The Spanish flu. The Great Recession. Two World Wars. The end of the of the cold war. The fickle IT Boom. And of course– the COVID-19 pandemic.
These are just some of the disruptive forces that have reshaped the world over the last 100 years. These disruptions impact the business world in various forms – financial crisis, natural calamity, a rapid change in customer demand, or emergence of an innovative start-up. The current disruptions forced on us the by COVID-19 pandemic are no different. While the pandemic may be more potent and unprecedented in many respects, it has the same effect on enterprises at large – compelling, change and adaptation. It has brought a new reality to the world – where mere survival and business continuity isn’t enough. There is a prescient need for innovation and resilience amidst disruption.
Navigating Beyond the VUCA World Challenge
Achieving success in this ever changing business climate necessitates a new approach; a strategy that allows leaders to take faster decisions in real-time, while balancing the dynamic variables. And at every turn, these decisions need to succeed in the face of a volatile, uncertain, complex, and ambiguous (VUCA) scenario. For enterprises, traversing any adversity requires a strategy that takes these four factors into consideration and delivers growth from new opportunities.
Facing a New Reality
Nearly every industry is facing major challenges due to the pandemic– and this indeed applies to any other adversity as well– and has no choice but to shift their focus toward:
- Scaling operations, demonstrating agility, and creating new revenue streams
- Making the right decisions, quickly - with limited information or with vast quantities of fragmented and unstructured data
- Sensing and responding rapidly and swiftly to changes in customer’s demand and purchasing models
- Exploring new opportunities and avenues for growth in an uncertain environment
To enable these changes, businesses need to reimagine themselves and become “adaptive enterprises”, across all dimensions– in technology, functional processes, leadership, and with their workforce. This is the only way to achieve complete flexibility and introduce innovative business models and solutions. But, for traditional enterprises and leadership, this could pose a challenge.
The right response from top leadership would not only help their organization survive, but even thrive in this changed reality. These responses are essentially directed to address current challenges with a futuristic outlook. According to Bill George of the Harvard Business School, these responses can be outlined as VUCA 2.0—vision, understanding, courage, and adaptability. Here’s how VUCA 2.0 can be helpful in navigating the VUCA world:
Vision
With chaos created due to several external and internal factors, it becomes difficult to see through the fog and make clear business decisions. A case in point was when Blockbuster turned down the opportunity to buy Netflix in 2000. It is a cautionary tale for all companies. Lack of a clear vision for the future by the video rental giant’s leadership inhibited the company to evolve alongside technology and changing consumer behaviour.
Blockbuster had reported a growth rate of 114 percent in 1988 and went public to wide acclaim in 1999. But it had to be delisted from the New York Stock Exchange in 2010. Netflix, on the other hand, pursued a clear vision as it rode the rising tide of high data speeds and lower bandwidth costs to pioneer the over-the-top media delivery business. It is now the world’s largest subscription service provider of online videos and Blockbuster is almost forgotten.
But let us not lose sight here – it is very easy, with hindsight, to point out a lack of vision or strategy, and why we laud Netflix’s success today, but we don’t know yet if they would suffer from the VUCA challenge in the future.
A clear lesson from the Netflix story is also how the company understood its strengths and potential blind spots when it was just a DVD mailing service provider at its inception. This well demonstrates that the best strategies are usually those that can benefit customers and stakeholders alike, instead of just serving the short term top line.
This is why leaders need to be open to listening and learning to develop a complete understanding of their customers and employees’ requirements.
This is where companies differentiate themselves.
Microsoft is a key success story. The company made persistent efforts to understand its stakeholders, and letting emerging trends direct its strategy to eventually become one of the top cloud providers in the world. But it wasn’t an easy journey.
The software giant was a pioneer in operating systems and enterprise partnerships but was at risk of obsolescence as new technologies like hybrid cloud were being spearheaded by competitors such as Google in the search engine market, and smartphones from Applei. They needed new strategies and a clear vision to compete. The uplifting leadership by Satya Nadella made it possible for Microsoft to confidently embrace a new future. Shutting down its mobile handset business and returning back to its roots of building tools and platforms became a winning play. Azure’s launch and a new collaborative management style stood out amongst intense competition as well. It allowed the company to be a major player in cloud platforms and rise to new heights as a cloud provider.
