Nearshore Americas

Post-Covid-19, Your Organization Needs a New Operational Model

After several months of dealing with markets in constant fluctuation due to the pandemic, most companies have taken the decision to close their doors and “wait until it all passes.”

In some cases, local laws have allowed companies to “freeze” their obligations while they wait for better times. Other firms have opted to ride the “Covid wave” and operate with several virtualization enablers (from collaboration tools to video conferencing or even messenger applications).

Most short-term measures devised by organizations are already in place. After five to six months operating under these extraordinary global circumstances, most companies that chose to “ride the wave” did successfully virtualize operations to some degree. From sophisticated collaboration platforms to more modest setups, everyone did the best they could.

One thing this crisis has been good at is removing the cultural barriers to digitization… Everyone learned how to use Zoom or other rival platforms, and the initial months of the pandemic were characterized by a “no-excuses, take no prisoners” attitude of management regarding virtualizing operations. Due to this “Covid-effect,” most companies have digitized in a way they never thought possible.

But as they realized the uncertainty is going to extend for an unknown period, the need for efficiency comes into play. The playfield has leveled and competition among the newly “virtualized” companies is again relevant. This time, due to the scarce buying power of clients and customers, the competition is not now for growth but for survival in the long run.

… “the competition is now not for growth but for survival in the long run.”

So, the world is now more virtual, in-person visits are a no-go and everything is done by Zoom calls or by delivery agents such as Uber or DiDi… Right?

Well… not everywhere and not in every case. There is still plenty of work that needs to be performed on-site. Virtualized processes, though effective, might not be as efficient as one might like. There is also the question of whether this virtualized arrangement will hold and allow the company to grow again in the future. Covid-19 introduced severe structural and behavioral changes in organizations that will eventually “stick” after six months, so they better be well-considered changes.

According to some epidemiologists, this virus could circle the world indefinitely, resurging from time to time and causing trouble at one location or the other. Even after a vaccine is found, and new treatments for lowering mortality are developed, Covid-19, just like the flu, could become seasonal. The virus could also undergo thousands of mutations that could make it more troublesome or less lethal. We just don’t know at this point. Like with the flu or SARS, we just need to learn to adapt and keep going.

As I mentioned in a previous article about the “minimum viable business” model, organizations must identify those critical skills and capabilities that need to be held in-house. They should find those that are not as critical and that could follow a variable contracting model so the company can expand and contract “as an accordion” that adapts to changing market conditions, regulations, restrictions and re-activation activity peaks.

Besides these internal conditions, the preferences of clients and customers are also changing dramatically. This is most obvious in the food and restaurants industry, where consumers are changing their habits and opting for online ordering and take-out or delivery options.

Constantly changing the structural setup of most companies is nearly impossible. Doing these organizational acrobatics as a regular activity (not in “emergency-mode”, but as the “new normal”) has tremendous implications for human resources processes, leadership styles, organizational culture and employee engagement, as well as the financial logic of the business.

Adapting operational models is crucial for business survival.

Re-Think your Operational Model

That is why you need to adapt your operational model. Re-think the way in which you operate, keeping it as flexible, but also as competitive and efficient as possible.

Changing to a new “operational model” implies:

Revising Your Processes (Key and Support Processes)

While placing a renewed emphasis on the customer experience. Think about how this time will change behaviors and preferences in your clients. Perhaps you may collect some information about what is important for them now and take that input into your thought process. Many touchpoints with clients are now virtual. Therefore, some of your processes need to compensate for that lack of presence on the delivery of their products and services. Small errors in your past model that could be easily tackled and solved can now become huge sources of dissatisfaction unless you have processes in place to catch and resolve those issues virtually as well. Let me present you with a very simple example: chances are you now order your pizza from Uber, Glovo or any other delivery service and their order taking is very convenient. But have they made a mistake in the order recently because volumes have grown due to Covid-19? Sure, you can complain in the app, but can you get it corrected? It has happened to me three times with the same pizza company and guess what? I stopped using them. This is a simplistic example, but virtual operations need to compensate for the lack of “human touch” in your processes. Customer engagement and feedback are more important now than ever.

Revising Your Staff Demographics

Take a look at the skill mix of the overall workforce, the contract-modality mix (permanent staff, part-time staff and external parties, either constant or freelancers – working together as one workforce), the geographical mix since now they could be anywhere, and even the age mix, because some very interesting capabilities and cultural traits could be imported by diversifying on the age mix of the workers. Beyond skills and knowledge, different generations have different ways of thinking and tackling problems. This inter-generational mix can turn into a “secret weapon” for virtual work teams.

Honing your Automation Enablers

So far, you have probably been focusing on quick and easy virtualization. But were your decisions the best ones for the long run? In contrast to the “old” outsourcing model, where the division between “they” and “us” was more visible, even physical, the new “virtualized and interconnected” business environment requires that outsourcers function in the same manner as your own company. You need to maintain control over the whole value chain until the closure of the customer journey. Ultimately, this condition might trigger a need to control the “end-to-end” technology, even on the outsourcer’s side.

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Adapting to a New People Profile

There are many other things, beyond demographics, that might be different in your virtualized model. Those differences include skills, the changes in the expected responsibilities, as well as accountabilities and leadership styles. As your staff composition changes, the processes around it need to adapt. How you handle recruitment, selection, onboarding and the disciplinary processes as well as the engagement-fostering and cultural behavioral-driven processes might also need to adjust.

So, rather than a “collection of changes” in different areas and topics, the “new virtualized organization” needs to have all those changes wrapped around a common logic.

It is this “underlying logic” that you need to define and formalize: processes, technology, people, culture and infrastructure. They all need a coherent envelope that makes sense of how the organization is going to function throughout the pandemic and beyond. You cannot be changing your model every two to three years, so you need to plan for the next 10 years of business development. That model also has to answer your needs of today – where survival is key – and of tomorrow – where growth will again be relevant.

It is crucial to dedicate time to think about this new operational model. Not doing so now implies that you have a plan to adapt “as you go”. But resorting to that ad-hoc method could have two main negative effects: organizational fatigue and the potential risk of incoherent moves by different areas that make you less competitive.

Re-thinking your operational model provides you with a framework in which to function, analyze and react to the unknown. It provides a beacon for the general direction the company must move. You will be glad you did it, five years from now.

Otto Acuna

Otto Acuna is an Internationally Certified Management Consultant that helps organizations to work better through strategy, operational improvement and digital transformation.

He has over 20 years of experience in managerial and non-manufacturing processes and industries. His company, EXYGE.COM specializes in the Financial Services Industry, Shared Services and a wide variety of back office functions.

Otto is the first CMC-Certified Consultant in the Spanish Latin America region and also trained in ISO20700. He volunteers as the Chair of the Professional Development Committee at CMC-Global Institute the international chapter of CMC-Global, the organization that regulates the Management Consulting profession in more than 50 countries and territories worldwide. He recently joined also the Quality Assurance Committee at CMC-Global where he supports the tri-annual audit of management consulting institutes worldwide. Otto operates mainly in Latin America, the Caribbean and more recently in Portugal and Spain. You can contact Otto here.

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