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DOWNLOAD. LISTEN. ENGAGE.

Ep 3 Advice from business’s best thought leaders made easy with host Jeremy Gray

18/7/2021

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Show 3 Season 6

Season 6 Show 3
Advice from business’s best thought leaders made easy to understand and practical to implement

IBGR.Network - PROFIT Radio. Everything a business owner needs to start, grow or exit a business. GROW WITH US. 

McKinsey & Company – Speed and Resilience: Five Priorities of the next five months. Mihir Mysore, Aditya Sanghvi, Navjot Singh and Bob Sternfels.

The Covid pandemic taught many businesses to move at remarkable speed as they reacted to events that disrupted their commercial operations. It showed that it was possible to quickly adapt ways of working to cope with unprecedented conditions.

No one can be sure what the post covid pandemic world will look like. Today England starts the experiment to see what happens when a well vaccinated population has most of the restrictions associated with covid lifted. We can only hope that experiment is a success, and the English economy rebounds.

What we can be sure of is that companies that react faster to the changes in the post covid world will fare better than companies that are slow to adapt. To prepare for the future the authors say businesses need to ask and answer five questions in the next five months:

Firstly, what demand shift should I expect in my marketplace and how do I get ready for it? Consider how your business changed because of covid and assess whether it will go back to how it used to be? Or will it be different? The covid pandemic has been long enough that people will have changed habits. Some out of necessity and some out of preference. Eating out has been severely restricted in many countries so there has been a switch to meal delivery. Will that continue or will people revert to their old ways? And to what extent?
McKinsey research on the outlook for consumer demand found that online grocery shopping, virtual healthcare will likely remain popular. In contrast the research suggested that air travel, live entertainment and education will quickly return to pre pandemic behaviors.   

Is there a pent-up demand in your marketplace that may cause a spike in demand? In many countries overseas leisure travel has been restricted for over one year, it can be anticipated that there will be a strong demand once these restrictions have been lifted. As surge or demand-based pricing has always been the norm in the travel industry, consumers can expect high prices and providers may be able to start recouping some of the losses from the last 15 or more months.

How should you adapt to new ways of working which enhance productivity and health?

Many organizations are self reporting that individual and team productivity being higher today than prior to the Pandemic. However, this is not universal, McKinsey’s research finds 50% of workers are showing increased productivity, while the other half report no change or lower productivity.

Those companies that are reporting increased productivity are those that changed their working practices beyond the change to remote working. This included holding multiple short meetings of 15 minutes or less, or resolving issues using text messages. Its long been known that meetings are not the most productive method to get things done. Look at the number of participants working on their smart phones during a meeting to understand the lack of engagement among many participants. Short meetings are a way around this problem.

I confess I am a bit skeptical about how well people work from home. Maybe that’s because I am not very good at. I wondered if more work was getting done but if the quality of the work was suffering. I decided to look at the number of patent applications as a proxy for quality of work. Maybe not the best measure but a patent does represent novel and innovative thinking. To my surprise I found the number of patent applications in the US and UK increased in the year following lockdowns over the year prior to the lockdown.

Maybe there is something to this after all. Take a look at your company. Was it more productive versus the prior year? Build on the habits that have been developed. Consider how to maintain the gains you have made while taking the advantages that are gained by face to face time.

Widely reported is the fatigue employees are feeling due to their inability to switch off from work when home based. Note that I place the responsibility on the employee. They are quite capable off powering down their computer, putting their phone on do not disturb if they choose to. If they do not it is because they perceive that their manager expects them to be available 24 hours a day. This is unacceptable and should not be tolerated. Some companies have implemented no e-mail hours or days. Others have gone so far to turn off their servers at certain hours. I do not recommend you go that those lengths but make it clear that employees are entitled to their down time.

I made it a habit, if I sent an email to one of my employees over the weekend, I would make it clear I did not expect them to respond before the start of the week. Despite this they usually would respond over the weekend – we are own worst enemies.

I will not get into the debate on whether companies should have the right to force employees to be vaccinated. I will only say that I and everyone of my family have been vaccinated.

A follow up issue you need to address; what to do with that empty office space on which you are paying rent? What is the future of work in your company? Most likely it will be a mix of working in the office and working from home. Employees have shown a preference for working from home, employers who offer some flexibility on location will be the employer of choice for many people.  Younger workers, who show a greater preference for flexible working, will have more power in the employer/employee negotiations especially in countries with a declining working population. Within the OECD this is Korea Japan Italy and Germany. In the extreme case, Japan the working population in 2050 will be 60% of the level seen in 2000.

Ideas for you to consider:

If the bulk of your company’s employees’ interactions are in small groups consider more smaller locations that a single large hub.

Making working from anywhere as easy as possible; whether at home, in the office, at a co-working space or other location.

Redesign offices to encourage social and collaborative interactions. Get rid of the dreaded cube, that encourages employees to hunker down and defend their turf.  

