer.
Unfortunately, if you’re like most companies, because there is no systemic way to respond to change, you find yourself scrambling everytime something doesn’t go according to plan, and this is become the norm. The result is a constant feeling that you’re just hanging on.
Many companies have invested a lot of money in automating the lowest levels of decision making. Significant investments have been made in automated call centers for example, where most of the decisions are relatively low risk to the company. Yet, at higher levels of the organization, where critical business decisions are made daily that impact customer satisfaction, profitability and a host of other business critical metrics, there’s little to no automation. These people are required to make rapid decisions with significant impact but are left to scramble to try to determine the right course corrections to make to respond quickly and effectively.
I remember talking to a large equipment manufacturer a couple of years ago. They shared the story of a customer wanting to make a product configuration change right up to the last minute. This company had to quickly assess the request and commit to the customer on whether or not they could satisfy the request, and needed to know not only if they could do it, but if they could do so profitably. Three supply chain staff collaborated together over the course of two days to evaluate options, understand the impacts, etc. They eventually brought their analysis to their management - an eight page spreadsheet printout taped together into a single report. The manager looked at their work and said “let me understand this, we spent 6 man days analyzing this, and we still don’t really know if it’s possible or not and what the impact of doing so would be - right?” The answer, of course, was that the manager was correct. The company had never invested in a competency to respond to change and were left scrambling and just hanging on. This was becoming much more common.
There’s a significant opportunity to deliver a breakthrough in productivity and operating performance - performance that can impact both the top and bottom line - by enhancing the organization’s ability to respond to change. Companies are conditioned to focus on improving their planning capabilities. That’s a worthy investment, but increasingly it’s how you deal with the fact that things don’t go according to plan that dictate how you do in the market.
