The Power of the Pivot: Organizational Agility is Key to Survival – May 2020

PGC, a Minneapolis-based 25-year old OEM that produces gaskets, sealings, protection, and stabilizing solutions found itself in a challenging situation.  As COVID-19 started to impact the market for its products, its CEO made decision to begin manufacturing parts for face shields. “[We needed] to keep an eye on our legacy business, while listening [and responding] to emerging customer and market needs,” says CEO and co-owner Susan Cary-Hanson.  The result?  Their business has seen growth to a point of backlog.

Standard Iron & Wire Works, a contract manufacturer of architectural metal services (welding, punching, tube bending, forming, etc.) based in Monticello, found itself with excess capacity as a result of the slowing economy.  Their response was to invest the extra resources in process improvement initiatives. “We needed to refocus on the basics,” says Jim Nelson, director of continuous improvement and quality.  They trained staff, sorted and cleaned production areas, reduced unnecessary inventory. As a result, they expect to have more efficient production lines, less waste, and more optimized resources when demand begins to increase.

Community CPA, a 25-person accounting firm based in Bloomington, changed their business model in response to COVID-19.  Given their core competencies in accounting and finance, Community CPA became a lifeline to their clients – typically small businesses – who are also navigating through historic challenges.  But their previous method of in-person visits obviously needed to shift, so they now engage with their customers by video, phone, online educational webinars, and in other ways.  “We hope to be our clients’ safety net,” says Ying Sa, CEO.  “We had to shift how we engage with our clients so that we’re ready to serve them [during their most difficult times].”

What do these three case studies have in common?  They all successfully shifted their businesses in rapid response to the COVID-19 crisis – they pivoted.  [All three were featured in a PEN webinar – in partnership with the St. Paul Area Chamber of Commerce – a few weeks ago, profiling case studies on how to sustain today and succeed tomorrow. For a copy of the recording, click here.]

We’ve all heard the phrase “new normal” (which, quite honestly, I don’t like because I think we’re in a transition period to whatever the next new normal might be – this current state is not normal and certainly not sustainable!).  But I think most would agree that today’s environment is requiring changes to nearly every aspect of our organizations – from our products and services to our processes and overall business models.  Think of the significant changes we’ve already seen:

• Restaurants and retailers had to shift to online, takeout, or curbside service only (and now restaurants are trying to shift again into socially-distanced outdoor service only);
• Educational institutions (and most other non-customer facing businesses and organizations) have had to shift to work-at-home, online, or some other virtual model;
• Manufacturers, healthcare facilities, and any other organization that has to maintain a physical operation, has had to change how work gets done – maintaining social distance between workers, requiring PPE or some sort of protection, reducing capacity or somehow decreasing contact and exposure.

And I’m sure we could list many other examples of recent and rapid shifts.  One of the core values in the Baldrige Excellence Framework is Organizational Learning and Agility.  From the 2019-20 Baldrige book:

“Success in today’s ever-changing, competitive environment demands continuous organizational learning and agility.  Agility requires capacity for rapid change and for flexibility in operations.  Organizations face ever-shorter cycles for introducing new or improved services, as well as for faster and more flexible responses to customers, and nonprofits and governmental organizations are increasingly being asked to respond rapidly to new or emerging issues.

“Disruptive events [like we’re experiencing now with COVID-19] are occurring more frequently, triggered by innovative technologies or service introductions, economic upheaval or stress, major weather events, or social or societal demands.  Organizations must be capable of managing risk and making transformational changes on an ever-shorter cycle time.  Major improvements in response times often require new work systems, the simplification of work processes, agile supplier and partner networks, or the ability for rapid changeover from one process or one location to another.  A cross-trained and empowered workforce and effective management of up-to-date organizational knowledge are vital assets in such a demanding environment.”

Though that description was written well before COVID-19, it seems like it could have been written because of COVID-19.  My overall conclusion?  Successful organizations need the capacity and capability to make rapid change to nearly every key aspect of its system in order to learn, improve, and – today at least – just survive.  Those that do not have the ability to shift into new products, services, processes, or models put themselves at great risk.

So how can your organization (or your department or your team) become more agile during these challenging times?  How can you pivot or shift?  Here are some thoughts:

