When faced with crisis, many organizations tend to enter into a hyper focus mode, intent on survival. As natural as this reaction is, it may lead to short term decisions that eventually slow down your recovery after the crisis and pose a long-term threat.
In disruptive times all companies will suffer, the winners are the ones that recover fastest after the crisis. Your ability to absorb the shock and come out of it ahead of the competition will secure your place in the great companies of tomorrow.
As anyone who has gone through a personal crisis knows, when you are able to fall back on your inner power you will come out of the crisis stronger and healthier. However, before reaching that point, you will also have gone through a lot of heavy lifting!
In this article we explore those KAIZEN™ principles, how they help you through these times and what you could be doing if you’re not already living them to create traction.
At Kaizen Institute we help organizations build resilience to change and disruption and to mobilize responsiveness at all levels. To strengthen their inner power by comprehensively applying KAIZEN™ principles and living the KAIZEN™ way.
Five Golden rules in disruptive times – unleashing your inner power
#1 Respect the signals evaluate them for what they really are
Don’t dismiss signals out of hand. A lot, really a lot of people dismissed COVID-19 measures as over the top, rabble-rousing, hysteria. Went into defensive mode and were late to act.
The KAIZEN™ Way is to be aware of social desensitizing, to have clear procedures on how to act in case of deviations from the norm. To trigger the Andon in every and any of the six M situations (Ishikawa), including Mother Nature. Do not overreact, but seek to understand, assess and take appropriate action.
#2 Don’t crash the company
You will suffer, but you must keep your boat afloat. By knowing where your short-term continuity risks are and mitigating them. Ideally, you are continuously monitoring your balance sheet position and operating cost. You know the control drivers; you have crisis action plans in place that allow you to move fast. You will have anticipated temporary policies for dire situations, e.g. imposing mandatory vacation periods or re-purposing resources to urgent areas.
Total transparency and your PDCA problem solve capabilities are critical here. Making sure you keep an open mind, diverging all possible scenario’s and using data to converge to the determining economic drivers. So you apply the success assured countermeasures.
#3 Increase responsiveness
Everyone is in turmoil, not just your company. This means a lot of changes in the outside world, with your customers, your suppliers, society. Changes that may pose uncovered risks and open unforeseen opportunities. Changes will be typically taking place at a local level. You need to rely on your local front lines capabilities to read the signs, interpret them correctly and act accordingly.
Strengthen the problem-solving capabilities to include controlled experiments and coach your staff on the build-measure-learn routines.
To remain on top of things and to understand the system impact of local experiments, leverage your management cadence and shorten the cycles. Turn your Obeya into a crisis action cell. But do not fall into the trap of making it a crisis command center. Respect the span-of-support mindset that is core to a KAIZEN™ organization since it is this mindset that allows all individuals in your company to act as one.
#4 Cherish all your stakeholders, your own people first
As they say in the flight safety instructions: put on your own mask first before you help others. Your people remain your most important asset. Provide psychological safety: have a Plan for Every Person. Let everyone know how important they are and how you are exploring every support line available to keep them on board. Don’t shy away from the flip side to this – you will expect them to do the necessary even if it is outside of their comfort zone. In KAIZEN™ we say: show respect for people but dare to lead. In disruptive times, people need to look at a strong and confident leader. This means being clear, setting boundaries, articulating expectations.
Second, look to your stakeholders across the value chain, work together to strengthen weak links, avoid the domino effect. World Class performance is driven by a multi stakeholder perspective, across the full value chain. It is not a case of strongest link but strongest chain. A KAIZEN™ organization is ‘hard-core’ value stream driven. Suppliers are partners, you work together to increase the size of your economies.
Third, remember to honor your social responsibilities! Chip in by making resources – people, knowledge, production capacity - available for public health and safety initiatives. Become a beloved organization. You will be remembered for your contribution; your organization will be top of mind when the dust settles; you will have help to bounce back.
#5 Communicate, communicate, communicate
Lead with purpose, clarity, and confidence.
