The COVID-19 pandemic has sped up the adoption of key trends over the last decade: moves towards a better work/life balance, a digital transformation, an increase in “doing good” with emphasis on diversity, equity and inclusion, and corporate social responsibility… the list goes on.

It has also shifted the way businesses operate and plan. A recent study by IBM found that business agility and cash management are the top two priorities for Executives for the next two years (2020 – 2022).

As a finance leader, this makes a lot of sense – it’s imperative that all areas of a business be lean and nimble in the way they operate. The need for operational agility and effective cash management strategies is never more important than when conditions are uncertain – and the last two years have been nothing if not uncertain.

But, what does ‘agility’ really mean for a business?

Aaron de Smet, a Principal and organizational design specialist at McKinsey defines agility as “the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment.”

We always hear about the importance of having an agile engineering team – one that’s able to quickly iterate, test, gather feedback, and repeat that process often.

When your business is agile, you’re able to absorb the increase in demand with very little shock to your operations.

Why is it important to be agile?

If 2020 and 2021 have taught business leaders anything, it’s that the future is unknowable. We can’t possibly predict what will happen, so we must expect that something will and it is the responsibility of the corporate stewards to be prepared for anything.

While it’s still too early to know which companies are the big winners and losers from the pandemic, one thing is clear: those that were able to adapt quickly – offer their customers new ways to shop and pick up their items, transition to a remote-only workforce model with limited impact on the customer experience, and make these rapid changes while keeping their employees feeling valued, engaged, and secure – were able to get a leg up on their competition and can capitalize on that customer goodwill.

In short, to be caught flat-footed and unable to react with haste and efficiency is to be left behind.

It’s clear that it’s important to take a nimble and proactive approach to business operations. For executives, there are 3 key areas in the operating model that determine how agile an organization will be: structure, process, and people.

It’s clear that it’s important to take a nimble and proactive approach to business operations. For executives, there are 3 key areas in the operating model that determine how agile an organization will be: structure, process, and people.

Structure

Structure includes the way an organization is set up and the hierarchy therein, but it also includes the way decision making is handled. For a business to be able to adapt and react quickly, it must embrace decentralized decision-making.

The key idea behind decentralized decision making is giving authority and responsibility to those who know best — since they’re closer to stakeholders and have relevant information available to them. In order for this approach to be successful, the handoff and mandate for on-the-ground decision making must be clear and well-articulated; attempts to implement an approach like this without explicitly making it clear to the entire organization will fail.

The benefit, however, of taking this approach is massive. Organizations that adopt an agile operating model make decisions 5-10x faster than those that are crippled with bureaucracy.

Processes

Processes are the activities that, when you string them together in a particular way, add value.  One of the ways business leaders can impact the development of processes in their business is to set the framework for how decisions along that process are made.

Executives should identify the key metrics in a process and make sure all the different functions, business units, or geographies that are touching that decision or activity share the same metrics and targets. This helps immensely with collaboration across business silos or verticals.

I write this knowing that it’s a simple thing to say; it’s not an easy thing to do.

The issue is overcoming the walls of silos where functions are “siloed” off and have very little insight into what other departments are doing. Moreover, the metrics each function tracks and reports on typically only fall within that silo which only allows them to see a sliver of how the overall process is performing.

To avoid running into this narrow view of outcomes, the key is to identify the critical, value-adding activities and decisions—end-to-end, all the way to the customer— and then line up decision processes and separate them from the management hierarchy.

Let’s look at the customer order process at an e-commerce company as an example. Their marketing department is likely tracking website metrics like site visitors and conversion rate; the customer support team may be monitoring CSAT from chats made by users on the site; the supply chain team is likely watching the percentage of items in-stock and average estimated time to delivery.

While these are important metrics, surely, they individually do not get at the center of that stage in the customer journey: the customer’s NPS or overall satisfaction score. Focusing on the sub-layer of metrics rather than true key performance indicators (KPIs) can cause a business to not see shifts in the outside world until it’s too late.

How to staff your business to achieve unparalleled agility.

What I’m suggesting here is a better, more agile approach to staffing: modernized outsourcing.

The modern approach to outsourcing is underpinned by flexible contracts that enable businesses to make changes after brief periods (i.e. after 60 days vs. 2 years in the traditional approach), giving them the flexibility to rapidly measure, optimize, and continuously improve.

It allows businesses to get meaningful results from business activities, not just performing activities. Furthermore, it leaves the business open to using flexible labor or other businesses to assist with the non-core activities. By having these relationships established and contracts already signed, organizations can more effectively resource during times of change.

When you outsource the modern way, you’re able to leverage the power of multiple partners to help your business so that you’re able to react quickly if something happens to you or one of your other partners. This means that if one leg of your operations goes down you have a network of trusted partners ready to pick up the missing piece until it becomes operational again.

By using multiple vendors, you’re able to react more quickly and scale faster – even intraday – creating overall better experiences for your employees all the way to your customers.

So what does this really look like?

The future of staffing.

When you consider a modern staffing model that includes outsourcing partners, your team structure might look different (in some cases, much different) than it does today.

Typically this means a small(er) internal team plus a portfolio of trusted partners who are trained up on your business and can easily step in to help with the workload and flex up during spikes in volume.

A CFO or finance leader will love the lower fixed headcount expenses, increased operational flexibility, and, if outsourcing partners are variably compensated, overall costs will be truly aligned to volume (and revenue).

Inside our operations: staffing for the unknowns of the future

Here at ArenaCX, we pride ourselves on practicing what we preach – because we know it works! We are, and have always been, laser-focused on what is truly ‘core’ to our business – and only those items are hired internally. We believe so strongly in a modernized staffing model that we use it ourselves, and we’re helping more and more businesses move toward this model every day.

Our impressive network of over 50 (and growing!) carefully vetted BPO partners are able to do almost anything in any vertical. Need sales reps to grow your business? We have partners who can provide end-to-end sales management or skilled SDRs trained in selling products like yours. Need customer service in various languages to support customers across the globe? We’ve got you covered.

From data entry, to bookkeeping, to outsourced CFOs, skilled outsourcing partners are available to help you achieve the business agility that will help you use your cash more efficiently while baking resiliency into your operations.

Next time the unexpected happens, you won’t have to wonder if your business can survive – you’ll be leading the pack.

Interested in learning more about how ArenaCX can help you with the right partners to achieve business agility?

GET IN TOUCH