Learning to deal with complexity and uncertainty
7 November 2022
Economic and Human Sustainability in the Supply Chain. Is digitization enough?
9 February 2023
A few years ago, I had the honor of working for a large Italian company that was very well-known and constantly growing.
The project aimed to improve the innovation generation system.
In the early stages of the project, we found ourselves in a paradoxical situation of tension over the concept of whether or not to be an “innovative company.”
They were very convinced that they were. I would ask them to prove it to me with facts and figures. They responded promptly with turnovers, growth figures and geographic expansion.
Size growth is certainly a condition that tells a lot about a company’s ability to do business. And in several cases it can also be associated with bringing innovative products and services to market. But it is not enough. Especially in times of great uncertainty.
To overcome the momentary stalemate due to quasi-ideological positions, I asked them to produce a table with a list of top products by associating them with two key pieces of information: gross profit collected and the year that product was first introduced to the market.
The result of this analysis?
The company prospered and made most of its profits from a few products launched more than two decades earlier. The fact that they introduced many revisions and several carry-overs (range extensions) of those few successful products provided them with the “feel” of being innovative.
Having generated and brought to market hundreds of other products in the past decade gave them the “feeling” of being hard-working innovators.
Too bad that the sum of the profits of these hundreds of other products could not even be compared with the values of the best sellers.
What are the two engines of business growth?
1-The engine of current business
This engine fosters and develops incremental growth.
Its functions are clear: it must ensure the management and continuous improvement of current products and services, continually adapting them to new market and company needs, and improving and making the design, development, production, and sales systems more efficient.
Can this engine alone be enough to keep our businesses alive in times of uncertainty or even grow them?
A “technological” comparison: Tesla introduced the Dual-Motor concept in 2014. How does Dual-Motor work and why is it useful?
This technology enables a car with an electric motor on each axle, which digitally and independently controls torque to the front and rear wheels. The result, according to the manufacturer and according to numerous owner reviews, is unprecedented traction control with instant response and gives the customer precisely controlled performance in all conditions.
Just as Dual-Motor technology helps the car respond best in all conditions, the company must also be ready for external stresses-and uncertain to the driver-with the second motor useful for growth.
2-The engine of high-impact innovation.
This important engine fosters and develops radical business change and growth. It is the engine that has to think about the future of the company in discontinuous terms from what has been done so far.
Products, services, business models, technologies, and organizational arrangements that can significantly grow the company and not necessarily on the same path traveled so far.
Unfortunately, many companies today are “asymmetrical.” They do not have a structural balance between the two engines needed to keep them alive in the age of uncertainty.
In my latest book, “Management in the Age of Uncertainty,” I explore managerial strategies for being more flexible in every part of the company in such a complex, uncertain and variable period as the one we are living in.
Practical insights and strategies to make the company more compact and strong, to make better decisions, to innovate and experiment with greater market impact, and to better manage personal and business change.
