Being future ready in business.
Sarah Godfrey 2020
The new buzz word, ‘disruption’ isn’t just business-speak. It is the way of the future. Looking forward we need to be discord directed. Not in the paranoid, doom and gloom perspective of the world and business. Rather in an optimistic, come and get me, resilient way. Think, readiness for the expected chaos that has a ironic predictability about it.
According to the McKinsey Global Report 2020, disruption to business, be it climate events, theft, cyber attacks or as we experienced biological events, occur with some regularity. Although the sample size is significantly small, the report indicates the following:
We should expect some form of disruption to our businesses;
- 1 to 2 weeks every couple of years.
- 2 to 4 weeks every three years
- 1 to 2 months every four years and
- Over 2 months disruption every five years.
These suggested frequencies are not set in stone and may not apply to all businesses. In fact the more your business relies on a centralised base, the more likely it will be affected by disruption elements. Safe strategic sourcing can leave your business vulnerable to world events. It can delay rebounding from disruptions to manufacturing, consumer needs and supply chains.
Tips to get discord ready.
The McKinsey report advises to think long term. Where most companies will lose an average of 40% of a years’ profit, every decade, due to disruption and every five to seven years, 100 days of production, a risk diverse policy needs to be incorporated into the culture of every business model. The report suggests we should be incorporating into our strategic planning:
- Stronger risk management procedures
- Improve transparency.
- Build redundancy in our supplier and transport networks.
- Hold more inventory.
- Reduce product complexity.
- Have flexible production across multiple sites.
- Improve financial and operational costs to respond to and recover from disruption.
It might be time to embed a disruption costing into our balance sheets that allows for the regularity of discord and chaos. Our reactive process as is current that ignites only when the disruption occurs, is a thing of the past. Manifesting the likelihood of disruption into out business models will engage creative and innovative planning, conceptualisation and engagement with source and production chains, employees, management and consumers.
What your business can do.
To expand on this, Mike Ross BDC CEO Excellence Retreat proposes that we should be valuing adaptability and looking towards future disruption instead of the “everything is fine” attitude pre COVID-19. He suggests part of the operational design of a business includes a team to manage a ‘Disruptive Change Matrix-DCM.’ The DCM monitors the impact and probability of disruption, allowing the business to act and prepare for an event. A proactive risk management style instead of reactive.
A team built to manage discord and chaos becomes an early warning system, with the capacity to guide CEO’s and organisations to make changes, adjust and engage in business, climate and scientific events. In this way the knowledge learnt can be used to navigate business through inevitable disruptions and plan for recovery. In smaller businesses, you can create a DCM position and nominate one employee who demonstrates the confidence and interest to perform the role.
And, you can start now.
Have strategic plans already in place, open enough to be adapted and changed as required. A foundation of resilience and recovery planning, as part of the culture of the business, gives security and transparency to employees and staff.
Have Creative Centres in your business to encourage ideas and brainstorming, engaging your teams in the ‘What if’ scenarios and bonding the belonging of a unified commitment to tackling the disruptive events.
Review your supply chains, flexibility and employee resilience in preparation for whatever disruptions lay ahead. Don’t be afraid to ask questions and challenge the status quo. What can be done, moved, changed and resourced?
So much is out of our control in the business world. We cannot stop disruption.By controlling what we can, gives us a professional and financial edge, speeds up recovery so we are better at taking the hits, makes failure part of an expected business framework and builds resilient and ready teams.
If you want to implement a Creative Centre in your business, contact Sarah directly.