The rules of the game are changing

Friday, January 20, 2017

AME Author, President, Fulcrum ConsultingWorks,

When it’s my game, my field and my rules, my team will win. But when the game must be played, the field is shared by all, and each team gets to decide its own rules, my victory is much less assured.

NAFTA obliterated. Large tariffs on imports of finished goods, materials, and components. TPP stopped dead in its tracks. Changes to work visa regulations. And then there’s the economic responses of impacted countries to those new policies to consider. After all, they get to determine their own rules.

None of this may actually come to pass, but the responsible operations executive must be prepared to continue profitable excellent performance in the face of a changing game.

Let’s consider a few important questions:

1. How are the factors of effective leadership impacted?

  • Good leaders have the confidence of their workforce, customers, suppliers, investors and community. That confidence may become harder to earn in the face of increasing uncertainty, but its importance remains.
  • Good leaders have developed true teams – people who win and lose together and focus on organizational rather than individual success. Again, the uncertainty may make retaining that team environment in international teams more difficult, but its importance hasn’t changed.

2. How is the strategic vision impacted?

  • There are two aspects of strategic vision: content and implementation. If your vision is long term, these policy changes, which may be continued or overturned by the next president, impact implementation much more than content.
  • Implementation of strategic vision is more impacted by clear prioritization than by external factors. Consider the Center for Disease Control (CDC). Its mission doesn’t change regardless of elections, decisions by other governments, or socio-economic challenges. Its priorities may well be, but not its vision. The same is true for most of your organizations.

3. How is supply chain management impacted?

  • It is quite possible that changing economics and time factors will necessitate reassessment of your supply chain, including make-buy decisions made previously. Those reassessments should occur frequently regardless. The basics of supply chain management that operational excellence requires won’t change.
  • Great companies will continue to design the supply chain to manage costs and risks, and support revenue growth. They will continue to stress test all key suppliers to ensure understanding of inherent risks and develop appropriate contingency plans.

4. How is competitive advantage impacted?

  • If yours is an organization that sells commodities based totally on price, you may well feel victim of the ancient Chinese curse “may you live in interesting times.” But truly operationally excellent companies have ensured that all their products and services have a market-verified distinction of value. Price is secondary, at most.
  • The best companies can say “Our customers have verified with us how we increase their competitive advantage in their markets.”  And that is the basis of true competitive advantage.

While this transition from one president to another may bring more obvious disruption to our business worlds than prior ones, it is still the peaceful transition of a democracy.

Continue to make progress with the rules that haven’t changed, and will not. The fundamentals still apply. The rules of international trade may indeed change, but the importance of leadership, teams, people, strategy, and effective supply chain management will remain. So too will the consequence of effective problem-solving, harnessing the power of data, and embracing technology for the right reasons.

With problems come opportunity. Grab the opportunities before us now.