Businesses at the cross road
Businesses are feeling the intense pressure of increasing interest rates and quantitative tightening. Upcoming economic data is likely to be policy makers' nightmare. There is very clear evidence of a slowing in global demand. There is also clear evidence that inflation pressures are persisting. Pressure of piling up goods is likely as the efforts to suppress global demand and bolster supplies progresses together. The bullwhip effect is likely to play out- a phenomenon where demand changes at the end of a supply chain lead to inventory fluctuations along the chain.
Increasing connectivity, Artificial Intelligence and the Cloud are enabling reliable outsourcing of business, with network learning effects and better quality. Disruptors are reshaping old industries and incumbents are now adopting them and entering into new alliances and collaborations. The result is the emergence of new, cross-sectoral ecosystems connecting multiple actors in sophisticated, interdependent relationships that are simultaneously competitive, collaborative and co-creative.
There is no shortage of pressing needs for companies to address their transformations. Strategy, business models, technology, cybersecurity, staffing, sustainability—business leaders must address them all at once. As new technologies emerge and the demands of customers and markets change, companies have to be ready to change along with them. Those that do will be positioned to maintain a competitive edge, no matter what comes their way. All businesses need to gear up to face the emerging challenges and rethink the following:
1. New business models — defining a new strategy
2. Rethinking organization and processes for new outcomes
3. Quick to learn where action is needed
To thrive and indeed survive, businesses will need to look at each of the above three challenges and act upon them with determination. But, it’s important to remember that above all businesses need to adopt a fresh thinking mindset, understanding the power of the inter-connectivity realized by new technologies. This will ultimately help a business become smarter and more efficient to reap the real benefits in terms of:
1. Global quality products
2. Enhanced productivity
3. Real-time supply chains
The customer shall always represent the beginning, the middle, and the end of everything that we do. The value must flow to the customer. The activity that consumes resources without adding value for the customer is merely a waste and shall be compressed or eliminated. The wastes restrict the flow of value and add to the cost. To flow the value, people are most important in any business. The capability of people for any business can only be enhanced if they together make improvements, solve problems, eliminate wastes and face any emerging business challenges. People must be the true partners, regardless of whether they are leaders or front-line workers. Business can only flourish when everyone is collaborating, and rallying around flow of value to the customers. Instead of squeezing productivity out of a process we need to develop human capital throughout the business. By making people think more deeply about what they do, they learn to make better day-to-day decisions and cooperate with each other to boost business performance.
Quality is much trickier than we think. There are many ways to do wrong. The circumstances keep changing all the time. Problems have to be observed when and where they arise, and people need to address each instance immediately by understanding how things go wrong and learn to do them better. This is adult learning. Adults learn from their mistakes when they realize and accept that they’ve made a mistake. So, they need ways to check and test their own quality. Having a checker do it and tell them do not allow the self-learning – nor improves competence. Improvement activities are not about improving processes, but about deepening each person’s understanding of problems and leveraging their capacity for insight and initiatives by trying new countermeasures.
There are logical reasons for the organizations to reevaluate offshoring and do lean-shoring. Costs, risks and strategic impacts are large enough over the low wages. It helps in:
Shorter lead time
Lower inventory levels
More responsiveness to changing market demands
Lean-shoring is a faster and efficient way to strengthen the local economy, as it:
Helps to balance the trade and current account deficits
Reduces unemployment by creating productive jobs
Reduces income inequality
We will never be in control of every aspect of our work. Complex, interdependent systems and new technology will keep challenging from time to time. But more wealth will be generated through new business models that are customer centric, people centric and innovation-driven. The management skills needed now will fall under two main categories: people management, and creativity. The ability to work effectively in teams, the ability to anticipate problems before they arise, the ability to identify opportunities for growth within the business environment and the willingness and ability to change with the times.
It is very important to understand that the work of a machine, or the function of any technology must be separated from the work of humans. Assurance shall be made that machines or any automation should work for humans, not the other way around. This respect for humanity, and this way of thinking about the design of work, must be the foundation of all work in any progressive modern company.