I have been talking a lot over the past few weeks about COVID-19 and it’s impact on a world going through various levels of digital transformation. As I hear the stories and discuss the hidden meanings, a very interesting picture has emerged.
Historically, when we think about Disaster Recovery and Business Continuity, we do so with the mindset of an invincible human. We plan for disasters that strike at our infrastructure and technology. The system is down, the phones don’t work, I’m cut off from the Internet. My transportation / distribution channel is challenged, and I can’t get into my flooded manufacturing plant. Basically – all of my employees are sitting around in the office, waiting for something to do.
But our current situation is the exact opposite; the systems are up, the lines are active, the roads are clear, the presses are ready to go. The problem is – no people. No one is coming to the office to punch the buttons, make and ship goods, pay the bills and collect the cash.
Another big difference – this disaster is impacting everyone. Natural disasters take out locations – a city block razed by a tornado, county-wide flooding – so my business continuity plans revolve around fail-over sites for my server farm, temp locations for office workers, and alternate sites for distribution. But today, there is nowhere to go – shelter-at-home restrictions are national, even global in scope.
Is it any wonder that many plans were not up to the challenge? And where do we go from here?
Resilience – and Hindsight
As I review this last batch of stories, there is a clear trend in the conversation – and in the lessons being learned. We are all experiencing a decent amount of 20/20 hindsight, as teams wish for digital capabilities that didn’t make the priority list in days past. It’s important to note that our decisions of the past were not wrong. It’s just that in the future, we might weigh the potential value of new digital investments a little differently.
- A thoughtful conversation about a firm in Northern Europe, which has historically been amazingly innovative and aggressive in implementing and iterating Lean Manufacturing principles, dwelled on their successes. However, for some reason they have never been interested in going to a paperless shop floor. Over the years, teams have made project proposals, but Operations was never interested in that type of change. Fast forward to the days of COVID-19, and this company has had to add headcount in the back office to get orders out the door (since work time and proximity have been hampered. This company manufactures a complex product, and work orders typically stay open on the floor across shifts. Shop order packets are filled with critical information – but all of it is handwritten, as the organization never saw the value of going digital.
DBC Lessons Learned – Lean Manufacturing mavens are correct in focusing on process before systems – when you automate a mess, you get an automated mess. But to get next-level productivity, there will come a time when digital tools, applied correctly, can take out muda (waste) and drive quality.
- Another story of delayed change from the healthcare sector. This time, it was a firm that digitizes elements of the drug testing processes used to run clinical trials. This was a successful early-stage business that spent a good part of last year evaluating a re-platform and migration to cloud architecture, as they were projecting large and rapid growth in 2020. The size of the investment, along with the large change management impact, gave them pause, and progress had stalled completely. Suddenly the coronavirus hits, with a number of their customers looking to test new and novel treatments in a short amount of time. And now the company is scrambling – they had a chance to get out in front of it, and now they are working overtime to make a difficult system work for a booming business.
DBC Lessons Learned – An interesting problem to have, as business is booming, making their forecast team look brilliant. But Operations is definitely wishing they had started the re-architecture earlier; their hand is being forced, and now they are changing amidst the growth. Change is never easy – but if you can initiate change during times of relative calm, the impact can be less intrusive. It’s no use trying to “time the market”, as it were – just pull the band-aid off and get to the benefits faster.
- A manufacturing firm relayed the story of their 20/20 hindsight – all around the difficult task of making spending cuts. They delayed an ambitious data lake / global repository project, and now are wishing they had not. The time line from “something is happening in China” to “Shelter-In-Place” came so fast, it was impossible to get the desired level of detail on inventory levels in the entire supply chain. When the time came to make quick decisions, they did not have the deep insights to make surgical cuts. Armed with traditional reporting / visibility tools and data, they were only able to make bigger, broader hacks, and deal with the unforeseen impacts.
DBC Lessons Learned – When the impact of decisions increases, the same level of data that you had in the past is no longer good enough. In many areas of your business, the questions are coming faster, and the blades have to be sharper.
But there is good news coming from the network – people making the right bets, decisive digital moves that turn out to be the correct call.
- A professional services firm saw something coming. Early this year, they saw work-from-home restrictions being implemented in the US, so they called their development team in India to start prepping for the remote coding scenario. The tech team had never worked that way before – they didn’t have the secure communications infrastructure in place. More significantly, they did not have a working style that would accommodate such a move. And the team in India pushed back on the directive: this is not happening in India, it’s not going to happen! But the global team made the change – and good timing, too. Three days after the internal directive, the prime minister shut India down, leaving most businesses scrambling to implement a Digital Business Continuity response from scratch.
DBC Lessons Learned – It’s much easier to deal with new ways of working, and different ways of thinking, when there is less stress. Companies that are thinking about Digital Operations and Collaboration should experiment and implement flexible, alternative, digital methods when the pressure is light – it lessens the level of angst dealing with this new way to work.
Digital Impact: Changing Competition in the Coronavirus Era
The COVID-19 pandemic has truly been a major disruption for all businesses. Over the past 30 years or so, plenty of markets have had to deal with disruption – magazines, newspapers, and record companies vs. the Internet in the 90’s, or consumer retail vs. Amazon in the 2010’s. But those were niche industries and impacts, compared to the global prevalence of the current troubles. Every business in the world has been impacted – and it is not too difficult to see how this can happen again
It all gets back to the transformation of expectations, and reliance on a resilient status quo. Relying on the same old processes – sales reps on the street, managers on the shop floor, what do you know, what are you seeing, what does experience tell you – all are becoming failure points rather quickly. We have entered a world where none of that matters at the same level, in the same way, as it has historically. No, the digital world will never replace the value and effectiveness of the face to face meeting, the plant floor tour, the stand-up meeting at the white board. But the impact and value of Digital Thinking can no longer be deferred and ignored. We are now in a world where tacit expertise is not enough, and even becomes a liability.
Some companies recognize this – and are moving to do something about it
Other companies recognize this – and are waiting it out, trusting that things will go back to normal.
But consider this. We are going through a winnowing, where the least competitive and capable companies will cease to exist. Yes, this will throw some market share up for grabs, and organic growth will happen. But this event is culling the market, and the level of competition will be that much greater.
Going forward, the winners in your space will have clear advantages due to the digital capabilities that helped them get through the events of 2020 and beyond. It’s time to start applying these lessons learned now!
A Call to Action
This is the last in a series of articles, covering a wide range of real-time lessons we are still living through. Check out the rest of the series, and add your comments as well.
And if you are seeing challenges and opportunities in your business, and would like to better understand digital – check out my book (Don’t Think So Much), and connect with us here at Maker Turtle!
# 16 April, 2020