The Right Mindset: Bridging the Control-Growth Divide
The contradictory pressures of both growth and control have long created a paradox and require a delicate balancing act.
There is a growing awareness that adaptive systems – those that survive and thrive in hostile and volatile conditions – carefully balance mechanisms and capabilities for both control and growth. In the vast majority of businesses, the prevailing ethos, conditioning, tools and techniques of the last 50-100 years have favored the ‘control’ mindset over the ‘growth’ mindset. While this delivered results in stable, predictable settings, it has in many cases unfortunately resulted in very rigid and fragile structures and has served to heighten the Control-Growth paradox now that the external environment is changing.
The paradox is compounded yet further given the speed at which we need to recalibrate our mindsets, processes and behaviors. Most companies do not have the time, or the appetite, for large-scale, company-wide ‘initiatives,’ and in the spirit of agility, we need to progress rapidly recognizing the overlapping and interdependent nature of strategy development, deployment and delivery – keeping focused on our strategic objectives while remaining flexible about how to achieve them.
A typical pitfall in managing for both now and the future is the artificial separation of ‘strategy development’ and ‘strategy execution,’ founded on the outdated belief that a small group of ‘masterminds’ can determine the route to our goals and the rest of the organization just needs to march along it. The dimensions of strategy development, deployment and delivery need to become much more overlapping and intertwined, forming an on-going and adaptive strategic dialogue – simultaneously focusing on both delivering now and developing for the future.
Traditional demand and supply-based planning processes, such as traditional, operationally-focused Sales & Operations Planning (S&OP), that pursue the holy grail of predictability and accuracy project management and Stage-Gate-type processes that look for certainty from the earliest gates; measures and scorecards focused on functional control, as opposed to cross-functional alignment and pointing the way to strategy, etc., are beginning to collapse under their own weight and, unless recast to cope with the new normal, will lose value through irrelevance.
Take just one sacred cow in the S&OP process for example: the perfect forecast. Tomes have been written, millions have been spent and careers have been lost in the quest to secure the “right” number. In a VUCA world, a much better quest than building the perfect forecast is building the organizational agility that enables your business to adjust to quickly shrinking or quickly growing demand by equal measure.
A great example of this is a 100-year-old manufacturer of construction supplies that grew through more than three dozen acquisitions over its history. The same scale afforded by the M&A also created overlap, inefficiency and “stiffness” in the company’s ability to move in synch with the market.
This company righted the situation with a supply chain strategy and mantra to:
- Eliminate surplus
- Stock only raw materials, and
- Create quick turn through a network of build-to-order manufacturing hubs throughout its territories, none more than a day’s drive from the customer.
The strategy was entirely driven by a highly dynamic and responsive collaborative, cloud-based integrated business planning system. At the heart of the strategy, one word: agility.
The company broke up a centralized warehouse and distributed materials. It got rid of pre-fabricated parts and stocked just raw materials. It jettisoned overlapping systems and connected a central planning system through integrated business planning technology.
And, it united multiple demand plans into one view through a dynamic collaborative demand aggregation process. That view enabled it to do “what if” scenario modeling to scope opportunistic potential, evaluate downside risk and build drastically greater flex into its operations. The vice president of Supply Chain shared the result, counter-intuitive to the control paradigm at its core: “We made the demand forecast irrelevant!” Indeed, by turning its supply chain model on its head, right down to the fundamental mindsets and metrics, this business was able to meet up to 30% unforecasted demand. That is agility for growth.
