Here’s How to Overcome Pitfalls in Operating Models

A business usually prepares for standard operating procedures by considering predicted risk factors. The operating models are designed while keeping in mind the risk factors and market uncertainties and defining ways to deal with the residual risks.

However, in case of unpredictable pitfalls arising from unexpected and extreme scenarios, the planning and management methods prove inadequate to overcome such magnitude.

When an organization finds itself amid such extremes, it realizes its unpreparedness to deal with the situation. Thus, it risks the erasure of the business proceedings.

Businesses worldwide faced such extreme uncertainty fuelled by the health and economic devastation caused by the COVID-19 pandemic. In the recent past, it has been one of the most devastating catastrophes to cause unprecedented repercussions on human life and livelihood.

Thus, it has become imperative for the management of businesses to have organizational models to sustain them under such circumstances. That’s where GrowthJockey comes in. Since the magnitude of uncertainties that companies face is variable, GrowthJockey helps companies create operational models that are dynamic and enable continuous learning.

Therefore, Growth Jockey ensures that the new operating models respond quickly to the crisis and helps companies be prepared to sustain the business for an extended crisis period.

The leaders must design a strong foundation for this operating model and test it to see how to overcome pitfalls.

COVID-19 Aftermath and the Need to Understand the Scale of Uncertainties

COVID-19 has left the world reeling from an economic recession, causing problems for the most influential and big companies worldwide. People are still processing how the pandemic has affected health, public policies, and customer behaviour, along with the havoc it caused on the economies worldwide.

The tremendous effect of the pandemic on the world economy could be felt in the International Monetary Fund's (IMF) prediction about the growth of some economies.

While the IMF predicted a positive growth rate for many leading economies at the start of 2020, their estimations reversed and showed drastic negative impacts and predicted negative GDP rates.

Many economic forecasters predicted a global economy shrink at -4.4% in 2020, against the 2.8% growth estimated in 2019.

The world has faced many economic crises in the past, which have proven detrimental to the survival and existence of organizations- from the 2008-09 depression, natural disasters, and epidemics, they have affected local areas and not the entirety of the world.

Therefore, seeing the magnitude of the crisis, many businesses face an existential dilemma and struggle to survive in the economy. While this existential question arises due to the pandemic, it is also contributed by other factors.

These factors affecting the company's operation may include faulty planning, cyber breaches, and financial disposition.

Failures Occurring in the Operating Model

While a significant crisis like the pandemic is rare, the existential crisis for many organizations is genuine. Therefore, most operational models focus on dealing with such aspects and designing an operating model that can pull through such uncertainty.

There are some challenges in operating model design, especially given its annual nature. That’s why, instead of what most companies do, Growth Jockey helps companies design operational models for growth, while leaving so much space for changes, additions, and subtractions.

The managers responsible for preparing the operating model state the budgets, strategies, and plans once a year and then conduct the business following these predetermined goals and aims. One thing to learn from the pandemic is the inapplicability of limited operating principles. It has also made the management question the entire planning and designing process. Managers have realized that the operating models they follow could be improved in some ways.

Thus, businesses are okay with trying and testing specific operational models to arrive at the one that best suits their goals and is well prepared for sustenance during an unexpected crisis.

Growth Jockey realises the importance of flexibility, collective action and therefore provides quick solutions to deal with the company’s problems.

How to Overcome Challenges in Operating Model?

To overcome pitfalls in operating models, GrowthJockey ensures that the model holds ground in unexpected crises.

Post-COVID-19, it is beneficial if the managers doubt their thought processes and collaborate to challenge their assumptions. Thus, managers should avoid making the following assumptions and falling into a pattern.

1. Avoid relying on Assumptions.

In business proceedings, it is best to refrain from vouching for optimism in a post-pandemic scenario. As the world has not faced such a catastrophic event in a long while, the managers may be optimistic about the bounce back.

It is prevalent and easy to fall into the trappings of optimism and believing that the business will bounce back to a predetermined and predicted state with the nature of the uncertainty.

If the managers do not believe in the severity of the situation, they will plan for a milder aftermath and create an existential risk for the organisation.

2. Limit Reliance on Information

In most cases, managers rely on external information to determine the internal workings. However, the pandemic has created a chaotic situation with claims, an ever evolving health care system, symptoms, testing and preventive measures.

Similarly, there may be varying data available, making it difficult to make accurate observations and predictions based on them.

Growth Jockey always ensures that there is a wiggle room that will allow the company to make additional changes to the operational models as and when needed.

3. Wrong Answer

With the unreliability of information, there is also a possibility that what you consider a reliable source of information may not be so. One cannot take these assumptions as facts and should be open to going back to revise them and make them a continuous process.

The operating model must accommodate the wrong answers and be ready to overcome them.

4. Exhaustion caused Extended Instability.

The greater the magnitude of the unexpected crisis, the more time it will take for the economy and its associated sectors to arrive at a stable juncture. It may take businesses months or even years to regain normalcy in operation.

Once the organization falls into the pitfall of mundane and never-ending change, the employees and managers will fall into exhaustion. It will affect the managers' cognitive and physical capacity and the operational model's working and designing.

Designing a Suitable Organizational Structure

First and foremost, managers should be able to estimate the magnitude and duration of an unexpected crisis. When such a crisis hits, it is vital to activate the "crisis mode" in the organization to avert some of the most significant repercussions.

The next step is to move on to an operating model which would sustain the organization from the ongoing crisis for a considerable duration. GrowthJockey designs the models in a way that ensures the company's existence in the upcoming months or years.

Some of the fundamental features of the response model include the following:

• Designing an Early Warning System

The top executives must design an operating system that effectively detects the trigger and pressure points in the socio, economic, political, and environmental climate, which could lead to an unexpected crisis.

• Maintaining Transparency in Operating Model

Another necessary means of averting crises is maintaining transparency while designing the operating model. The organization's top brass must define the company's measures and principles governing crisis management.

These principles will help managers make crucial decisions during an unexpected crisis. At the same time, they become a standard against which managers can weigh their decisions.

In Conclusion

Understanding the severity of the unexpected crisis is related to its changing pace, magnitude, uncertainty, and duration is essential. Therefore, organizations must prefer a leadership that can accommodate such dynamic aspects of the crisis and design operational models to help the business sustain itself in the unforgiving economy.

GrowthJockey helps businesses grow in every aspect, including operations, by facilitating the creation of strategies, procedures, and the correct execution framework.

With GrowthJockey's understanding of business ideas and drive toward providing innovative solutions, your company can design an ideal operating model to overcome the crisis and thrive in an ever-changing environment.

At GrowthJockey, we are fully committed to developing customised operating models that effectively address the critical challenges faced by our clients across various industries. Irrespective of your company's size, whether it's a small-scale enterprise or a large corporation, you can now benefit from our tailored solutions.
Take the decisive step towards unlocking the next level of growth for your brand by reaching out to us today!