Use visual media to remain in personal contact, to share your interpretations of the situation, to confirm INTENT.
Use written media to share details. To create a place where the truth as we know it is logged.
In regular times, over 85% of your workforce does not understand the purpose of the company. Imagine what a crisis does to that percentage.
A comprehensive Strat-to-Action process creates endemic understanding of Intent and Purpose and embeds them in everyday work. Every individual knows how to team up to contribute to the success of the company. Leverage your Strat-to-Action process to serve as a conduit to (develop and) deploy your Crisis Action Plan and create immediate clarity and traction.
Remember that communication is a two-way street. Be there for your staff. Let them know where you are, how you can be reached in case of need. This will increase their sense of security and they will demonstrate the same behavior, creating a sense of belonging and recognition for everyone inside your organization. Giving them the peace of mind they need to keep thinking, working, believing.
The company is a managed services company. It operates as the outsourcing partner for the ICT infrastructure of large corporations. Amongst them a client operation that contributes 16% to the total revenues.
The partnership had been struggling for several years. End-users were dissatisfied with the many interruptions of service and slow response to their everyday problems. Business project leaders were constantly complaining about the lack of technology incentives and project schedules that were not met.
The engineers that worked directly with the client organization were worried that the dissatisfaction would lead to reduced service orders and eventually discontinuation of the services. Management however chose to dismiss the concerns, believing the client could not afford to put the continuity of their ICT infrastructure at risk.
Ultimately, this grey rhino did charge.
In 2008, when the outsourcing contract was up for revision, the client company decided to re-tender and invited our managed operations company’s largest competitor to enter the process.
The contract was lost. And no commercial bargaining could save it. 16% of total revenues gone.
They went into reaction mode:
Respect the signals, evaluate them for what they really are
The signals from this client had not been effectively addressed. The question was if this was true for other clients as well, and how large the total exposure risk was. A task force was established to retrospect on this case and uncover root causes and countermeasures. Until the countermeasure took hold, temporary measures were put in place to contain high risk situations with other clients.
Don’t crash the company
- Even though the hit to the revenue was significant, the bottom-line hit was less so; over the years they had had to give away a lot of free days to compensate for the dissatisfaction; the determining economic driver was not revenue but margin;
- External hires were discontinued
From here on we started working with this company to move to constructive mode:
- The Daily Performance management process became the main point of focus, since this was the heart of data and communication
- Sales funnel management was restructured and intensified, smaller opportunities were re-invigorated to broaden the client base
- Voice-of-the-Customer workshops were organized with three large clients; SLA metrics were redefined to allow early warning monitoring and response protocols were put in place; staff was trained on how to effectively deploy this help chain
- Customer account teams now included Customer Experience maps and data in their decision making process; commercial and operational staff was trained on how to effectively deploy this data
The client base responded positively to these interventions, confirming a significant positive impact to the relationship.
Cherish all your stakeholders, your own people first
- For the remaining staff dedicated to the lost client personal plans were developed to clarify how they would be redeployed and how they would continue to deliver value to the company; short term they were deployed to address the technical debt build-up, simultaneously cross-training them so they could be re-purposed for other clients
- The technology roadmap was reviewed together with the clients to identify short term win-win opportunities. Many of the clients were also feeling the hit of the economic downturn, it turned out they were happy to defer technology innovation projects (which required investments from all parties) in exchange for increased performance of the existing infrastructure.
Communicate, communicate, communicate
- The progress and impact of all recovery activities were monitored from a central space; we introduced the use of visual management and daily pulse-check meetings; this reduced the lead0time for decision making by 75% whilst increasing the speed of implementation
- The visual space was open to everyone – this level of transparency was key to keep everyone on board, de-confused and provided a sense of safety
- It also provided a means to confirm and repeat that the focus on the customer was here to stay.
The company survived. It did not come out of the crisis scot free, it did recover and has continued to grow. The KAIZEN™ practices that we implemented to help them recover are still in place today. They have helped the company quickly recover from many smaller and larger disruptions.
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