Becoming more agile, more resilient

WHILE business activity is gradually resuming in Singapore, vigilance remains constant as the world works towards developing a vaccine. For business leaders, similar vigilance can help them remain competitive through this period and emerge stronger from the crisis.

They can draw inspiration from companies in the region and around the world that have changed the way they work and interact with customers, navigated the uncertainties of a crisis environment, and captured the opportunities that have emerged. These companies cover all industry sectors and come in all manner of sizes, but most have one thing in common; a lean, fast and agile organisational structure.

Agile methods are already established in the business world. McKinsey's research with Harvard Business School into the performance of more than 50 companies during this time across various sectors unsurprisingly showed that agile companies reacted faster and better than their non-agile peers to the challenge.

Interestingly, we observed that many companies are achieving similar performance gains as a result of the changes Covid-19 is forcing them to make to the way they interact with their customers, even though these changes were unplanned and implemented in reaction to the crisis.

It turns out that companies that thrived in this "survival minimum" mode knowingly or otherwise borrowed a number of tactics from the agile playbook, particularly the rapid adoption of new technologies and ways of working to accelerate business processes by dismantling the barriers, silos and hierarchical decision-making structures endemic to more traditional organisation structures.

For example, a leading bank in Asia managed to meet a sudden spike in demand for remote online transactions by establishing a small cross-functional team that focused exclusively on expanding capacity for these online customers. It delivered the extra capacity in a quarter of the time that could have been achieved through a traditional approach, and helped the bank maintain customer satisfaction at a time when customer retention has never been so important.

Commonly-held beliefs being challenged

The successful responses of many companies to Covid-19 has challenged many commonly-held beliefs on how to run a large organisation and strengthened the case for agile methods. For example, assumptions that most large organisations operate at close to full efficiency were quickly dispelled by the observation that businesses were able to deliver months' worth of work in weeks with a leaner workforce.

Another common belief that has been contested is that processes and technology changes are bottlenecks. Instead, a purpose-driven motivation to fulfil and respond to changing customer needs and behaviours has pushed companies to develop and launch entirely new products in timeframes that were once deemed unthinkable.

For example, a consumer goods company in Asia ceased its normal activities when demand for its products cratered and retooled its production machinery to make personal protective equipment to defend against Covid-19, selling its non-medical-grade masks online. This transformation took days, not weeks, months or years.

Meanwhile, a large grocery retailer launched a curbside pick-up and delivery business in two days - a far cry from their legacy plan of 18 months. Upon reflection, the group's CEO had a bold and challenging message: "We adopted new technology overnight, not the usual years it takes. How can we ever tell ourselves again that we can't be faster when we've proven that we can?"

Many other CEOs have also told us that there is no turning back. They have seen the art of the possible and want to lock it in. There is an imminent opportunity to transfer the lessons learned from "survival minimum" to a new "strategic optimum", rather than returning to the legacy organisation and ways of working.

Meeting short term needs will reset operations for speed and performance

The core question being asked is whether this will be a series of tactical adjustments, or a full rethink of the organisation structure and ways of working.

These tactical adjustments include the extent to which remote working should be adopted as Covid-19 has swept away the old perception that co-location is essential to employee productivity.

A hybrid remote model is likely to become part of the new normal, with staff being able to work at home or from the office according to the company's needs and their preferences. For example, a global telco has identified more than half of its white-collar staff as eligible for a hybrid remote model, up from 15 per cent before the crisis.

Other tactical adjustments may include formalising new paths of decision-making that proved effective during the crisis, such as increasing the involvement of top management in daily decisions. And it may include protecting high-performing structures that formed over the past few months, such as new cross-functional products and pricing teams that are fully dedicated to a sequence of single tasks and that have become skilled at completing them in rapid, iterative sprints.

Beyond incremental adjustments, the "answer" may also lie in a more fundamental reset of the company's operating model. For example, can the organisation structure be adapted permanently from functional hierarchies to a flat array of cross-functional teams? Should the company's strategy evolve from pursuing multiple, competing priorities to focusing on a few, sequenced objectives?

And should the people model change to one of more skills-based mobility and contribution rather than be stuck in functional specialisation and silos? There are two to three dozen choices within this fundamental reset that will define how much of the newfound speed can be retained.

The time to act is now

Companies in Singapore have a choice, but the time to act is now. They can try to outlast the crisis in their current shape or they can use the threat of being left behind as an opportunity to cut through organisational inertia and transform the way they work and interact with customers.

If they can find a way to operate with the clear purpose and pace demonstrated by the examples highlighted above, they will stand the best chance of staying afloat - through better meeting changing customer needs, enhanced employee satisfaction and improved productivity.

Above all, the changes they make today to how they work and interact with customers will position them to prosper in the new normal that will follow the pandemic, no matter what shape the new normal ultimately takes.