The Covid-19 pandemic has created uncertainty and complexity for business on an unprecedented scale. The operating environment is changing on a weekly, and at times a daily basis, as new information emerges and governments around the world seek to manage restrictions and economic support.
As restrictions start to ease, no one is really sure what the impact will be. How will people react and adjust to a new ‘normal’? What shape will economic recovery take? Will we ever see a return to pre-pandemic conditions or have things changed for ever? What form might these lasting changes take?
These and other questions will continue to challenge business leaders who will need to navigate through this uncertainty.
One thing that is certain, is it appears we will be living with the virus and its consequences for some time to come. This means the ‘normal’ way of life will be disrupted and this will impact how organisations operate. There will be a need to be constantly ‘ready’ for what comes next. Organisations need to transform how they operate to be more suited to a complex and uncertain environment.
But how should this transformation be approach and what should it look like?
The answer is to take a holistic approach that is based on an understanding of the properties of complex systems.
6 key areas for transformation
The following model (which is known as the 6C Framework) was developed by combining an understanding of complex systems and business structure and operations. It draws on an understanding of how naturally occurring complex systems (such as a rainforest ecosystem) adapt to changes and applies this to the modern organisational context.
Figure 1: The 6C Framework for organisational transformation
The Framework focuses on 6 key areas of the organisation. Each is considered individually and collectively to ensure they are approached in the best way to suit the environment and work in harmony across the organisation.
When dealing with the emerging post-COVID 19 lockdown environment, executives and directors can use this framework to transform the organisation and take advantage of opportunities as they emerge.
Specifically, directors and executives can consider the following:
- Governance. In an uncertain and complex environment governance needs to be more perceptive and less directive. Guiding the organisation rather than strictly controlling its operations. Transformation requires ensuring the governance structure, systems and personnel are looking to the future to anticipate what is coming and allowing adaptations to emerge from within the organisation.
– Has your governance evolved to become more perceptive or is it still focused on controlling outcomes and fire-fighting?
- Management. The organisational structure, roles and accountabilities need to be far more flexible and take on a more entrepreneurial approach. Innovation, cross-functional collaboration and flexible working will be more important and allow faster responses to a changing context.
– Are silos and strict adherence to structure inhibiting your ability to respond to a rapidly changing environment in a timely manner?
- Risk management. Uncertainty brings with it more diverse risks. Few organisations would have spent much time considering the risks associated with a global pandemic before this year. The current environment brings with it the temptation to more tightly identify and mitigate risks. However, to succeed in an uncertain environment requires a degree of risk taking. Organisations need to experiment and try new things in order to be successful.
– Has your organisational risk appetite and approach to risk management evolved to deliver a more balanced risk-taking approach?
- Resourcing. Changes are likely to emerge quickly as the lock downs ease and work on the economic recovery begins. Taking advantage of these changes and supporting innovation will often require resources to be deployed quickly. Organisations will need to have a degree of flexibility and spare capacity to their resourcing.
– Do you have the capacity to quickly deploy resources to take advantage of opportunities and back winning ideas?
- Strategy. Uncertain environments create a range of possible, and often equally likely, future outcomes. Traditional strategic planning relies on a much higher degree of predictability and certainty. Strategy development in the economic recovery phase will require significantly different approach to traditional methods. Boards and executives will set broad parameters (such as purpose and vision), whilst the specific strategies to pursue purpose will emerge from within the organisation.
– Have you transformed your approach to strategic planning to allow for emergent strategies to develop?
- Culture. Organisational culture is the key differentiator between success and failure for any organisation. This will not change as we emerge from the lockdown. However, what will change is the nature of the culture required. In an uncertain and complex environment, executives and boards need to foster a more inquisitive and entrepreneurial culture, one that allows for controlled experimentation to test opportunities.
– How will you actively develop the right culture – one that allows the organisation to thrive in a post lockdown world?
The 6C Framework is part of a broader methodology that helps organisations adapt to an increasing complex world. When applied to the current Covid-19 pandemic environment it will enable boards and executives to gain a holistic view of their organisation and put in place changes to deal with the uncertainty being faced.
If you would like to know more about the 6C framework and how to transform your organisation to better deal with uncertainty and complexity please also read the following articles.
About the author … Dr Jason Talbot is a Chartered Accountant and the Managing Director of Graphite i2i, a specialist boutique management consulting firm which provides business transformation, performance improvement, M&A, strategy and governance services to medium and large organisations. The company’s highly innovative business assessment and transformation methodology, 6C Framework, provides CEOs and Boards with a holistic view and understanding of their businesses capabilities, allowing them to readily identify areas in greatest need of attention or determine where future opportunities lie.
Should you require assistance dealing with an uncertain future:
Call Jason on 0450 049 444