How do we know what to do next when we don’t know what’s next?
That might sound like a question emerging only from a landscape forever altered by COVID-19. But the truth is, that question has always applied to each and every day of our lives. COVID-19 and our efforts to recover from it only made the truth hard to duck.
When something like a pandemic happens, we finally have to confront the truth we have avoided: We don’t know what’s next. Ever. Every morning, we stand in the doorway to a day we cannot predict.
Standing in this doorway we have a choice to go through or to stay asleep.
As the poet Rumi said, “People are going back and forth across the doorsill where the two worlds touch, The door is round and open Don’t go back to sleep!”
Setting the Foundations
Poetry can give us images that change our perspectives in a way data or flow charts can’t. But it isn’t enough. We have to be able to translate the truth into decisions and actions.
In this case, the structure of the toolkit for action is very similar to the toolkit of improvisation in music, theatre, or the martial arts: solid foundations and responsive technique. The foundations required for an organization to walk through the metaphorical doorway and thrive are simple to talk about, but require discipline to create and maintain.
A lot else can be wrong, but if an organization’s culture is healthy, it can absorb a lot of shocks to its system, learn from them and emerge transformed and stronger. The foundations of that healthy culture are psychological safety, a driving sense of purpose and a binding sense of belonging.
Mandy Farmer and her leadership team at Accent Inns are an example of a business with a mission. By turning their hotels into havens for front line healthcare workers needing to shelter in place, away from their families, Farmer and her team created a sense of purpose and a sense of belonging for the people who needed a safe place to stay, so they didn’t bring any risk home to their loved ones.
Cash is king, and liquidity is the ace. A disciplined management of cash flow — the speed of the entire order-to-cash cycle — ensures that value created for customers yields cash as fast as possible. Good liquidity ensures that if cash on hand is not enough, or debt is cheaper, you are in a strong position to access and leverage debt for growth or transformation.
Smart companies are mixing the digital and the financial foundations. An engineering firm I know is compressing and accelerating the recording of work-in-progress (WIP) to get accurate invoices out faster, and then using automated billing and reminder systems through an accounting/Enterprise Resource Planning (ERP) system.
In the world of Google reviews and “Rate-My-Anything,” a strong, authentic, trusted brand backs your social contract with your customers. Market share, repeat and referred business, and a customer experience that justifies good margins, are all built on a strong brand. A strong brand is hard to build, because like culture, it is not entirely up to you.
As Amazon’s Jeff Bezos said, “Your brand is what people say about you when you are not in the room.”
Examples of good brand moves during this crisis are local retailers’ creative pivots, restaurants like Charelli’s innovative takeout, Little Jumbo’s mixed drink deliveries and Westshore Law’s resource list to help people navigate some of the overwhelming employer information coming from the feds.
I also think highly of Dr. Henry’s personal brand (and I applaud the good brand move by Fluevog in the creation of the Bonnie Henry shoe).
One brand that got it badly wrong was McDonald’s. When it launched its new social distancing logo redesign, with the iconic golden arches separated for the first time ever, the backlash was swift. How could McDonald’s talk about physical distancing when it did not pay its employees to stay home when sick?
Time to Dance
With the foundations in place, you are in a position to dance — to improvise in a changing environment. But doing this means committing to practices and priorities. These following ones are central.
To do anything innovative or unplanned or experimental requires a high-trust environment. Trust is a non-negotiable two-way street. If the organization is not transparent and well structured, with clear standards, trust will always be in short supply. So will innovation and the ability to respond effectively to the unplanned.
Several firms in B.C.’s construction industry failed this one because it was discovered they had been lax with on-the-job safety requirements. This was discovered when several employees — notably some courageous women — blew the whistle.
Rapid Value Creation
The point of this dance is value creation: creating responsive, sticky value for customers and employees. To be responsive is to be quick. You can intuit what customers might want, but if you don’t have a process for cheaply and quickly testing your assumptions — and continuously improving based on what you discover — your value will fade. It won’t make it through the door to tomorrow.
Great examples of Rapid Value Creation include various B.C. breweries and distilleries who moved some or all of their production to alcohol-based sanitizers. Another example, combining supply chain management/branding/marketing, is London Drugs’ move to clear shelf space in its centre aisles for local producers.
A Two-Part Framework
Trying to be effectively innovative while taking care of Business As Usual (BAU) is like rubbing your tummy and patting your head at the same time. BAU structures (generally hierarchical) that serve maximum profitability are not the same structures that serve innovation (generally flatter networks).
You can’t achieve both results with one machine. Some sample solutions to this dilemma include Kotter’s Dual Operating System model and Deloitte’s Edges model.
If we can’t dance (innovate) and make do at the same time, where do we find the capacity to sustain two levels of effort at once? Most smaller organizations have no capacity to innovate without cannibalizing the ability to conduct business as usual.
The answer is delegation and digitization.
Optimize your organizational structure for decision-makers, bring in outside help and automate everything you can with digital tools.
Do take note that the Canadian government is offering to support innovation for larger projects through the Strategic Innovation Fund through Innovation, Science and Economic Development Canada and the National Research Council’s COVID response programs.
We were 20 years into the fabled 21st century (this was supposed to be the age of the Jetsons, remember?), with many organizations still stubbornly refusing to leave the 19th century, never mind the 20th, in culture and technology. Then COVID-19 hit.
From e-commerce, to remote work, to ERP systems, the new digital world has finally arrived. Customers, employees, suppliers and competitors are making significant strides in adopting digital tools.
If you wait to join them after “things have settled down,” it will be too late.
What Comes from Uncertainty
When they work, improvisation and dance are remarkable human activities. They create something new and valuable in real time, with complete commitment to the present.
Whether the improvisation is in hip hop or the Argentine tango, the discipline of dance improvisation can teach us a lot about the relationship between foundational skills and innovation in unpredictability.
They show us how to give the audience what they came for: Something beautiful created in uncertainty.
Clemens Rettich is a business consultant with Grant Thornton LLP. He has an MBA from Royal Roads University and has spent over 25 years practicing the art of management.