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Disruption And Beyond

Updated: Sep 21, 2021

What is disruption?

During its lifetime, every organisation, every enterprise is likely to encounter disruption of business, in some form or the other. The disruption could be in isolation for the said entity alone, or as a part of a sweeping global change. Disruption occurs when the orderly processes of social, financial, political transactions encounter a setback or a step change. It is like a smoothly flowing river that suddenly encounters a barrier. The passage of the river comes to a halt, but a river with a strong flow always finds a way. It finds a new path. Similarly, the business flow of a strong enterprise finds ways to move on.


It is possible that initially there may appear to be less order and focus in the way the business flow is diverted. A chaotic situation may be encountered. There may be changes in the fixed cost elements and variable cost elements of the product price, but the parameters, the indices by which the performance of the organisation is ascertained would be the same. These would not alter.


The change in working of the organisation and the ensuing struggle to meet the performance indices may be painful. Such a situation is not new. The world has faced disruptions, small or large, in the form of wars, epidemics, disasters in one way or the other. Strong and healthy organisations have always found a way to establish a new order. But the path towards it may be lengthy, violent and one which warrants many sacrifices. Some enterprises like Kodak or Metal Box have faced total wipeout while some organisations like famous Tobacco companies have countered the problematic situation successfully through divergence. We need to learn from the lessons that history has taught to the world, so as to find a path of comfortable transition.


Today we are in the second year of the global pandemic situation, a condition such as which was never experienced globally before. The situation has called for changes in the way the organisations' function. Change in consumer habits and needs, change in raw material sourcing and related logistics, “work from home” situation necessitated due to commuting and assembly restrictions, changes in taxes, levies and tariff structures. These are some of the changes that have occurred but the standard performance parameters that need to be achieved after factoring in the effects of all these changes remain unaltered. While we inch forward through these difficult times, the questions in the minds of everyone are, “what next?” and “How”? Can an orderly methodology be evolved?


Recognise the disruption

Acknowledge that the said global disruption is in reality a change in the world order. In such cases, it may affect the needs, habits, spending capacities of individuals and organisations and may raise various barriers. Identify the barriers with clarity and with root cause analysis.


Effects of disruption

The disruption may have automatically made changes in the way the organisation operates. Before making any decisions it is essential to ascertain whether these changes are transitory or permanent and if they are transitory, then what is the permanent way of working going to be, when will it be reached!


Major effects of disruption

  1. During the disruption, the organisation may have adopted functional tools such as cloud computing, audiovisual conferencing, or Work From Home methodology for certain departments. These changes have financial repercussions finally on the product pricing. They may have destabilised certain old institutions, which may require retiring or rehabilitations.

  2. Certain barriers coming up due to the disruption may have changed the product mix of the organisation so as to sustain positive financial results. It may be difficult to predict whether such changes of product mix, operational methodology are permanent requirements or they are just transitory as there is tremendous volatility around.


Whatever may be transitory or permanent changes, it is most important that

  1. in the long run, the enterprise must sustain in the business,

  2. there should be sustained qualitative improvement in every department,

  3. the operation of the enterprise should be competitive.

  4. All stakeholders should be satisfied.


In order to achieve this, during all the transitory, turbulent and steady-state functional stages it is important to continuously monitor,

  1. the vital indices of Production/operation/shutdowns and interruptions,

  2. All the Financial indices,

  3. Indices representing Employee and operational safety, and

  4. Indices of employee engagement.


In the above listing, Employee engagement is listed last but in reality, it is the most important factor and controls the first three.


Importance of Employee Engagement

A change in product mix, changes in dominant skill sets within the organisation, change in working environments all affect the employees. Some organisations are fast to adapt and some are slow. The innovativeness and creativity of employees are challenged and there is always a question, to what extent the decision making part of any organisational change should be allocated to the grass root workers if their creativity and innovativeness are to be optimised.


Needless to say, all organisational changes must focus on business sustenance and long term progress. The focus needs to be very sharp and all the relevant parameters need to be clearly recognised. This is a specialised entrepreneurial task and hence the role of grass-root employees in strategy formation is limited. Then what is the best place for employee creativeness?


A place for creativeness, innovativeness

To maintain its run of success, an organisation needs to have a keen ear glued all the time to the external world and external processes to get a feel of transitions out there. But the data obtained from external sources is often too huge and mixed with garbage. This needs to be filtered out for distortion-free projection. Then it is to be fitted to the organisation’s broader aims, abilities and capabilities. Final strategies need to be built on the basis of the selected goal set. Next comes strategic planning and then implementation.


It is somewhere between making strategy and putting strategic planning in place that the creativeness and innovativeness of employees find their place. Strategy leads you to the set of indices applicable for a successful enterprise and it is here that innovativeness and creativeness of employees need to be harnessed so as to optimise on the indices respectively.


The timing and methodology for harnessing the creativity of employees

Employees need clarity about their work. A journey into the unknown scares them. Hence clarity of purpose precedes strategic planning. Strategy decides the goals. Strategic planning defines the goals and at the same time traverses the difficult and highly specialised job of converting goals into tasks. This is a twilight zone. On one side there are owners, the top management and persons with broad 360 degrees of perception of business; on the other side, there is a highly specialised, skilled and often silo-based workforce. These are two skew planes and no single person can effectively make a bridge joining these two skew planes. Here is where a cross-functional team becomes an effective tool.


The CFT (Cross-functional team)

Purpose:

The aim of the high level cross-functional managerial team is to translate the goals into tasks and to hand them over to the respective department handling the tasks. This calls for the Management, employees, support system and infrastructure, all to get aligned and bound together by appropriate leadership and quick lines of communication upstream and downstream.


As the purpose of the team is to build the competitiveness of the organisation, it should be careful to ensure that the creativity and innovativeness are directed towards optimisation of performance indices and nowhere else. For this, it is essential that the employees are imparted knowledge across the silos within which they work. Employee education in the horizontal plane is equally important as education in their own fields. Therefore, it is essential to conduct suitable workshops wherein the short term and long term goals are well defined, the tasks are tailored out and a cooperative work process at the grass-root level is established.


A final note

An external disruptive change needs to be countered with matching structural change, functional change, attitudinal change as required. The disruptions of such a level ask for abundant energy and flexibility which can come from the young and agile rather than the old and stiff. The business process reorganising team needs to have the correct mix of young and old so that the young can understand the needs of the new order and the wisdom of the old protects from the over-sensitive reactions.

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