Organizations in a VUCA-world
Bearing in mind the paradigms mentioned above, the sequence of actions further down is recommended to build an organization that can excel in today’s VUCA-world. This is kept very brief, and it goes without saying that each step needs the right tools, tactics, and involvement of people that the desired outcome is produced. Getting this done is not a one-man-show, but accountability for getting it done can only be with one person.
Having the right type of people in the appropriate organizational setup is key to business success. When looking for that, it helps to understand the specifics of Logistics and Supply Chain Management:
This brings me to the VUCA 2.0 definition coined by Bill George (senior fellow at Harvard Business School), which I like much better – it stands for Vision, Understanding, Courage, and Adaptability.
- Define the right organizational setup and put the right people in each process-owner role. Think of an organization that resembles the value-/process-chain. Rank attitude and ability to adapt to change higher than formal qualification.
- Communicate the expected input and required output to every process owner. This might sound like micromanaging. However, the security that comes from clear expectations (standards) fosters creativity and drives improvements. (As Taiichi Ohno put it: "Without Standard Work, there is no Kaizen"). Permanent uncertainty wears out people, and the process will never mature.
- Establish flow by managing the interfaces. A superior should not interfere with the process execution itself (the people responsible for the process know it much better) but instead bring process owners together whose processes are linked and moderate the definition of Input-/Output.
- Create meaningful KPIs. Why does this only come as the 4th position, someone might ask. The reason is that if KPIs come before the preceding actions have been completed, people could engage in sandbagging and are no longer open-minded to a genuine approach to review the organizational setup. KPIs are not to measure the performance of the individuals, but to understand if the process works, to identify bottlenecks, and to get evidence if a change was actually an improvement (or shall be rolled back).
- The ability to change has become the new standard – we live in a VUCA-world (Volatility, Uncertainty, Complexity, Ambiguity) - but the VUCA-term must not become an excuse for bad planning or hastily introduced process changes. A genuine need for change shall be embraced, and there is no point in fighting changes. But these changes need to be supported by a change-management and the continuous improvement of the organization's ability to change is the cornerstone that prevents from becoming obsolete.
- Continuously educate (knowledge) and coach (ability to apply the knowledge) the team and make them cascade down the philosophy.
- Within any corporation that is dealing with physical products, the Logistics and Supply Chain community is the largest that has to work synchronized and whose processes are heavily connected. Typically, the number of associates in the marketing organization outnumbers the Logistics and Supply Chain folks. However, the sales-associate A in shop A hardly feels the impact of sales-associate B's performance in shop B.
By contrast, the whole Apple-corporation would suffer if the person responsible for sourcing the sim-eject tool had missed placing a manufacturing order before going on a four-week holiday. - Creative people find solutions and can improve processes – however, such creativity must not impair the process stability. So, in other words, looking for ways to do things better within the process is good as long as the output remains unchanged. Changes to the output must not only be validated with the next process-owner but with all process-owners further down the chain (and potentially the customer – since the end of company A's supply chain is the start of company B's supply chain).
- Logistics and Supply Chain is rarely about one piece of work that is being produced – typically, it is dealing with the question of how to produce thousands of physical pieces within a day or even an hour. As mentioned before, everything is connected, so it rarely helps the system to improve the process that is already performing better than the whole system. It is always the bottleneck in the system that requires attention and effort.
