No matter how ardently an organization tries to anticipate them, surprises — from global economic turmoil to unforeseen upstart competitors — occur. What is of vital importance, however, is developing the capability to absorb shocks and maintain momentum without destabilizing the entire company.
Companies absorb shocks and retain their momentum when they have two elements in place. First, they focus on the end versus the means, and, second, they create intellectual buffers.
Mastering the End Versus Means. Achieving results in a permanently turbulent environment requires a focus on the end goal — and watching to see if it has shifted — as opposed to institutionalizing the one best way to get there. Focusing on the ends, not the means, is a compression capability that is common within the technology space. It is about homing in on the result or objective that is most critical to success and toeing the line there, because everything else may change as the environment shifts. When everything else is changing, that overarching end goal, along with an organization’s core values, remains the guiding light.
Intellectual Buffers, Not Physical Buffers. It is impossible to absorb the bumps and surprises that materialize without losing momentum when every last man, woman and personal computer is already operating at full capacity. How can companies run lean and still form fast and agile responses to bumps in the terrain? The best way to manage this dilemma is by replacing traditional physical buffers — inventory and slack resources — with intellectual buffers.
Intellectual buffers are ways that an organization can build up intangible advantages that lead to better decision making: management innovation, creative ideation, more effective communication and smarter strategic thinking. This is achieved when companies can effectively leverage people at the same time that they bring better technology and communications to bear.
Active Think Tanks: A common type of intellectual buffer, active think tanks are a brain trust of functional specialists — people from both senior and junior ranks — who conduct a type of scenario planning. They meet regularly, often informally, to discuss what moves to make if various future events come to pass. More specifically, they consider implications and suggest responses to disruption before anything actually occurs. They look at resources to develop, markets to target, and they monitor the wider industry environment.
Active think tanks overlap and work in tandem with an organization’s regular management team — which, in balance, may be too occupied driving the current strategy to speculate about future events and appropriate organizational responses. As a result of this type of intellectual buffer, when “surprise” events do materialize, a company is much quicker to respond because they have proposals and first-response scenarios at the ready.
Managing for the end result (compression) and building intellectual buffers (expansion) are two ways that organizations can absorb bumps in the road without sacrificing momentum. As with the other shock absorbers, this one, too, depends upon the judgment of managers. It is the manager's judgment around when to compress and when to expand that makes all the difference