Consider using outside conference facilities for larger meetings rather than paying for an inhouse meeting room that sits idle most of the time. I have always found a change of venue helps foster creative thinking.

Over the next few weeks you are going to have to make decisions on your company’s position on office based, home based or hybrid working arrangements. Clear guidelines will be needed on what management expects of their employees. The level of discretion individual managers have regarding their teams working arrangement must be spelled out. This can be considered as an experiment where the rules can be changed until you find what works for you. Avoid frequent changes, everyone hates uncertainty including your employees, give each structure enough time to prove whether it is working or not.

How should you change the way you allocate capital to take advantage of opportunities that arise, or threats that appear on the horizon? McKinsey suggests a balanced approach across growth, margin and optionality. I assume by optionality they mean keeping some capital in reserve which you can invest as the situation dictates.  Margin relates to projects that improve profitability or cut costs.

Covid 19 has impacted much of the world’s population but some groups have been impacted more than others. What role should your company play in redressing this imbalance? ESG (Environmental, Social, Governance) is a much-used term which can mean different things to different people. In our communities what matters, is what does it mean to you and your employees?  Small initiatives can mean a lot – giving preference to local companies when bidding for contracts, ordering food from the restaurant around the corner, offering job opportunities to students whose education has been disrupted.

These types of actions do not need to cost a lot but can gain you much goodwill in your local town and with your employees.

Speed and agility were watch words prior to the pandemic, they are even more important today. Take the lead and, if you have not already done so, start planning how you need to adapt to a post pandemic world. Your employees and your shareholders will thank you.

Why Pivoting Your People is a Strategic Priority is from MIT Sloan by Curtis Odom and Charn McAllister

The last article focused on changes you made in your business due to Covid and the actions you need to consider as we emerge. This article from Sloan suggests you should think through how this has impacted your staff and how you prepare them for the skill sets they will need in the future. The authors define pivoting people as retraining employees so that they can fill the roles that are aligned with you company’s changing needs. Thinking about what is needed, and preparing your employees, prevents employees needing to adapt on the fly, or even worse, fail.

Retraining your employees makes sense. Recruitment of new staff is expensive and uncertain. Much better to train your existing staff and retain that institutional knowledge, much of which is lost if staff are replaced. There is only so much historical learning that can be transferred, even if there is a hand over period.

By retraining your employees, they will see that you are investing in them and this is likely to increase their commitment to your organization. This is a win win.

Before you start on your retraining program take the time to understand how your business has changed and the new direction you are going to take. There are many articles, podcasts and even this radio show talking about the post covid world. But no two companies are the same and the reaction to changes will be different in all cases. Its time to revisit your strategic plan, if you have one, or to create one if you do not have one already written. If you have not got a plan in place, I recommend you download my Podcasts from Season 4 on the topic of strategic planning. This does not need to be complicated; in summary a strategic plan is: Where is my company going?  The strategic part. How will I get there? The tactical part. The can I do what I am planning part.  It really is as simple as that. The level of detail is up to you. The number of directions you want to follow is up to you, providing you have the resources to be successful. Resource planning is the most neglected part of most business plans.

Back to the article which focuses on the people part of planning and provides a framework of ideas for you to consider.

Look at your organizational structure. Given the changes you have made and will make, does it need to adapt. Are there changes needed to improve efficiency? Do reporting lines still make sense? Are the spans of control manageable?

Communicating changes. Most folks do not like change, unless it is to go on vacation, changes can create tensions and misunderstandings. Make sure you take the time to communicate the changes and why they are being made. Make sure you answer your employees, often unspoken, question, how does this affect me?

Strengthen relationships by building a sense of community – we are all in this together. This will encourage two-way communication which is vital. You have communicated the changes needed and why they are needed, Now give your employees a voice to tell you of their concerns. Employees usually have a good understanding of the best way to get their job done, listen to what they say.

Be understanding. Learning new skills can be challenging. Doing things a different way can feel uncomfortable. Give your employees time to implement their new learnings. Be tolerant of errors and mistakes. Be conscious of perceived unfairness. Jane still works at home while I have to come into the office.

Maintain a positive attitude. Your team will take their cues from you. If you remain upbeat and optimistic, so will your team. We will win together. Also maintain your work life balance to avoid burnout. Consider some team event to show that it is not all work. This could be as simple as cakes on Friday. or an end of the day happy hour.

Questions you should be asking yourself as you plot the new strategic direction include: Do we have the right workforce in place? Do we have the right skills to get to where we need to go? If not, who can be retrained to provide what we need? Who will fulfill the role they used to do? Are there any roles that are no longer required? Assess the people, not the roles. If you are scaling back on operations but boosting marketing, who in operations has the aptitude and attitude to learn marketing skills?

As with organizational changes, discuss any proposed training and new roles with your employees. As much as possible ensure that they are delighted at the opportunity. If not, they may agree to the training while looking for other roles outside your company. Remember what people say is not always what they mean.

