Think back to the end of last year, even the early days of 2020. If someone had suggested that globalisation was about to face its greatest challenge, most of us would have dismissed the comment and moved on.
But it’s happened. COVID-19 has turned everything on its head, fragmenting our daily routines and globalised supply chains alike. The WTO estimates global trade could fall by as much as a third due to the impacts of the pandemic.
The assumption that globalisation was here to stay, and that companies could optimise for the ‘whole’ while stripping back local management expertise, now needs a rethink.
Globalisation will continue to present business opportunities and challenges, but global supply chains are complex and no industry or country is immune to these disruptions. In this environment, there’s one fundamental question leaders are asking: How do we re-organise our business to deal with the new-normal?
Understanding global complexity, leveraging local agility
Much remains uncertain, but there’s no doubt the old ways of operating will no longer work in a post-pandemic world. Customer and employee expectations have changed. The old structures and processes we depended on have been disrupted – permanently – and economic shockwaves are likely to continue for some time.
Meanwhile, local regulations are evolving quickly to respond to needs on the ground, with some expectation of a quid pro quo – businesses are expected to deliver value back to that local market – before its shareholders or its global headquarters.
But there are still opportunities, particularly for organisations that quickly adapt to the new world order. With the traditional ‘efficiency through scale’ approach under pressure, organisations need to foster local agility and empower those at the edge of their organisations to take ownership and responsibility, alongside global capabilities and networks.
The key to striking the balance between the sometimes competing pulls of local and global responsibilities lies in ‘powering’ those at the edges to take ownership. This has always been a hallmark of agile working structures – providing autonomy to those closest to customers, communities and partners – and centralising information and decisions at the core only when it adds value to the whole.
In this post-pandemic environment, businesses need to ask what their purpose is – who do they want to be?
Re-thinking organisational structures and processes
The pandemic has revealed the power of organisational purpose in no uncertain terms. The usual scenario planning has been replaced by having the capabilities to respond in real time to execute on a clear and uniting purpose.
Every organisation needs to consider what this means for their business individually, starting with a conscious decision about being global, local or taking a hybrid approach – and putting appropriate business structures and capabilities in place to execute this vision.
Businesses that act now while their competitors are still working through their tactical responses to the crisis phase, can steal the advantage. Now is the ideal time to prepare for rebuilding by grappling with and acting on this big decision.
Five ways to re-organise structure
For many organisations, the pandemic has forced a shift to speedier decision making and improved collaboration. New structures and capabilities to realise the organisation’s purpose should build on these learnings, rather than letting old behaviours creep back in as ‘normality’ returns. We’ve identified five key ways achieve this:
- Reduce the hierarchy – highly agile organisations typically have three to four levels.
- Group interdependent functions – bring similar capabilities together.
- Think big and versatile – build accountable teams that can quickly pivot.
- Engage the ecosystem – turn old-school supply chain procurement into a collaborative partnership.
- Build Communities of Expertise – fluid cross-functional teams that can shift to act quickly on opportunities.
Knowing who you want to be is the first step, but to truly power the edges of the organisation, leaders must also ask who do we serve and how do we engage local communities.
To learn more about taking these next steps, download Powering the Edge.