I recently attended 2 events that left me thinking that there is latent agility in SMEs; one hosted by a small service provider for manufacturing SMEs, another by PWC, on the use of virtual reality in manufacturing. The latter presented research that the manufacturing sector was growing by only 1% in the UK. They attributed this to 6 reasons – which I will share when I get a copy of the deck (terrible memory)
Surprisingly for me they were exactly the same reasons that were plain in the SME event, related to lack of agility and resistance to change. Surely the SME market was not exhibiting the same traits as its bigger enterprise counterparts in the supply chain, was it?
Over years of dealings with large enterprise organisations had I perhaps misunderstood that smaller businesses were infinitely more agile and responsive than their bigger brothers? Why did this not appear to be the case? Or was this assumption reserved only to start-up rather than SMEs at large?
I have some first thoughts on why that latent agility exists
SMEs can be too focused on achieving. They delegate too much responsibility to suppliers. The implications being that they do not stand back and ask what should we be doing rather than what are we doing.
When a business says, 'we do it this way, can you handle that?' Suppliers are all too keen to say ‘yes, we can do that, it’ll cost you £xx because we'll have to customise some things’.
Selling customised solutions is 'sticky'. Whilst [initially] it may appear good since organisations do not need to change processes. Support and upgrades can soon become expensive, and migration away from the custom solution even more so. Ultimately it removes potential for real improvement and exacerbates latent agility but preventing budget from a money pit that is the status quo to initiatives that can move your business forward.
Use an external consultant with an objective viewpoint to perform due diligence. They can help you;
Everyone knows Jack. Jack is they guy who knows how it works, and he knows what to do to make it do that thing that you need it to do. We’ll go ask Jack and it will get done.
But being beholden to a single point of expertise means modifications to the system are slow since there is a bottleneck in getting things done. Your business cannot be nimble if it is constantly waiting for work to pass through a bottleneck it slows down the entire machine that is your business, the epitome of latent agility. Jack is in high demand, and often this can’t be seen without looking at your business with the eyes of an ‘outsider’, and Jack has valuable information that he can take with him to other places of work, be they your competition or otherwise.
Worse still there might be Diane, who also knows how to get stuff done. Sometimes it's even the same stuff. Now you have 2 areas of the business doing the same thing in 2 different ways.
Make sure you do not have a Jack, or Diane, in your organisation otherwise you will waste time in discovering what you should already know. And uncovering inefficiencies that are hard to remediate. Ensure that knowledge is shared, not only in documentation but in practice.
Have a succession plan in place, and recognise that Jack and Diane could also be a suppliers.
There is no desire adopt new technology. Less than 50% of the SMEs are actively looking to move to cloud or exploring new technology that will make them more agile. This could be due to a number of factors. But stem from lack of understanding;
There is little knowledge within the company of how existing capabilities can technically be moved to other platforms, be that IaaS, PaaS or SaaS. [Possibly because Jack hasn’t had time to look at it yet because he’s inundated by his backlog].
There is little incentive for incumbent suppliers to move to the cloud – especially if they have no offering there – they have a vested interest in the status quo, and the cash-cow that customisation provides.
It is also assumed that data privacy is covered if data only exists within the confines of the internal network. The implications of cloud are seen as too complex to even contemplate. Data sovereignty and other data governance concerns are avoided, ostrich-like. Then there are the intricacies of cost.
Talk to other companies, even competitors, who have made similar bold decisions. Work with those who specialise in new technology, particularly those that provide [on-the-job] training as part of their remit.
There is predominance of technology that gives an illusion of control, but it can also thwart progress. Well-meaning staff are subverting processes that are over restrictive. This provides a false view of process efficiency and your ability to choose the right tools as a result. Process discovery can only be based on the real process, not the documented one.
Restricting access to Facebook as an example is wasted expenditure on technology. The fact that it is perceived to be unproductive is not the same as it being a security concern. Staff will circumvent this restriction by using their phones anyway. If people are using those same phones to work around other restrictions that are part of the business process, then you have a real problem.
Which would you choose;
Security of your, and your clients data is, or should be, of paramount concern to you, speak to experts who can keep your data as secure as it can be whilst keeping your employees happy by making security as frictionless as possible, turning what could be real cause of latent agility into a positive experience for your workforce. Train your staff on the reasons why things are the way they are, and the implications of not following the rules. Above all, trust them…until its time not to
Things break…so 1. Understand the potential impact and 2. Have a plan.
Resistance to change is often due to the fear that you’ll break something. If it ain’t broke then don’t fix it is the mantra of laggards. Doing nothing because of fear is the biggest single cause of latent agility. Lack of any movement is by definition not agile, or anything else for that matter. Things NEED to change all the time, even if only to stay still.
This is Business As Usual (BAU) stuff, if you’re not doing it then why not.
Building confidence with BAU change is an important step in being able to introduce new, innovative change. With new change, whether it be the integration of a new business through M&A, or the introduction of a new technology, the impact needs to be known so that it isn’t a surprise. Ensure that you have engaged someone with a broad level architectural perspective whether they are from inside, or external to your business. They will be able to let you know the order that things can be achieved and what dependencies there are, creating a malleable roadmap for various stages of any initiative, that incorporates BAU change with new change.
What is critical in both cases is the ability to recover your operations if a change goes bad. If you can do this then recovery after a serious failure, corruption or breach is just a variation on a theme. But this capability is critical to the health of your business.
Don’t do anything without a proven recovery plan, and make it part of your operating principles, and make sure your suppliers aware.
The last thing you want is to leave the responsibility of patching an upgrades to a supplier, where each party assumes the other has recoverability covered.
The backup plan for components coalesces into a disaster recovery plan for all technology services. But business continuity relies on people, and paper. Disasters are typically not short-term events, the business needs to be able to function. What are the critical systems that need to be restored first, what are the pieces of information that need to be available to whom, and who is responsible for doing what, and who needs to be informed.
Test it…regularly, not just at ‘go-live’. Wargame breach and failure scenarios. Make it routine