NCFIL Executive Director’s Perspective: September 2020
September 30, 2020
“Patience is not the ability to wait, but the ability to keep a good attitude while waiting.”
I’ve needed to keep reminding myself of that this past month. After a flurry of activity in August, September slowed considerably as bigger jobs than ours have been getting the attention of the trades people we need to finish equipment installation. Fortunately, a few September projects were not dependent on equipment not yet connected, and the products we were manufacturing were for research purposes only. Next month, I hope to have more positive news about the facility and its operational status.
This month’s perspective dives into the realities of food businesses dealing with an unprecedented VUCA environment as well as what will drive our industry looking forward.
What is VUCA?
VUCA is a term that originated from leadership theories written about by Warren Bennis and Burt Nanus, describing the Volatility, Uncertainty, Complexity and Ambiguity in business situations, but the U.S Army War College further derivatized the meaning after the Cold War to describe global situations and reflections on the role of VUCA in systemic failures and behavioral failures. These lessons were then used to educate leaders to plan on failures within future strategic planning.
I have frequently spoken and written about VUCA over the past ten years, but today’s environment is much more volatile than years’ past. The food industry was dealing with consumer attitudes changing, the desire for clean labels, a shift in the profiles of food that consumers would consume, and an industry in constant consolidation. And then the pandemic hit, demonstrating how quickly things change and evolve to something that may not have been previously considered.
Last month, I shared many of the changes we have seen as a result of the pandemic, but as we begin to look toward what’s next, how can an entrepreneur use VUCA to his/her advantage and how quickly can major companies pivot to assess and correct during this time of hypersensitized VUCA?
COVID: A VUCA Environment
Interestingly, COVID closely resembles a VUCA situation when one examines the non-linearity of information being shared with the public. A large amount of complexity has certainly occurred as scientists and politicians tried to explain the virus and its pathology to the public. Disagreement amongst global leaders in medicine on how to protect the public and treat patients demonstrated ambiguity, and as politicians began arguing about the proper way to “flatten the curve,” we saw real examples of uncertainty along with ambiguity.
Markets and supply chains showed their volatility as consumers went from nearly 60 percent of meals eaten away from home to over 90 percent of meals eaten at home. Food and consumer goods prices increased at unprecedented rates. The food supply chain had to quickly redistribute goods moving within the supply chain. Uncertainty for the industry arose as food companies dealt with how to keep employees safe while they produced food for the masses.
How can food business leaders use VUCA to their advantage now? We are certain VUCA is not going to disappear from the industry anytime soon. Will it maintain its hyperactivity? Let’s consider what to think about in the near term framed by VUCA.
Using VUCA to Your Advantage
Chances are good that both entrepreneurs and multinational food companies experienced disruption in their supply chains and manufacturing operations during the pandemic and, in some cases, may still be encountering challenges.
Ways to respond to volatility:
- Reflect on supply chains and secure not only second layers, but possibly third, fourth or fifth layers, of where to find goods and services. Even if the world returns to “normal” (highly unlikely), this action enables companies a more powerful position to negotiate favorable contracts.
- Utilize different approaches to analyze multiple independent variables to solve problems. Long range strategic planning should have many different perspectives than just answering the question how do we find more customers? In today’s VUCA, you must look more at maintaining current customers and finding ways to secure their loyalty.
- Change the Volatility view to one of vision; this is certainly a good time to review business strategy and, if necessary, make revisions or course corrections.
- Emphasize to leadership and customers the business’s core values and purpose. Now is also a good time to envision the future and establish very aggressive goals.
Ways to respond to uncertainty:
- Take time to reflect on the uncertainties faced during this pandemic in terms of improving business. Don’t mistakenly look at business data through a cause and effect lens or by using rational linear thinking; embrace and use non-linear thinking when analyzing what has happened to business at this time.
- Use multiple techniques to promote organizational change and improve your agility through times of uncertainty.
- Change the Uncertainty paradigm to one of understanding.
- Fully understand the changes your company faces and what the impact will be to business; then, develop strategies to mitigate this uncertainty.
Ways to respond to complexity:
- Probe all of the assumptions behind the data. Look for inter-connectedness between data points and assumptions.
- Use these networked data points toward understanding how the pandemic has impacted business and where to take advantage of it to improve. Employees currently need leadership to answer questions about job security and income security.
- Provide clarity to employees, and if the company takes a turn for the worse, also provide clarity as to why certain actions are taken.
- Encourage your employees to take experimental approaches to solve problems and reduce complexity. This is a good time to encourage both success and failure when new approaches are tried. The old principle of “keep it simple stupid” still applies even in times of increased complexity.
The pandemic has demonstrated there is no playbook or best practice for organizations to follow to manage the challenges faced the past seven months. Professionals are wondering about predictions or forecasts, whether they make them or some other expert. This is part of ambiguity, but successful leaders throughout this pandemic have shown flexibility by adapting their strategies based on the situations faced. Adaptability and agility are how we can mitigate the challenge of ambiguity.
During this pandemic, established and entrepreneurial companies have eagerly looked at unexplored market spaces for their companies, where competition is irrelevant. For example, consider Beyond Meats’ rapid move into direct-to-consumer marketing and product delivery. Several food companies increased their customer service capability to field phone calls or text messages from anxious consumers with questions about cooking meals at home. Fast food companies expanded their drive-thru capacity by increasing the number of lanes to quickly order and pick up food with minimal human contact.
With Disruption Comes Opportunity
Never let an opportunity pass without looking where you can make an impact on the future. The pandemic has been a major disruptive period for many industries, and companies showing resilience, perseverance and innovation are companies that will emerge as future victors.
Thank you for reading this month’s perspective. These are the views and opinions of the NCFIL Executive Director and may not reflect the opinion of others at NC State University. We welcome your feedback and perspectives.
Plant-based food innovation is a very active area in the food industry, so let’s talk about how NCFIL can collaborate with you to navigate VUCA from a new perspective—vision, understanding, clarity and adaptability/agility.