Post-COVID Transformation: Why Savvy Executives Resist The Great Make-Over
Updated: Aug 2, 2022
So commercially impacting was the global pandemic, it’s fair to imagine that few chief executives slept well for months. No industry remained unaffected by COVID. Indeed, most sectors saw substantial and sometimes permanent disruption in the form of people availability, supply chain delays, hampered customer support, transportation woes; and in more dire circumstances, it was the difference between keeping the lights on and going out of business.
In late summer 2021, galvanized by mass inoculations, the world took a tentative step forward. Businesses dusted themselves off and began to re-group, to rebuild, and to plan. Yet normally where business plans would be forward facing, it was the hindsight planning that took centerstage.
The sobering truth was that even with the best high-tech operations most businesses were caught off-guard by the scale of impact. And while COVID19 was understood to be a once-in-a-lifetime pandemic, no chief executive wanted to be facing that type of crisis again.
A year on, it's unsurprising that transformation remains at the top of executives' list of concerns heading into 2023.
(PWC: 2022 PWC CPO Survey)
Those that were fortunate enough to survive or even thrive during the economic downturn managed to do so because they were able to adapt business models, make tough decisions quickly, and had resiliency in their supply chain operations. Core to this was reinforcing people resources and shoring up logistics and supplier liabilities to mitigate a repeat disaster.
And boards and investors wanted reassurances of positive returns. So the inclination to batten down the hatches was a worthy one. But with so much loss of profit, waning customers, and re-sizing of personnel, costly transformations had be avoided.
Where to Start? Top 5 Focus Areas:
It’s tempting and understandable to want to do a drains-up scale of transformation. Beat the competition. Disaster-proof the future. But experts argue that this mindset should be avoided.
Why? Because it’s costly, time consuming, destabilizing for operations and returning personnel, and most organizations won’t see the levels of ROI needed from that scale of change.
Sometimes simple is better. And with budgets still in recovery and recruitment slow from The Great Resignation, caution should be paid to focus on the necessary.
Re-grouping after so much disruption will test the mettle of even the most-steely leaders. This is where the great four P's really pay-off: Pause, Prioritize, Plan, and Price. Avoid the reactionary. Panic just leads to more panic, insecurity in the ranks and short-term decision making. Consider these five focus areas instead:
1. Agree your ROI-based measurable outcomes in advance.
It's a rare company who's customer offerings and steady-state operations haven't changed on the back of COVID. Look at this as an opportunity to regroup and re-confirm priorities with your leaders and investors. Investment hereafter will be tight - every penny will count - so make sure you've tested the proposed priorities and the new path with meaningful and measurable outcomes, i.e net neutral customer change, X% increased sales in a specific market, release of a new product feature. Note that these are not broad, sweeping ambitions. Instead, each of these are examples of tight, specific niche targets. The tighter the better to measure and the easier to fund and over-deliver.
2. Look at your native processes.
This recommendation often inspires upturned noses with my clients. Yet it's one of the best places to start, and it's one of the easiest arguments to overcome. Why? Because if done properly and with the right amount of change management it can yield faster results with minimal disruption to operations and employee morale.
Set-up a small task-force for a limited 90-day sprint. Isolate what is working well, survey the owners and internal customers of that process. Amplify and do more of what's working well.
3. Test the Build vs. Buy theory
Recognize that it's ok to feel a bit beaten up by COVID, so beware the temptation to jump to the latest technology or digitalization solution thinly veiled as the silver bullet for all ailments.
See point 2 above: the outcomes from that exercise will simultaneously identify the processes that aren't working well. Use those findings to prioritize and rank those that would benefit from technology or outsourcing to increase profitability, conduct a market review, and observe other businesses that preceded yours on the journey.
4. Identify and limit the processes that appear to be broken
Break these down, repeating steps 1 & 2 above and ask yourself these questions:
a. Can process amendments provide a “good-enough” bridge for the operation?
b. What level of policy compliance do your functional vs broken processes achieve?
c. What do your chief business partners want from the change? Is it perceived or real?
d. What is the true ROI if the change fails or meets only partial compliance? This should be measured based on realistic compliance uptake. This is a metric that fails regularly amongst clients primarily because they don't take the time to measure the expected ROI. Partner with your CFO's organization and take the time to do this.
e. Which native changes will you implement to complement the technology change? Technology changes alone rarely succeed. Policy and process are the best friends of an enterprise system update, and these rely heavily on change management and measurable outcomes.
5. Commit to deliverables in 90-day sprints
Last but not least - do this. Every company runs projects in a slightly different way, so you should defer to your program office to move you forward. But don't discount the power of these small- but-mighty targets. Studies have shown that material step-change is more manageable if the project goals are small and measurable, and 90 days allow enough time to see results while providing a buffer for any corrective measures or change plans. Not fast enough? You can run these in tandem delivery - don't be confined to sequential pipelines.
Want to know more? Spring CPO is a Fractional CPO Advisory helping start-ups, small/medium businesses, and private equity groups to transform better and faster. Contact us today for a free consultation: info@springcpo.com
#fractionalcpo, #chiefprocurementofficer, #transformation, #supplychainstrategy, #supplierecosystem #CSR, #ESG, #sustainability, #corporatesocialresponsibility