Leading into the New Pace of Change

An Insight from the 2019 Next Generation Operations Summit

"It is uncertainty, not risk, which is the more prevalent circumstance in changing economic and business environments."
John Maynard Keynes
Nobel Prize Winning Economist

As the global velocity of change accelerates, Keynes’ insights are more poignant than ever. For chief operating officers and chief supply chain officers, the new pace of change is driven by questions that that have the potential of completely transforming operations: What if our customers could co-design an entire service or product virtually with our firm –-how would that change our operations? What if a supply chain could “think” on its own-- what would that mean for our business? What if value shifted from single firms to broader ecosystems and networks--how would that impact our current business model and create new ones?

These questions aren’t alluding to a distant future; they’re highlighting advances that are now driving a new pace of change--one that is faster than ever before. This pace of change is being felt acutely by c-suite executives. In fact, as leaders at the 2019 Next Generation Operations Summit reflected on the level of change they anticipate over the next five years, 74% of them said they expect “significant change” and 25% expect “extreme change.”



Attendees that said they expect
significant change over the next five years.

Attendees that said they expect
extreme change over the next five years.

What matters to the consumer? Service, speed, and value… We need to be able to operate at an increasing pace. The days of crazy long lead times have disappeared.”
Colin Browne
Under Armour

The same trends and technologies driving the speed of change are also opening new possibilities for operations and supply chains. Artificial intelligence, particularly machine learning, is enabling operations and systems to learn and to be an engine of growth. Digital platforms and emerging business models are opening up opportunities to not only do good for our planet but also build trust in companies and brands. And customer demand for real-time customization and co-design is delivering an entirely new world of customer engagement and centricity.

To effectively lead in this new pace of change, today’s operations and supply-chain leaders must have extreme dexterity – constantly striving to decrease complexity and increase certainty, build new platforms for growth, and ensure sustainability and trust. To accomplish this, leaders at the Summit honed-in on three interlocking strategies that form the basis of how they see growth in the future, and importantly, where they spend their time day to day:

Three Strategies for Achieving Growth

Current Business Value

First, the day-to-day focus of the CSCO function is generally on Optimizing Current Business Value – executing strategy that preserves core and organic business value while managing for risk. The focus is on “current state” supply chain models and supporting activities such as building and scaling infrastructure, navigating the regulatory environment, mitigating natural disruptions to the supply chain, and managing workforce and capital structures.

New Business Value

Second, while maintaining operations and supply chain performance is a must, leaders are increasingly taking a central role in Generating New Business Value – leading strategy that builds inorganic/new business value. The focus is on ideating and incubating “future state” supply chain models based on disruptive technologies and innovations, fostering partnerships and alliances, building ecosystems, as well as financing and scaling viable models.

Dynamic Capabilities

Third, operations and supply chain leaders must work across the C-suite and be a central figure in Creating Dynamic Capacity – aligning operations and people with a continually evolving value proposition and business model. The focus here is on adopting and integrating new skills and competencies, while embedding dynamic capabilities in the firm’s and supply chain’s structures, systems, processes, and people.

"The fundamentals of our business are just completely upside down. It’s being disrupted. It’s discontinuous, and so we have to reinvent an enormous amount in order to remain successful."
Marc Engel

As leaders balance this triad of activity, it becomes apparent that many firms’ structures, systems, and processes are put in place – by design – to ensure efficiency, consistency, and stability. While this is important, given today’s turbulence and speed, there’s a premium on increasing the certainty in decisions and actions as well as improving the agility of the enterprise. Thus, executives are on point to critically assess where and when the firm should be “fast,” where it should be “slow” and how to redesign the enterprise for overall agility, smart growth, and value at speed.

The case studies and learning sessions at the Summit also illuminated new ways to think about complex operations and supply-chain challenges and the key leadership skills needed to start and sustain progress. For example, first, leading firms focus laser like on changing customer expectations and what that means for redesigning a supply chain and operations. Second, leaders are thinking intentionally about the pace of innovation in services and solutions, the use of data and analytics to drive insight, and the implications for people and culture. Third, leaders have to prepare themselves for the challenge by developing an understanding of the “Technical Work” of transformation – the design of governance, structures, and technological systems that enable a supply-chain to change over time, and the “Adaptive Work” – the methods of exercising leadership to build ongoing alignment, trust, innovation, and sustainability.

What keeps me up at night? Companies that are afraid to try anything new…. Those that just want to do it the way it’s always been done.”
Stan Deans

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