How multimodality can help your organization survive the next crisis

Let’s face it, change is inevitable. As painfully demonstrated by COVID-19 over the past year, only those who manage to adapt have a chance to survive. Rituals, for example, recently decided to utilize store staff for home delivery of their luxury feel-good products upon nationally enforced closure of non-essential stores. Doing so ensured effective use of otherwise ‘wasted’ resources and demonstrated their adaptability in unprecedented times. 

With vaccination campaigns on the way, we are slowly starting to believe the crisis will come to an end soon. This is no reason to sit back and relax, however tempting it may be. If history is any indication, the next disruption is already waiting to knock on our doors and let us not underestimate the burden of the COVID aftermath that is coming our way as well. Rather than resisting the required change or trying to predict the unpredictable, organizations should ensure their adaptability to survive such disruptive events and spin the situation to gain some benefits by focusing on what is important, not just on what is urgent. In the final blog of this trilogy, we explore why organizations often fail to deal with a crisis successfully and explain how multimodality can help your survival.

Organizations often fail to capture the value of opportunities instigated by change

Capturing true, sustainable value of opportunities is often hindered by organizations being overly occupied with either the Shit of Yesterday (SOY)^[1]or the quick wins of tomorrow. Essential resources in terms of time, budget, and talent are wasted on such legacy or on initiatives with a short-term perspective, leaving too little capacity for what truly matters. As a result, in times of crisis or disruption, the organization lacks the force to adapt to the new circumstances. Take for example DHL, who are currently struggling to deliver packages on time, or even at all. Picnic, a Dutch online food retailer, is experiencing similar demand-supply issues resulting in fully booked delivery slots and ultimately customers seeking salvation at its competitors. Both companies are in over their heads right now. 

Dynamic capabilities enable organizations to respond adequately to change

The obvious lesson here is that organizations need to be prepared for disruption and be able to change. The question that remains is “How?”. Change requires capacity and thus capacity should ideally not be wasted on ‘SOY’ or legacy. One thing that survivors have in common is access to built-in dynamic capabilities^[2], enabling them to respond effectively to unforeseen external events. These organizations are able to make swift decisions, and seize opportunity the moment it rises, such as the example of Rituals. Of course, this hinges on the attitude of the organization’s leadership. The CEO of a large Dutch retailer, that was forced to close down during lockdown for being ‘non-essential’, recently expressed his disappointment in one of his ‘essential’ competitors on social media. In his opinion, the competitor abused his ‘essential’ status, i.e. the ability to remain open during lockdown, for offering non-essential products similar to the CEO’s for a discounted price. A lack of solidarity, according to the CEO. Rather than focussing all his efforts to find alternative ways to yield revenue, the CEO thus resorted to self-victimisation and pity. We expect this finger-pointing behaviour won’t take him very far.

Building robustness against disruptive events in the form of dynamic capabilities is, of course, not a simple task. Organizations need to adapt over and over again to survive. Take Nokia, for example, mostly known for its line of mobile devices such as the epic ‘3310’. Before focusing on mobile phones, however, Nokia’s activities ranged from rubber production, to telecommunications, to pulp processing. Changing market circumstances caused Nokia to narrow down her portfolio. A smart adaptation of their business, as they rapidly became market leader for several years. Their leadership was however disrupted by the introduction of Apple’s iPhone. Suspectedly due to poor strategy and lack of dynamic capabilities, Nokia failed to adapt to the changing consumer needs and slowly lost their share on the market of mobile devices. Admitting defeat, Nokia transformed to become primarily a network technology provider a few years ago and despite the challenges thrown at them over the years, still exists today. Constant adaptation is key to survival. 

Multimodality helps your organization to be ready for change

One way to work on your dynamic capabilities and be able to appropriately adapt yourself to the changing environment is by approaching your organization in a multimodal way. Multimodality^[3] is a granular approach to the organization of technology and data, based on the characteristics of your business activities. It helps to identify what activities your organization should focus its innovative abilities on, how it is likely subject to change and disruption, and subsequently how to organize yourself accordingly. Multimodality characterizes business activities in two dimensions: (1) whether the activity is set to generate customer value or to be cost efficient and (2) whether, for you, the activity is specific or generic, ergo done by your competitors as well.

Activities that aim to create customer value and distinguish you from others require constant change to maintain your competitive advantage. These are the activities most likely to be hit by disruption and at the same time are the ones that can enable your survival. A great example are the developments currently seen in the mortgage industry. Boosted by the lockdown and its subsequent inability to meet with clients in person, mortgage providers focused on quickly realizing an online environment for their clients to arrange and close mortgages, eliminating face-to-face contact and even the necessity for a broker himself. The hospitality industry is becoming increasingly inventive in finding new ways to generate revenue as well; many started offering holiday-themed snack and drinks boxes, coffee-to-go stalls are popping up like mushrooms, and new collaborations are forming to arrange city tours visiting various establishments that offer their food and beverages in takeaway form as part of the experience. All within the boundaries of the COVID regulations. Thus, in times of crisis, efforts should be focused on these customer-facing, value generating activities. Continuously innovating them and enabling new business models to meet the changing circumstances is key. 

The illustrations above comprise a simplified example for just one of the four modalities we acknowledge. It serves to provide some first insights in the multimodal way of thinking and its role to prepare your organization for disruption and change. Note that implementing the multimodal mindset in your organization does not happen overnight. If you are interested to learn the full story of our multimodal concepts or want to discover how it can benefit your organization, feel free to hook us up for a cup of coffee, no strings attached. Let’s make sure we are ready for the next crisis to come, together!

^[1] The Day After Tomorrow by Peter Hinssen, 2017.

^[2] See the theory on Dynamic Capabilities from Teece et al., 1997: p. 515

^[3] If you are interested in the concept of a multimodal organization, please download our whitepaper: Organizing data and technology