• Shift your methods of communication.  As Ying Sa said on our webinar: if you can’t meet in person, meet by video.  If you can’t meet by video, meet by phone.  If you can’t meet by phone, then and only then, send an email or text.  Staying close to your stakeholders – both customers and employees – and maintaining strong relationships are critical, especially during a crisis.  Invest a little extra time in shifting how (and how often) you communicate.
• Shift how you implement strategy and action plans.  Those 3-5 year plans may still be important in maintaining a long-term vision, but today organizations must focus on much shorter timelines for implementation – 90 days, 30 days, even 7-day action plans. When circumstances change rapidly, organizations need to recognize and respond by shifting action plans more rapidly.
• Shift your approaches for stimulating innovation. Some of today’s challenges need bold solutions. While continuous improvement is always important, organizations need to create more breakthrough change during crisis (moving to an all-virtual workforce, or curbside service, or socially distanced manufacturing lines require significant, not incremental, changes). So consider ways to “think outside the box.”  [PEN is hosting a three-part online workshop series, facilitated by Israeli-based Systematic Inventive Thinking on how to make innovation more systematic: July 14, 21, and 28.  Information is here.]
• Shift resources to your true core competencies, while outsourcing (or eliminating) lower value-added activities.  Consider what differentiates your organization from others, and focus on your true strengths.  Those non-essential parts of your work systems, then, can be outsourced to suppliers and other partners.
• Shift your sales and customer relationship processes.  Connect with your key customers more frequently and at a deeper level.  Listen to and explore how their needs are changing.  During times of crisis, focus is absolutely key.  Customers oftentimes will give you hints on what is truly important to them.  Pay attention, and try to remove or reduce your investment in activities that aren’t important.
• Shift your customer mix, if you can.  Those organizations that rely on a single revenue stream or a single type of customer are more at risk.  If you can, explore other products/services – or even other prospective customers or market segments – to diversify your revenue.  Stay close to your core competencies and mission, but consider diversification to help manage risks.
• Shift your use of technology.  I wish I purchased Zoom stock back in, say, February.  I’ve been using that video platform for three or four years, but who would have thought that online videoconferencing would be the way to maintain relationships for any organization in any industry?!  Reconsider how technology enables your work systems – how you communicate, how you build relationships, how you share information and knowledge, how you get work done. Enhance your website; implement a CRM; automate parts of your key processes.
• Shift how you build capability with your workforce.  Although it may be the easiest time to trim training and professional development budgets, it may be the worst time to do so.  Invest in developing new skills, new capabilities in your team.  Cross-train when appropriate.  Preparing your workforce now for the changes they’re likely to see in the coming months or years will pay large dividends.
• Shift your work environment, considering new requirements for workplace health, safety, and wellness.  Redesign workspace to ensure social distancing; consider protective equipment for workers and/or customers; reduce human-to-human contact when possible.  In the short-term as well as the longer-term, workplaces will need to shift to be safer, more accessible, more inclusive.  We may still be in reactive mode now, but some of these shifts in work environment will be permanent.
• Shift how you engage with your team.  High performing cultures are characterized by open communication, high performance expectations, and an engaged workforce – which are all more difficult to achieve during these challenging times, especially considering the levels of stress and anxiety everyone is feeling.  Be sensitive to your employees’ needs; continue to (or start) assessing their satisfaction and engagement levels; truly empower them to solve problems, improve processes, and engage directly and fully with your customers.  Command and control cultures often don’t succeed because they choke communication and slow decision making ability. Trust your people to contribute their utmost to the success of the organization; they usually will.
• Shift your focus to improving processes.  Take advantage of what might be “down time” to invest in process improvement to reduce waste, improve productivity, reduce handoffs, and streamline operations. These efforts will help you emerge a more efficient, more productive operation on the other side of this crisis.
• Shift how you work with your supply network.  Make sure your suppliers, partners, and other collaborators are aligned with your mission, your customers’ needs, and your organization’s strategic direction.  Ensure that your supply network also is agile in responding to changes in customer, market, and organizational requirements.  Communicate your performance expectations, measure and evaluate suppliers’ performance, providing feedback to help them improve.  This crisis has exposed all sorts of challenges in a traditional supply chain; take advantage of the opportunity to improve the end-to-end flow of how work gets done in your organization.
• Shift your cash management strategies.  Work with suppliers to lengthen payment terms, when possible.  Seek alternate funding and capital sources (loans, grants, equity) if you can. Protecting cash is always a smart strategy for organizations, but during a crisis it becomes critical.
• Shift how you view business continuity.  In short, if you didn’t have one already, write your disaster recovery plan now as you’re executing it!  This may be the worst crisis we all face in our lifetime, but it’s not the only one (or likely the last).  Make sure that you have a plan that considers prevention, continuity of operations, and systematic recovery for all types of disasters or emergencies – weather-related, loss of utilities, security and cybersecurity issues, or local/national emergencies that, yes, include pandemics.  Acceptable levels of risk will vary depending on the nature of your business, your supply network’s capability, and your stakeholder needs.  But documenting what you’re learning now in preparation for the next crisis will put you way ahead of the curve.

Survival today may as much related to your organization’s agility than anything else.  Leaders need to do their best to quickly take in as much information as possible during ever-shifting circumstances, make the best fact-based decisions they can, and then quickly implement changes (but then measure, refine, and continue to shift as variables keep changing).  By focusing on those 14 ideas above, you will put your organization in a better position to respond to whatever’s next in this crisis.  Create scenarios; be flexible; be resilient and comfortable with constant change – because our world will be filled with increasing levels of uncertainty in the coming months and possibly years.

And I’ll leave you with this: focus on the little things, because little things have a way of adding up to bigger things.  You can’t shift all 14 items above at the same time. But pick the most important items, make changes, observe the impact, and then move onto the next shift.  When the world is changing rapidly, most of the time the worst thing to do is nothing.

If you want a quick, easy (and free) way to find what you may need to shift first, take PEN’s First Step organizational assessment.  It’s 19 questions and is based on the most basic questions of the Baldrige Framework.  It may help you pick where you need to start.

What other insights/tips do you have regarding organizational agility?  Participate in a discussion on this topic: visit our LinkedIn group to post a comment.  And follow me on Twitter @LassiterBrian!

Stay healthy and never stop improving!

Brian S. Lassiter†

President, Performance Excellence Network

www.performanceexcellencenetwork.org

Catalyst for Success Since 1987!

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