What next? How to strategically manage change in the adaptive era

Adaptive management – learning by doing

Traditional change management seeks to drive incremental step changes in how and what we do. Typically smothered by process, the focus is on leading people through a well thought out, structured journey aimed at reaching a predetermined target. This has its merits, and a place in the business playbook, but it’s time to relegate it to a past volume. It’s no longer the best approach.

When faced with great uncertainty, we have three options:- remove said uncertainty and proceed, proceed anyway and adjust as necessary, or do nothing. If we assume that option 1 is unrealistic, and option 3 is unacceptable, we’re left with only one option – take action, learn, and adapt – option 2. The very objective of adaptive management is to provide a framework that drives action now, despite uncertainty. The goal is not necessarily that predetermined target – at least not initially - it’s achieving incremental change. The idea is to take a small step, reflect, learn, adjust, and take another small step instead of large strides that may well lead you off course when dealing with moving targets. 

Adaptation goes past simply responding to disruptive events; it also means seeking out and seizing opportunities that are created by market forces. In practice, this involves the creation of a series of projects, which seek to develop and operationalise innovation, pivot to meet market forces, or otherwise improve business performance.

At times like this, it’s this sort of iterative decision making that should be the foundation of your strategic planning.

A shift of focus

Given the immense disruption that we’re all experiencing, professionally and personally, it’s natural to focus on only what’s in front of us right now. For the past weeks the party line has, understandably, been reactive, and focussed only on crisis management. But as we all settle into bubble-life - our new normal - we can’t afford to become complacent. Most organisations have, or are in the process of, stopping the leak. It’s now time to plot a course and set sail again.

So what does this all mean, practically? In the face of this – the most disruptive event in late modernity – doing more of the same is not an option. To survive, remain relevant, and succeed, businesses can ill afford to continue with business-as-usual strategies. As the dust settles, now is the time to take action and reset your organisational strategy. Our next state of normal will be very different, unrecognisable in areas, when compared to what we’re used to. This calls for an iterative process of action, learning, and adjustment, backed by a strategy that’s robust and fit-for-purpose.

Is your strategy up to scratch?

Disruption brings with it both challenge and possibility – how well placed are you to remain resilient while seizing opportunities as they arise? 

• Have you reset, or even reviewed, your strategy in light of the COVID-19 global pandemic?
• What does your next normal look like in contrast to your pre-pandemic world?
• Has your team shifted gear away from the here and now, toward the next normal and what that means for your business?
• Does your strategy allow for adaptation – is it structured to allow objectives to be achieved through an iterative process?
• Is your leadership team unified behind a common strategy?
• What does success look like - is your strategy built on an assumption that all objectives must be achieved to succeed; or does it encompass robust scenario planning? 
• Is your budget fully aligned with your strategy, and does it allow for funding to be redirected to allow you to adapt when necessary?
• What are your value drivers? Are these the foundation of your strategy?

What might our next normal look like?

It’s a bit of a cliché, but it seems that the only certainty at the moment, is uncertainty. With the fallout of the COVID-19 pandemic still playing out across the globe, there's much that we don’t yet know, and can’t yet see. With that context, the comments below are just some of the factors and influences that may play out in our next normal.

• Baby boom in early 2021
  Make what you will of this prediction.
   
• Re-prioritising of family
  With all this forced family time together in our bubbles, it’s reasonable to think that the experience may act as a catalyst for change and lead many to take lifestyle decisions that prioritise family – career changes, flexible working arrangements, etc. Significant events such as COVID-19 often lead people to make significant life choices. 
   
• A move (further) away from traditional retail experiences
  Footfall in brick and mortar stores has been in decline for many years – as a society, our preference is increasingly to seek out e-commerce solutions. We’re likely to see renewed vigour behind this trend as consumers re-evaluate their habits due to health concerns, movement restrictions, and the inconvenience of traditional models.
   
• Downsizing
  We’re likely to see many families take the decision to downsize in an attempt to sure-up cash flow and/or convert property equity into retirement funds.
   
• Temporary foreign workers
  With the unemployment rate on the rise, and our borders closed, our tourism, hospitality, and seasonal work sectors have become dependent on 250k temporary workers who won’t be here for the foreseeable future. This will ultimately present an opportunity for Kiwi workers over the short-to-medium term.
   
• Telecommuting and flexible working
  It’s been a fast adjustment, but there are benefits to employers and employees. Demand for CBD office space is likely to decrease, while we see a growing expectation among employees for more permanent remote/flexible working arrangements. Is this a possibility for you? Are you prepared? This may be your single biggest differentiator to attract staff when hiring increases.
   
• Net migration
  A net migration inflow of some 1,000 people per week will halt for the foreseeable future. The upside is that this may have a significant turnaround over the medium-to-longer term – with expat Kiwis choosing to return to little old, safe, stable, Aotearoa. We’re likely to see the same trend across foreign nationals too. We may see our highest population growth rates ever in 2-3 years.
   
• Retirement wealth
  As with the GFC, we are likely to see workers approaching retirement age staying in employment for the foreseeable future. Retirement wealth has taken steep losses over the past two months, the result will be a need to remain in employment longer than planned and save to fill the gap. We’re also likely to see debt-free equity converted into cash.
   
• Low interest rates and debt servicing costs
  Interest rates are at historic lows and are likely to remain there over the medium term.
   
• Regional housing demand
  Between downsizing and telecommuting, there’s potential for people to exit our major hubs and access a more affordable lifestyle in regional areas. On the flipside, weaker housing returns may drive speculative investors back to our main centres in a bid to find ‘safer’ investment options.
   
• Domestic travel spending
  We’re not spending on any overseas travel at the moment. That’s likely to be the case for a lot of 2020. While belts will be tightened across the country, people will slowly get out into our beautiful country and start spending overseas travel fund dollars on domestic experiences.

Information on this insight was last updated 09.04.2020