Courage
Holistically, the true strength of a company lies in leaders who stand up for what is right. Like Nadella at Microsoft, leaders need to have the courage to take difficult decisions and stay on course while riding through the storm. It is now more important than ever to step up to challenges and have the courage to question prevailing beliefs and practices.
Today’s times are not for the conservative, but for the risk takers who take feedback in their stride. The ongoing pandemic, similarly calls for organizations to change their operating models, adopt digital transformation, and embrace new business models as the way forward.
Adaptability
Embracing risk and uncertainty requires leaders to be flexible and adaptive to the rapidly changing business paradigms. Planning for months or years no longer works. In the current situation, companies have already discarded their 2019-2020 plans in the face of quarantines and lockdowns. It’s time to innovate quickly and seamlessly. The sole focus should be on final business outcomes, not on far flung goals and strategies.
In the course of the COVID-19 pandemic, 3M’s adaptabilityii is a lesson worth learning. Leveraging its emergency response teams, through fast communication and interconnected capabilities, the manufacturing organization ramped up the production of respirator masks almost overnight.
Its factories activated idle machinery to fulfil surge capacity demands, at short notice. Constant demand monitoring allowed the manufacturer to set up fast and localised supply chains for seamless procurement and product delivery. Their dexterity enabled them to plan a delivery target of over a billion masks by the end of 2020. The key takeaway from 3M’s case is that to be flexible and adapt to any situation involves an adaptive work culture and multiple contingency plans with a future-centric outlook.
Embracing the Adaptive Enterprise Mind-set
VUCA 2.0 lays the foundation of the new 21st -century Adaptive Enterprise, which will function with a strong vision, agile heart, and enduring courage to ensure the goal stays clear, even if the route may need to change. Led by adaptive leaders, the enterprise is flexible, responds to current challenges, but ensures everlasting success.
These five building blocks for the adaptive “Enterprise of the Future” - ready to embrace the VUCA world of today - are:
- Agile Culture – The key is to create a responsive environment with inter-departmental collaboration. Organizations can leverage rapid prototyping, sensing, and DevOps, to enhance team productivity and ensure continuous improvement of product/service quality.
- Agile Collaboration – A collaborative work culture allows optimized decision making during critical situations. This requires seamless collaboration and communication tools to enable people to come together and share their work in progress.
- Agile Infrastructure – A scalable and flexible strategy for workload management is imperative when organizations are faced with drastic shifts in demand. Leveraging hybrid cloud or other flexible cloud platforms will help manage work anytime and anywhere, per business needs.
- Agile Operations – The current crisis calls for enterprises to implement digital applications that get the right information, to the right people quickly. This necessitates proactive teams that think of value creation instead of having a mere ‘project mentality’.
- Agile Security – A major priority in the current business landscape; cybersecurity and disaster recovery management are significant for asset and information protection. To ensure security, organizations will need to consider safe-guarding all assets including people and locations.
Adaptive enterprises are the future of business resilience, innovation, and customer service for all industries. With a trusted partnership between HCLTech and Microsoft, we are helping organizations with customised digital transformation strategies as they face new challenges with confidence.
We are working closely with our client organizations, understanding their unique business models and accelerating innovation with our unique solutions, AI, ML, and automation capabilities, collaborative technologies, and seamless scalable digital transformation strategies- across the enterprise. Our three decades of partnership is enriched with joint investments, trusted and experienced transformation strategies, and technologies of the future.
Together, we are helping accelerate innovation and create modern, adaptive enterprises with a industry leading digital transformation strategies, ready to take on new challenging landscapes head on.
References
- Satya Nadella brought Microsoft back from the brink of irrelevance - https://www.latimes.com/business/technology/story/2019-12-21/satya-nadella-reinvigorated-microsoft
- How 3M Plans to Make More Than a Billion Masks By End of Year - https://www.bloomberg.com/news/features/2020-03-25/3m-doubled-production-of-n95-face-masks-to-fight-coronavirus
