As I watched the new reports of the disruption caused by the Icelandic volcano Eyjafjallajökull over the weekend, it struck me that there were lessons here for all businesses, not just the airline industry. The sudden and massive disruption to the airlines by forces outside man’s control, showed how powerless the companies were in the face of sudden change. All their contingency plans for terrorist strikes, industrial action, and fuel shortages were unable to cope with the one problem they had not considered; the complete shutdown of the airspace through which their planes have to fly.
While very few industries face the complete shutdown suffered by the airlines, the volcano’s ash cloud and the removal of the ability to fly has restricted all international businesses and the effect of this will be greater or lesser depending upon each company’s ability to react to a changed environment.
There are a number of aspects to this. Firstly, those companies who have embraced technology to support their communications processes, supplementing email with video conferencing, collaborative web-based document sharing etc., were in a position to change their processes and keep going. Meetings went ahead in cyberspace, presentations were given, and decisions were made without much of a hitch. On the other hand companies that don’t have the technology for a rapid response have had to abandon meetings and postpone those decisions with the resulting loss of productivity.
Secondly, even those who have the technology are hampered if their organisations and processes are too rigid to allow quick changes of plan when conditions change. Unless employees are given the freedom to react to circumstances, and take a ‘make it happen’ approach, they will be forced to wait until a formal directive comes from above. This is a slow process which will also drag on productivity.
Finally, unless employees are motivated to make the changes, they will sit back and let the delays happen, rather than thinking of solutions and making it happen despite the disruptions.
It showed me that an ability to respond to sudden changes is vital to all organisations if they are to survive. This is not just for ‘Acts of God’ such as volcano eruptions but, more importantly, to the more frequent sudden changes in the market. A new product from a rival, a new regulation brought in quickly by the authorities, or an abrupt change in consumer sentiment based on news stories can cause the market atmosphere to change as rapidly as the ionosphere changed last week when the unpronounceable volcano decided to make a bid for fame.
When this happens, an organisations ability to adjust, adapt and thrive will depend upon the level to which the employees are empowered to take action, the motivation level they have to take it, and the tools they have to support the change. This can be in particular short supply in the life and pension industries where caution is often the watchword and business processes can tend to be cast in stone. Even when there is the will, there is often not the way. Outdated technology can often hinder the ability to react quickly to market changes. Processes that take months to release new products are tolerated because no-one believes it is necessary to speed it up.
And yet, as the airlines found out last week, sometimes the unthinkable happens. Then, current plans are never enough. And those organisations which survive are the ones which have the attitude, people and tools to survive. The rest will be fossilised, as surely as the people in Pompeii who couldn’t react when their volcano erupted.