Last week, we took a look at how decisions around capacity are critical in ensuring scale up success - The 7Cs for Successful Scale Up: Part 1 - Capacity
This week, we’re looking in more detail at the role of Culture, Capability and Collaboration, which all need to align if you’re to ensure your growth ambitions.
Planning for a scale up can seem a largely analytical exercise. It many aspects it is but at the core of excellent supply chain design are people. What skills and capabilities got the business to this stage, along with its culture and way of working, may not be what gets it to the next level.
The culture of an organisation can define it and its competitive advantage. Values and beliefs shape actions and decisions. With expansion, it cannot simply be assumed that what works now will work in the future and at scale. New operations and sites mean new employees and potentially different cultural norms. The due diligence applied to planning new assembly lines, factories, distribution centres should be matched in planning the organisational design, roles and responsibilities, performance measures and incentives. Leadership will be pivotal to change and may well need to adapt whilst seeking to maintain the central ethos of the business. Due thought should be given to:
-how trust is displayed and re-enforced across extended reporting lines
-how freedom to make decisions in the moment is coupled with responsibility
-what support is given whilst challenge offered
-how local leadership teams are formed and integrated into the business.
Operating in different countries brings further challenges. It is trite to say there are cultural differences between countries but there are also notable variations in sub-regions; just consider New York and New Orleans. It pays to be alert to:
-what may seem implicit in communication in one culture or location may not travel well
-what is common knowledge in one location probably isn’t elsewhere
-fault lines that could appear; ‘them and us’ develops all too easily
-corporate culture that could conflict with local norms.
Just as in capacity planning, a systematic approach can help:
-review potential points of difference; is decision making consensual or hierarchical? Is flexibility more valuable than procedural adherence? how is feedback shared?
-define your essential cultural ‘DNA’ where corporate values and ways of working need to overcome local tendencies
-ensure communication is well-defined and go that extra mile to make it explicit
-facilitate engagement; make sure all voices are heard and that people can prepare their input
-train, train, train; where particular values and ways of working are imperative, make sure training is delivered both at the outset and ongoing to engender key cultural norms
-create a diverse team that can draw on different skills and perspectives.
If culture is an afterthought, both internally and even more critically with customers and suppliers, then no technical masterpiece of operations design will save the business from struggle and potential failure.
Operating on a different scale asks new questions of people. Managing projects to develop new operations calls for skills in planning, communication, organisation, negotiation and problem-solving to name a few; combining these demands with running day to day operations can often be a very tall order. That said, it is a common fallacy that people in current roles cannot develop as the operation grows. A good starting point is to review capabilities with a structured competency framework; this will not only highlight any critical gaps, it can also set motivating development paths. The main supply chain management processes should form the core with essential skillsets for the context of the business and its market completing a framework to support objective judgements. It is less about the fine detail of all aspects of the current and planned operation but more about ensuring critical thought has been applied to the skills and capabilities needed of the team in a new operating context.
For some gaps, a good option may be to introduce consultancy and/or interim management support. More flexible working arrangements can certainly mean that expertise and particular skillsets can be called upon as needed.
As operations grow, leaders need to adapt. If there is one thing that can stall growth and inhibit the scaling up of operations, it is the behaviour and approach of leaders in the business. The more operational decisions leaders need to be involved in, the deeper they get involved, the more tasks they handle themselves, the greater the drag on scalability. Think about your personal workload; are you close to 100% time utilisation? If so, then anything that depends on you for a decision waits in a queue and wasted time rises exponentially. Combining a good understanding of capabilities in the organisation with clear roles and responsibilities should allow clear sighted delegation and make for an effective growth phase.
Identifying the role of the new sites was mentioned earlier. As part of planning the location of new operations, looking for clusters of similar, like-minded companies could be an effective option when scaling up. Access to relevant skilled labour pools, networks of suppliers and potentially supporting infrastructure for inbound and outbound logistics can have an important bearing on speed of growth and the potential for collaboration.
The types of relationship in the supply network reflect the strategy of the business, its ‘posture’ to collaboration and the dynamics of the market sector. Decisions around what activities are performed in-house and those outsourced should be reviewed as part of planning growth. Those activities deemed critical to the competitive advantage of the business are likely to be performed by the expanding operation but, should it be feasible, some outsourcing of activities can mitigate risk and maintain flexibility in volumes and associated costs. Some aspects to consider and assess if a modular approach is effective could include:
-component consolidation and sub-assembly
-final product configuration
-warehousing and distribution
Working in partnership with suppliers can offer significant benefits generally and certainly during operational development. Discussions should explore how:
-flexible responses to demand can be supported
-joint problem-solving could operate
-local knowledge can be shared, especially when expanding to new markets
-benefits from new ways of working can be secured.
The analysis outlined for planning capacity can be enhanced with a renewed perspective on collaboration across the supply chain. Applying a design thinking mindset can help to create options and test ideas; those that pass can add to the decision tree to aid growth planning.
Whilst it is a whole subject on its own, taking a sustainable approach to design, and supply chains in particular, should add a critical dimension to scale up planning. Industrial symbiosis as is defined as ‘the process by which wastes, or by-products of an industry or industrial process, become the raw materials for another’. Applying a sustainable lens can add to the identification of collaboration opportunities and the potential location clusters in new geographies.
Next week, in the final part of our blog series on Scaling Up for Success, we’ll be looking at Complexity, Costs and Capital and how they can affect your business in a time of growth.