Cambridge Management Consulting
Keeping business strong in difficult times
21 April 2020 | Dave Ambrose
Dave Ambrose, partner for innovation at Cambridge Management Consulting, explains why business continuity planning must now consider extreme scenarios and how businesses can adapt to a new normal
Many firms were caught off-guard when half the world was sent to work from home a few weeks ago. What were the main lessons that companies and service providers need to learn?
Covid-19 restrictions hit most companies harder than expected and many continuity plans didn’t cope well with the huge increase in customer demand and work force disruption. It is likely that most companies never tested their continuity plans at scale or with scenarios as extreme as those we are seeing.
Many large organisations really struggled to service their customers. Supermarket home deliveries have been hit hard. This was compounded by signing up hundreds of thousands of new customers in a short time, placing additional pressure on other business processes. This problem was not unique to them. There were major issues trying to contact insurance and travel companies too.
The unprecedented pressure may have exposed strategic decision-making weaknesses in some companies. I wonder if better predictions of the negative impacts could have been made, so that customer expectations could be proactively managed and the pressure on pinch points controlled to give the supply chain and home working capabilities a bit more time to improve.
Also, the scale up problem may have exposed customer insight and personalisation information weaknesses in some companies. It took a long time for supermarket home deliveries to adapt and offer priority services to those in most need.
How do business continuity plans and business models need to evolve to cope with pandemic type interruptions?
Continuity planning and some business processes need to evolve. Web sites crashing or being taken off line, asking customers to not get in touch, 100,000+ people ahead of you in a virtual queue or spending hours on the phone and then being disconnected are clearly undesirable situations for the customers and businesses. There may be long lasting impacts on brand loyalty.
Continuity planning needs to consider more extreme conditions. That includes huge increases in customer demand, reductions in employee resource, capabilities that might be debilitated by working from home etc, or in the worse case a business that can no longer operate because of policy, health or safety decisions.
They need to consider how quickly infrastructure/service capacity can be flexed up or down. Is there adequate load balancing and redirection services to cope with extreme demand? Can you identify which customers quality for a priority service and then filter their traffic or transactions appropriately? Can you manage demand by proactively contacting customers with the right information to reduce incoming contacts? And for contacts that need to come in, do you have an adequate capacity to cope at a time when your work force may be reduced? If not, think about how you can deflect some of these contacts to self service and still meet customer expectations.
If you are a really smart business, you will want to exceed customer expectations during continuity situations so that you really stand out. This can include innovating your way out of the problem to offer a new service or product. It’s not all about continuing to offer an existing service in challenging conditions.
What role does technology play, in particular new technologies, in helping businesses to adapt to major events like pandemics?
If you don’t have a flexible, scalable and resilient technology stack then you are going to find surviving, let alone adapting and thriving, extremely difficult. Don’t forget as well that resilience includes protecting information. With most of your workforce at home, are you confident that you have appropriate technical controls and cyber security education in place?
Inevitably business processes that are heavily dependent on people are going to suffer in conditions where those people are unavailable, or their capability is degraded. The good news is that there are numerous automation technologies emerging that are easier to deploy and more affordable. They can’t solve every problem, but if you can improve the amount of automation then your business may be more resilient to large shocks.
One area is AI backed automation, specifically solutions that use natural language processing, intent recognition and machine learning to partially or fully automate processes. This is not the type of robotic process automation that moves a person through a series of screens faster. It’s the ability to replicate decision making within controlled conditions and to continuously learn and improve performance.
I am seeing several promising solutions that automate or improve human efficiency in the contact centre space. They may handle inbound or outbound contact, are often multi channel (web, call, email etc) and multi-lingual. The solutions that I like most use supervised machine learning and knowledge bases to service customer needs. This has the added advantage of capturing business knowledge that often exists only in employee’s heads. This is very valuable if your contact centre has high agent churn rates.
How do you think the business world will differ when Covid-19 restrictions are lifted?
I think the biggest change will be the expectation from employees to have more working flexibility. Many people will have adapted to working from home, and even if there’s room for more improvement, they will expect to be able to keep some or all of this new freedom.
So some businesses will need to adapt. They will have to review their operating models, collaboration and information security tools and how they manage a more remote workforce on a formal and permanent basis. If you haven’t done this before and at scale, there’s lots to consider. How do you ensure employee wellbeing, health and safety, maintain engagement and performance? In some cases remote working leads to more creativity and innovation, but is your organisation ready to nurture this? Are you a command and control organisation or manager or someone who is comfortable with leading an autonomous team? The leadership skills required are very different.
Assuming we get a much larger home working population, I think it will challenge some of the decisions recently made by large companies who are pursuing large scale, face to face, co-located agile development initiatives. How you run agile development seems to be a bit religious to me, with some people insisting that it has to be done face to face, all of the time. If this tension can’t be resolved, then we may see more employee fluidity between companies.
Pandemics and similar large-scale disasters place huge constraints on companies. What examples have you seen of businesses adapting or succeeding?
There are some obvious examples of large engineering companies using capabilities to deliver different products. For example, aerospace, motor manufacturers and F1 teams combining to improve the production process of ventilators, fashion houses offering to make scrubs, food wholesalers moving into B2C etc. These are great initiatives but too surprising.
What has impressed me more is the increased level of innovation from smaller groups of people or individuals, so not necessarily company based. This includes people designing cheap positive pressure respirators, sharing designs for PPE face vizors and manufacturing them at home. The latter is really interesting because we are seeing lots of people using 3D printers and laser cutters to make face shields. They are sometimes crowdfunding materials. They are coordinating efforts and solving logistical issues to get equipment to where it is needed. They are doing this without government intervention. I remember 10 or 15 years ago listening to a lecture at MIT about the rise of citizen manufacturing and I am wondering if what we are seeing now is the start of that. It’s remarkable and these people deserve to be recognised.
The thing about constraints is that it drives innovation. At Cambridge Management Consulting, we are actively pursuing some very exciting initiatives that I don’t think we would have considered right now if the world wasn’t seeing the current level of disruption. Like many other companies that are having to adapt, I think that some good will come out of this pandemic.
Dave Ambrose partner for Innovation at Cambridge Management Consulting
Dave Ambrose holds thirty years’ FinTech experience gained in large banking and insurance organisations. He explored many emerging technologies, such as AI, blockchain, biometrics and IoT and, as head of innovation at Lloyds Banking Group pioneered crowdsourcing and evidence-based decisions to drive innovation.