Change equals communication. If your company is small enough, talk with every employee about the change and how it will affect them. If you cannot do this work with your managers one to one to be sure the right message is communicated. Consider skip level meetings to be sure that the message is getting through. Your employees are your most important asset retrain and retain wherever possible.

The final article for today comes for the Harvard Business Review and it is written by two partners from Bain. David Michaels and Kevin Murphy. 

They ask How good is your company at change? How do you measure your “Change Power” and how do you improve your ability to change? Change is a constant in business, while the focus is on Covid and how it has increased the speed of change, there is nothing new in the need for businesses to adapt in response to changing conditions. Your ability to manage change now and in the future is one of the keys to your success.

It may seem impracticable to measure something as intangible as the power to change but the authors believe they have found traits or factors that can identify the ability of your company to change.  They have found that most company’s fit into one of four types. Their suggestion is that you identify which category your company is in and then they have ideas of how to develop your capability to respond and adapt.

The four categories are:
  • In search of focus
  • Stuck and Skeptical
  • Aligned but constrained.
  • Struggling to keep up

I really liked these descriptions as I have worked with all four over the years, each has its challenges, and each has opportunities to improve.
 Which of these categories most closely fits your company?

Starting with In Search of Focus. Your company’s strength is its energy, you accomplish much and are constantly innovating. But your team is constantly chasing the ball and the bigger picture gets missed. This lack of focus can sometimes ever lead to inaction. I recall a division I was working with had so many opportunities that they were like a kid in a candy store, so much to choose from, so hard to make a decision. Having a view to the bigger picture would help bring focus.

Stuck and Skeptical. Your company has great ideas and a track record of success but somehow projects get stuck as you roll them out within your organization. Leaders tend to underestimate what the have taken on. This could be a symptom of the lack of resource planning that is a common failure of many projects. What I call the unfunded mandate, the instruction to carry out an action without providing your employees with the resources they need to achieve the goal.

Aligned but constrained. Your teams work well together and have common objectives but the lack of resources slows down progress and this after time impacts morale.

Finally Struggling to keep up. Your team is dedicated, committed and focused on winning. But the constantly changing environment is sapping your teams strengths. The authors compare this situation to a team in the Tour de France, focused on wining but different stages and the tactics of their competitors make this a grueling race.

Do you recognize any of these characteristics in your organization? If you are undecided the authors have some guiding questions that could help you identify which category is most applicable to your company.

Are your teams uncertain about where the business is headed? Is there an ongoing debate about direction? Do your efforts feel disjointed? If the answers are yes, then you are probably in search of focus.

Do your get stuck where they originate? Do people across the organization feel disconnected? Do results take longer than they should? This would indicate you are stuck and skeptical.

Do you feel like you are moving through mud? Do you worry you do not have the right talent to deliver? Do you struggle to get your arms around everything that is going on? If this is you then Aligned but Constrained, probably identifies your issues.

Are your teams weary? Do you seem to be losing the battle for energy? Are you slow to make decisions and adapt your approach as conditions change? If yes, you are in the Struggling to Keep Up category.

What should you do to improve the situation?

If you are in search of focus, make sure you communicate the big picture to your employees, connect their work to the purpose and the longer term strategy of the company. Tell and retell how you will succeed.

Fixing being Stuck and Skeptical is more challenging. You need to re-ignite the enthusiasm of your team. You must convince they can succeed. The authors advise one way to do this is to get some wins on the board. I would recommend breaking projects down into smaller pieces and celebrating each milestone as it is achieved.

Aligned but constrained requires that you identify the capacity bottlenecks in your operation. Reconsider your priorities and add resources where necessary. Talent development plays a role and as we discussed early in the show consider pivoting your employees to where they are needed most.

Struggling to keep up? Re-evaluate your strategic plans, are they still appropriate? Are they now unrealistic? Consider how you can identify changing circumstances early. I would think about improving the ability for front line staff to report what they are seeing in the marketplace.

If you identify yourself with one of the four categories consider downloading the article. For copyright reasons I cannot send you a copy or provide a copy in my show notes. But HBR are pretty good at permitting you to read a number of articles for free each month. I’ll put the link to this and the other articles in my show notes. The McKinsey article is in the public domain so you should have no problem getting access.   

On next week’s show, among other topics, we will look at:
McKinsey’s Building e-commerce ecosystems on Amazon: A conversation with Rainforest’s JJ Chai.

And from HBR How susceptible are you to the sunk cost fallacy?

Links to this weeks articles:
https://hbr.org/2021/07/how-good-is-your-company-at-change
https://www.mckinsey.com/business-functions/organization/our-insights/speed-and-resilience-five-priorities-for-the-next-five-months

https://sloanreview.mit.edu/article/why-pivoting-people-is-a-strategic-priority/

You can contact me via the following links:
mailto:jeremy@business-in-asia.org

Or schedule time via Calendly:

https://calendly.com/3-continents-consulting

My websites include:

https://business-in-asia.org/
https://thedentistscfo.com/

​My LinkedIn URL

https://www.linkedin.com/in/jeremy-gray1



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