Well there was some lively voting in this month's vote and a good showing for Nick Hammond's post on mindfulness in the time of the virus but in the end it was Patricia McDonald's wonderful letter to her daughter that won through. Well done to Pats - she joins the hall of fame. My thanks to everyone that took part.
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Dynamic resource allocation in a crisis
There's already been a lot of speculation about what's likely to change and not change in the long-term given the current enormous challenges faced by so many businesses, but the reality is that no-one really knows. The one thing that businesses can do right now apart from fire-fight is to stay adaptive, ready to change and to learn fast (sounds familiar). The one thing that they can't afford to do is nothing.
In between there will be a whole bunch of businesses attempting to operate in a highly fluid environment and potentially solve complex and adaptive problems with overly linear, fixed or inflexible approaches. Yet in amongst this awful situation there is an opportunity to challenge the norms and assumptions that have gone unchallenged for years. Over on the Coteam blog I wrote a piece about how organisations can become fragile by trying to solve problems using the same thinking that created them (to misquote Einstein). Resilience is about more than just resisting known stresses. We might think of it as being able to absorb or react to disturbances in a way that enables you to go back to an original state. But an antifragile system (to use Nassim Nicholas Taleb's concept) is one that improves as a result of stresses and failures.
Many organisations right now are being forced to reallocate resources (budgets, talent, leadership focus) at speed but it's simply not in most company's DNA to be agile with resourcing in this way. McKinsey research (looking at 1500 US companies between 1990 and 2010) has shown that 83% of senior executives believe that strategically shifting resources is a top management lever for growth, more even than M & A or operational excellence. Yet the average reallocation of capital year to year is a mere 8%, and a third of businesses reallocate just 1% of their capital annually. That same research found that 90% of CAPEX allocation is highly correlated with last years CAPEX allocation. The companies that do actively reallocate resources deliver, on average, a 10% return to shareholders, versus 6 percent for a 'sluggish' reallocator.
Resource reallocation should be a continuous process and perhaps one of the longer-term positive affects of the massive jolt which many large businesses are feeling now will be greater fluidity in resourcing and a recognition of the need for structures and culture that support this at scale and for the long-term. In my second book Agile Transformation I wrote an in depth case study on Chinese company Haier, one of the biggest appliance manufacturers in the world. They are a fascinating business not least because they've taken a unique approach to scaled agile org design, successfully restructuring the business into 4000 'micro-enterprises', most comprising 10-15 employees. Each of these micro-enterprises (MEs) takes responsibility for specific services, from manufacturing particular component parts to design and HR, and each ME transacts with other MEs via internal platforms.
This highly devolved structure allows for a much larger degree of autonomy but also fluidity in resourcing which means greater adaptability in the face of disruption. It was notable for example, that whilst most Chinese manufacturers were just beginning to restart manufacturing at the end of February the Haier Group factories were already operating at full capacity. Agile structures combined with an agile supply chain meant that Haier fulfilled 99.8% of its orders in February which is nothing less than remarkable.
The lesson here is not just about dealing with volatility and disruption but about recovery. About becoming more antifragile. God only knows what will happen over the next six months or longer but whilst so many businesses are battling for survival right now, those larger ones that are able to bring new levels of dynamism to their resourcing will surely be those that recover fastest.
Photo by Stephane YAICH on Unsplash
Post of the Month - April 2020 - Nominations
Well, after a one month hiatus I've decided to bring Post of the Month back, not least because there was so much good writing around despite (because of?) everything that is going on. So I'm asking for you to submit nominations again for posts that you've read over the past month that you thought were pretty good. You can do that by sending me the link direct or leaving it in the comments below. As soon as I have enough nominations I'll stick them up for a vote but as usual I've listed a few starters below - you'll note that one of these is actually a series of three blog posts which is slightly unusual but hey:
A letter to my daughter by Patricia McDonald
Covid-19, what do we do now (and next)? by Kevin Chesters
Lockdown and the challenges of making work work (part one - Only Connect, part two - Collabs and Creativity Under Covid, and part three - Deeds and Words: Leadership Under Covid) by James Caig
Please do add to these nominations with your own.
Only Dead Fish is a blog and digital consultancy run by Neil Perkin. Neil is the author of two best-selling books on the intersection of business transformation and organisational agility: Building the Agile Business and Agile Transformation (both through Kogan Page), and the curator of Google Firestarters
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