We do not yet know how the Covid-19 crisis is going to play out. But three months into the pandemic, I think we all recognize two facts:
- The period of uncertainty is here to stay for at least 24 more months. Businesses will be affected by cycles of uncertainty as the pandemic peaks and recedes. Even if a vaccine or treatment is developed extremely fast, it will not be available in large enough quantities to ensure lifting the restrictions to the economy for at least a couple of years.
- We need to learn to live with the pandemic and get on with our lives, because no government stimulus or basic income will last forever. After just three months, we are already facing an economic crisis beyond that seen in more than 80 years. If we close completely for three to six more months, there might not be any businesses left when the economy re-opens.
So, if we recognize these truths, what can we do?
In the past month, I have come across two concepts that shed some light on how leaders of different organizations may re-think their operations. I will speak about businesses, but the concepts are universal in their applicability and are just as relevant to government and NGO operations.
Minimum Viable Business
The “minimum viable business” (MVB) model relies on a close analysis of the core value of a company. What is it that they buy from you and not from your competition? Why do they buy from you? Why do they use your services? What is your value as a company to your own clients? What do you do better than anyone else?
Once you grasp those core ideas, you focus on the simplest way to provide that value. What are the indispensable processes? And what is the most streamlined possible version of those processes?
We tend to think of sales and revenue in terms of growth. But that is not so useful here. Sales and revenue are tools for survival, allowing us to endure the hardship while we preserve the essence of what we do. Growth will return once this period ends and the economy revives. Right now, we need to think about our “core processes.” We need to reflect on how to provide them in the cheapest way possible, while maintaining flexibility.
Even as many economies across the world have begun to open, it is worth remembering that future waves of the pandemic could lead to new restrictions. With that in mind, your core processes need to be able to “work as an accordion,” allowing you to seamlessly scale operations up and down in response to these conditions.
That process cannot be left to chance and improvisation. That was what we did three months ago when the first lockdowns were implemented. Although we handled the situation, we did so at considerable cost. Many companies have not survived two to three months of those measures. We have also seen examples of companies – whether shared services centers, retailers or legal services firms – that have suffered sudden changes in circumstance. When one employee tests positive for Covid-19, the company closes for up to a week to sanitize, implement protocols, apply tests and begin to re-open. Meanwhile, there is little to no progress with clients, the orders in transit and the pending “to-do” items on every desk.
To avoid that fate, the MVB model is crucial for company directors.
- You should take a long, hard look at which products or services belong to your MVB. On the other hand, which ones are accessories – great to have during expansion, but not critical to what you do?
- Re-think your processes in terms of the MVB model. Some processes will be related to the MVB, but even they need to be restructured so they work “as an accordion,” providing extreme flexibility without losing their capacity to serve their main purpose. The only way this can be done is through a combination of aggressive automation, remote working capabilities and reconfiguring processes to become “the standard way to operate” rather than “an emergency approach.”
- You should also put any major or lengthy implementations on the back burner. This is not the time for long-term plans. You need quick, cheap and effective tools to allow you to adapt to the new environment. If running yourself is not viable or is not a core-capability at the moment (i.e. “outside your MVB”) then turn to a Business Enablement Managed Service (BEMS) so that you focus on your core capabilities.
The MVB concept was first developed by Source Global Research. However, the concept is applicable to any type of business or organization. Last month, EXYGE.COM offered a webinar in English and Spanish offering ideas on how to reconfigure processes to make them work “as an accordion.”
A second concept that I have heard of recently is “microsourcing.” In many ways, it represents the perfect complement to the MVB model. The concept was developed by Javier Peña Capobianco, the secretary general for the Latin America Services Exporters Association (ALES). They have 35 members in 18 Latin American countries and work closely with governments to facilitate the exportation of knowledge-based services (shared services, game developments, software factories, professional services and others).
The organization recently developed the concept of “microsourcing,” using specialized workers to provide on-demand work for knowledge and skill-based industries, regardless of their location. The concept is still in development and there is not much written about it, but it is applicable not only to knowledge-based positions and industries, but to practically any type of job.
Microsourcing allows companies to identify and recruit experts with relevant competencies and availability. They can organize and integrate those resources with their own processes as needed. This works well alongside MVB, allowing processes to acquire “accordion capabilities.”
In order to implement microsourcing you need to change how human resources work, moving the focus away from finding full-time “employees” and onto finding people with the specific skill sets to support your current processes.
You need also to change how you communicate and treat your workforce. While they may work different hours, they all need to feel welcome – they all need to interact and collaborate.
Microsourcing is more than simple outsourcing or subcontracting. It involves sourcing people based on specific skills and availability, while blending that arrangement into a cohesive, streamlined whole. That is no easy task, but it is the future whether you like it or not, and whether your government understands it or not.
We are starting to implement microsourcing at EXYGE.COM, e-consulting.solutions and nubesprivadas.com. The main challenge is recruiting resources from different parts of the world whose way of functioning – of working – is compatible with ours.
The task involves a great deal of planning and time. Our journey to completely virtualize the operation started in November 2018. It took about a year to implement the internal changes to our organizational structures. Following that process, we realized we had gaps to close. Performing profound structural changes while dealing with current clients, projects and sales is no easy task.
But in the context of Covid-19, we have no choice but to move forward, there is no other way. The complementary concepts of minimum viable business and microsourcing have provided important methodological guidance on how to do that.
There is no “right way” of doing this. No recipe for success. We are all learning here. However, if you decide to seek help, find an accredited professional consultant who knows what they are doing. If you use one of the big guys – Big4, BCG, McKinsey, Accenture, and alike – you are probably covered. But if your budget does not allow for that, find a consultant that is CMC Certified and has been tested by an independent party. The current times do not allow for bloopers or improvisation.
I hope these two concepts do the same good for you that it has done for our businesses, shedding some light on the path ahead.