Adaptive capability and making a drama out of a crisis.

The complexity of today’s business environment frequently means we fail to make connections which may improve our organisations resilience by creating adaptive capability. A personal incident however often throws these connections into sharper relief allowing us to re-examine them in a different light. Last week our boiler at home failed its annual service, for some this would spell disaster, perhaps sadly for me, it was an opportunity to think about adaptive capacity.

Creating the right sort of capability

The boiler in question supplies both the hot water and heating to our home and in Scotland both elements are still very much in demand in April. So how was the impending disaster averted? A mix of measures turned the failure into an inconvenience;

• Being aware of the boilers inherent complexity and our reliance on it, meant we had a full parts and service contract already in place with a specialist provider.
• We had alternative means of heating via newly refurbished open fireplace and freestanding electric heaters.
• We were able to use the shower in a neighbouring property.
• Our dishwasher uses a cold feed water supply, and our kitchen utensils are all dishwasher proof.

All of these measures meant we had built in adaptive capacity to an essential service. So when we were told that the relevant parts were on order and could be fitted within a day or two, it was no great drama. Each of these measures has a cost which needs to be weighed carefully, but if put in place in advance is frequently insignificant and brings other benefits. By getting the boiler serviced annually it reduces my fuel bills, having an open fireplace means in extremis we can go ‘off-grid’ entirely and reduces the size of heating system we need for really cold weather saving the capex of a larger system. By knowing our neighbours it was easy to ask to take a shower prior to my client meeting and by making smart purchase decisions on kitchen utensils as they were renewed I no longer need to spend time at the sink!

But surely this can’t work in organisations?

Or can it? Now I started thinking of examples of how you can include the right adaptive capabilities into any organisation and indeed create some new opportunities.

• Creating or using a product-as-a-service rather than a traditional purchase or lease model. Rolls Royce has created a new business model which provides aircraft engine use as a service rather than purchase as a commodity by providing maintenance, energy efficiency and replacement parts much the same way as my boiler for what is a vastly more complex machine.
• Diversifying of supply chain partnerships or reconfigurable production methods using agile manufacturing techniques used by Benetton and Primark. These give the ability to respond more effectively to disruption and more importantly customer demands for the latest trend or value added bespoke product lines.
• Mutual support agreements such as overhead power line workers in the power sector to allow response to an extreme event or via intermediaries such as trade associations. Often trade associations give advance warning of disruption as they see a broader picture of markets and provide a non-adversarial forum. One conversation I had with a competitor at my trade association was around a problem they were experiencing with materials behaviour following formulation changes due to legislative changes which banned lead in electrical components in the UK.
• Consider how to configure teams, departments and operating units to allow for islanding during disruption, where they know the objectives and carry on independently while the new ‘normal’ is established. This mission command or Auftragstaktik approach created by the Prussians is still used by the military today especially special forces and by the retailer Walmart in response to Hurricane Katrina described in the Checklist Manifesto by Atul Gwande.

Prior preparation of adaptive capability is the key takeaway.

What is clear to me is that to prevent disruption becoming a crisis, prior preparation is required to build adaptive capability. It’s not just a narrow view but one that covers all aspects of an organisation and its operating environment, and its likely to be a combination of approaches. Resilience is all about preparing for unknown disruptions and creating opportunities from them. I certainly expect to see more organisations take resilience thinking into their strategic planning by actively making choices and not be forced into ineffective and costly kneejerk responses. Those businesses that ignore it are less likely to survive while those who embrace it will create new competitive advantage.

Further Reading;

https://www.rolls-royce.com/products-and-services/civil-aerospace/aftermarket-services.aspx#/

https://www.mckinsey.com/practice-clients/operations/agile-manufacturing

Gwande, A., 2011. The Checklist Manifesto. Profile.

The author, Paul Hancock is a Resilience Consultant at 360 Resilience Ltd.   360resilience.com