Traditional market leaders have spent decades creating intricate, fine-tuned organisations, processes and hierarchies to drive efficiencies. However, even before the coronavirus pandemic, these complex structures were proving a hindrance in our fast-changing world – the factors that drove success in the age of ‘production line delivery’ couldn’t keep up with the pace of the digital age.
Our research into organisational agility highlighted the scale of this problem, with 60 per cent of organisations saying ‘complex organisational structures with too many layers of management’ were holding them back. Those with simpler structures, on the other hand, could quickly recognise and adapt to change, exploiting opportunities long before the ‘old dogs’ could adapt.
Did you know the top 10% of financial performers are 30% more agile than the rest?
COVID-19 is further proving the importance of simplicity, with the environment and challenges moving too quickly for complex, circuitous processes to cope. Those that have been able to pivot in response to the disruption have been organisations with minimal hierarchy, decentralised decision-making and cross-functional teams that focus on delivering value, rather than adding extra layers of features (and complexity) to products.
This kind of simplicity is possible, even in incumbent organisations that have decades of complexity built in. We’ve seen that old dogs are learning new tricks as they respond to the pandemic. And as the world recovers from COVID-19, or at least learns to live with it, designing for simplicity will be key to long-term success. In our experience, that means focusing on four areas:
As the pandemic affects revenues across sectors, businesses need to really understand what will attract and retain customers. They must then pivot away from products and services that sit on the edge of these high-impact offerings to focus on a simple, valuable position in the market. If they don’t, teams won’t be able to maintain the relevance of an array of products and services in the face of rapidly evolving customer needs.
We saw how valuable simplifying market offerings can be when working with a global emerging markets insurer to turn around a failing organisational transformation. They were trying to offer too many things, so we directed the limited budget available to the most important changes. For example, one project was over a year late and would take at least another year to finalise. We helped the sales team identify a subset of the project they could launch sooner, enabling earlier feedback from their customers. By simplifying what went to market, the insurer launched a product range within months and achieved 10 times their anticipated sales volume.
To simplify market offerings, leaders can:
With physical offices mostly deserted and other workplaces requiring radical new safety measures, organisations have had to rethink their operations. Those that have found it easiest are the ones that started with simple operations, or took the opportunity to simplify how they worked. And beyond the pandemic, simplifying operations will persist as it makes it easier to pivot in response to other internal and external shocks.
The structure of the organisation can make or break efforts to build this operational simplicity. Cross-functional teams, for example, can take products through much of the value chain without slow sign-off and handover processes as all the required skills are working together. Conversely, functionally siloed teams require a lot of effort to collaborate effectively, which can make it harder to build momentum.
We experienced the benefits of simple operations as the COVID-19 crisis in the UK escalated. The Government asked for our urgent help to deliver enough ventilators for the rapidly rising number of COVID-19 patients. With more than 5,000 offers of help from organisations across the country, we needed to simplify decision-making. So, we created a Technical Design Authority (TDA), which served as the primary body for making recommendations about the choice of ventilator designs. We staffed the TDA with PA people with deep expertise in healthcare, medical device development, data modelling, product design and engineering, and public sector procurement and supply chain design. We also brought in the most experienced clinical experts from across the UK, along with government representatives and the MHRA. The TDA gave us the ability to get the right decisions made by the right people at the right time.
To simplify operations, leaders can:
COVID-19 has shown how quickly the world can change. The organisations that have been most successful in responding to this unprecedented pace are those with a clear sense of purpose, distilled into shorter, tangible goals.
This is how a UK retail brand switched from a traditional bricks-and-mortar model and started to deliver to customers’ homes in just three weeks – less time than it might have previously taken to schedule a meeting with all the necessary executives. By breaking the work into smaller, achievable goals and starting with those actions that were within reach, they were able to understand the most important practical challenges and focus on those – making a seemingly distant vision become a reality far sooner than they hoped.
To simplify guiding goals, leaders can:
We’ve all experienced significant changes to the way we work. People are isolated, often distracted with childcare, health concerns and imperfect home office solutions. Now more than ever, they need more leadership and less management. Organisations with simplified governance that have made the shift from roles and hierarchies to empowered, cross-functional teams, have seen the greatest successes.
Technology business Arm, for example, has been able to rapidly pivot to support health services, adult social care providers and critical infrastructure thanks to an agile operating model that lets IT delivery teams organise around changing business priorities. The flexibility this creates means they’ve even been able to offer a standby IT team that’s ready to support military field hospitals in the UK if necessary.
To simplify leadership structures, leaders can:
As the COVID-19 pandemic changes customer expectations and how we work, organisations that embrace simplicity will be best placed to pivot at pace to meet the expectations of our new reality and recover quickly. By simplifying market offerings, operations, goals and leadership, even large, incumbent organisations can develop the agility they need for long-term success.
Discover all our insights related to COVID-19