For decades, efficiency has topped the list of strategically important qualities for businesses in every sector. To maximize profits and maintain competitive prices, companies kept figuring out new ways to do more with less, often facilitated by adopting new technology-based solutions.
While most operations have room for improvement, optimizing exclusively for efficiency can also stretch operations, inventories, and processes so thin that there’s little room for error or adjusting to the unexpected. Unfortunately, the past several years have featured nothing but the unexpected, and those rapid, unplanned shifts have exposed some fatal flaws for many businesses.
Companies running too “mean and lean” are getting a front-row seat to how brittle and inflexible they’ve become. When a wrench gets thrown in the works there’s no slack or space to gracefully deal with that challenge.
They’re also realizing that maximum efficiency squeezes out any room for innovation. Experimentation and uncertainty are anathema to maximizing productivity at all costs.
The 4 Hindrances to Organizational Resilience
A 2020 Gartner study found that despite good intentions, businesses falling short on resilience typically suffer from one or more of the following issues:
New processes are designed to work within the current situation. But the status quo doesn’t stand still for long as personnel come and go, teams get reorganized, and priorities shift. But if no one is proactively revisiting and updating those processes, they eventually fall out of sync with how the organization works today, which can hold the business back and derail other, newer optimization efforts.
Businesses focused on efficiency often hold back on hiring additional staff to keep costs down. But what was sufficient a year or even a month ago can become sorely lacking in a hurry, particularly when dealing with new challenges, surges in demand, and fundamental shifts in how work gets done. Overtaxed teams lead to burned out workers, attrition, and sloppiness.
Struggling organizations can look beyond their headcount for other deficiencies that make them vulnerable in uncharted waters. Lacking appropriate tools and technologies can be just as dangerous as an inadequately staffed or trained team since staff must compensate for these shortcomings.
Executives want certainty. It makes it easier to plan, set expectations for stakeholders, and remove potentially stressful or disruptive obstacles from their paths forward. But assuming things will always go according to plan when creating policies and processes puts organizations at a huge disadvantage when, inevitably, things go sideways.
Read the complete blog post at Channel Futures.