Operational Transformation is a process of change that aligns an organisation to a new level of effectiveness called operational excellence. Change is constant, and as the world evolves, organisations need to adapt to the changes. Globally, the economic system is experiencing stress from high energy prices, the Russian-Ukraine war, a rise in public and private debt, an increasing inflation rate and a looming recession. The International Monetary Fund (IMF) has projected that global growth will fall to 2.9% in 2023, and in Nigeria, the GDP is expected to drop to 3.2%. Given all these, organisations need to develop operational resilience to overcome the challenges that the economic downturn would cause. The big question, then, is, How can businesses achieve this?
Understand your Vulnerabilities
Self-awareness is integral to self-actualisation. Hence, the first step to developing operational resilience as an organisation is to understand your vulnerabilities or challenges. This can be achieved by gathering information and analysing your business’s internal and external environments. It is still early in the year, so as different organisations hold their annual strategy retreats, the business vulnerabilities should be at the fore of discussions to ensure adequate preparation to address the possible operational challenges during the year.
Organisations can also leverage data visualisation tools to understand business risks and develop an effective risk management framework. Also, prioritising employees’ welfare must be at the centre because an organisation can only achieve resilience when its employees are resilient. Hence, organisations should make genuine and significant efforts to promote their employees’ mental and physical well-being.
Use the War-Game Technique
The war-game technique emanated from the Prussian Military in the 19th Century when it was used as a military strategy to train officers. Outside of the Military, the war-game technique has been used by businesses to develop marketing strategies and risk management strategies, among others.
War gaming technique is a simulation that makes expert participants make decisions in a “war game” to validate their assumptions and experience the effects of their choices in a “safe environment.” War games are done by experts; it is forward-looking and provides considerable knowledge and business insight. By using the war game technique, business leaders can evaluate their decisions based on their effects or consequences and, in the end, achieve a great result that will enhance operations transformation. The technique will also ensure that the right priorities are set to tackle the business vulnerability and that resources are effectively allocated.
Develop a Robust Supply Chain Capability
It is expected that businesses in the supply chain, manufacturing and logistics sector will be adversely affected by inflation and supply chain crisis. As some businesses are still recovering from the aftermath of the COVID-19 pandemic, the global economic crisis, geopolitical tensions, high inflation rate etc., may threaten the supply chain sector/management.
Research has found that businesses – particularly supply chain players- need to be agile and flexible in responding to changes and external threats. Similarly, businesses should foster collaboration and partnerships across the supply chain ecosystem. A robust supply chain plan should also be in place to facilitate capacity planning, inventory management & optimisation, demand management, master production scheduling and materials replenishment planning.
Create a Great Customer Experience.
Customers are the heartbeat of businesses; without them, there is no market. Hence, during a turbulent economic time, it is imperative to double up on creating a great customer experience. Businesses should have a customer-centric culture and create a remarkable experience during the customer journey. In a highly competitive market, sometimes what distinguishes brands is not just in the product offered but also in the customer experience delivered.
According to a Forbes article, one of the trends that will shape 2023 is the use of metaverse to create an immersive customer experience. Such that customers interact with businesses and fellow customers through immersive technology such as Virtual reality and 3D. Brands such as Hugo boss and Walmart have already set the pace for this trend. Thus, businesses should leverage technology to improve customer experience and satisfaction. A good way to achieve this is to maintain effective communication with customers to ensure they are top of mind.
Compliance with Regulations and Global Best Practices
Operational Resilience remains a top of list item for regulators globally. For example, the Basel Committee released the Principles for Operational Resilience in the banking sector in March 2021 to strengthen the bank’s approach to operational risk and improve its operational resilience. A few months later, the Committee released the updated Principles on Outsourcing. In Nigeria, the Central Bank of Nigeria conducts bank examinations and stress tests to ensure that the banks stay resilient.
Businesses must comply with sector-related regulations, guidance and industry standards to strengthen their operational resilience.
Operational Resilience is a means to an end, the end being to outpace the competition and gain a large market share while staying profitable. Turbulent times come and go and are imbued with numerous lessons. Operational resilience involves earnest preparation, diligent planning, formulation and implementation of the right policies. Businesses with operational resilience are always armed with the right tools to respond to different shocks and tests that make them sustainable in the long run.
At pcl., our Strategy and Operations Transformation team is well-positioned to help your business develop resilience and navigate today’s economic environment. We understand the importance of incorporating an aligned business continuity plan into an organisation’s corporate strategy for robust business operations. Thus we offer a complete portfolio of strategy and operations consulting services to assess, design, implement, exercise and maintain the maturity and sophistication of your business model.
Send an email to firstname.lastname@example.org to start your resilience journey today.