Very many argue that the Covid-19 pandemic – and even more so the downturn in the economy it has brought about – constitutes a unique opportunity to radically reform management practices, management techniques, reflections strategic, and therefore both the economy and society. Building on the principle that ” never spoil a crisis “(Dixit, for example, Guillaume Faury, CEO of Airbus), they postulate that we have crossed a definitive course and that the” next world “will necessarily be different from the” before world “.
However, one can reasonably assume that the organizations will not radically change. Indeed, among the concepts that cross management literature, that of organizational inertia is perhaps one of the most central.
Of the behavioral theory of the firm de Cyert and March (1963) at the blue ocean strategy by Kim and Mauborgne (2005), du exploration / exploitation dilemma from March (1991) toincrementalism Johnson (1988) and neo-institutionalism of DiMaggio and Powell (1985) to the notion of disruption defined by Christensen (1997), we find the same observation: one of the main characteristics of organizations is their inertia.
The organization is based on inertia
By nature, organizations are systems that seek to always apply the same routines, to reproduce the same recipes for success and to perfect the same procedures. What an organization wants above all is to do its job; what all of the functions that compose it want above all is to function.
Without inertia, an organization simply cannot function.
If it were always necessary to reinvent everything, if everyone was in permanent improvisation and innovation, interaction would be properly impossible.
Imagine that your bank, your baker or your telephone operator changes its services and conditions of use every week. Imagine that your colleagues are never the same and that your tasks are constantly modified.
If we can live and work together, it is precisely because our actions are predictable. It is on the inertia of our behavior that the confidence that we inspire rests. Our reliability is measured by our consistency. It is the very nature of collective action to build routines and habits, procedures and rules, repetitions and experience.
How to maintain this inertia when, by nature, the competitive, regulatory, technological and environmental context is changing?
For this, a healthy organization must present ” slack ”, That is to say a flywheel of surplus resources, not allocated, which makes it possible to respond to unforeseen events and to mitigate the inevitable imperfections of the processes.
If all the scheduling of collective action is based on optimized systems, the slightest grain of sand can seize the machine. This is the reason why it is prudent to always ensure the redundancy of ordinary skills, the multiplicity of procedures, the presence of a budgetary mattress, the availability of a supernumerary workforce.
However, of course, sound management consists precisely in eliminating slack, optimizing systems, choosing the most efficient approaches and eliminating everything that is not absolutely necessary.
This is precisely the responsibility of the strategic leader: arbitrate between sound management and the ability to adapt, make sure to always leave areas of vagueness in the most optimized processes (possibly against the advice of managers and especially shareholders), avoid that the reality of everyday life does not prevail over the eventuality of the exceptional.
Strategy postulates continuity
If the organization is based on inertia, the strategy consists in orchestrating changes. However, the classic tools of business strategy postulate continuity rather than rupture.
Let it be the experience curve, the PESTEL, the BCG matrix, the SWOT where the 5 (+1) competitive forces, the most recognized and used models are based on the assumption that the present – when it is not the past – is a good predictor of the future.
By definition, the strategy consists in allocating resources which commit the company in the long term, in order to obtain superior performance.
In an authentically unpredictable environment, the very notion of strategy makes no sense: if all anticipation is impossible, committing to an allocation of resources (whether human, financial, physical or technological) amounts to nothing more no less than a bettor, but certainly not a strategist.
In fact, facinguncertainty, the strategy must give way to agility, that is to say to permanent adaptability.
What could a strategy designed to take into account an event such as the confinement of 3 billion human beings have looked like? What resources would it have been necessary to sanctuarize to resist a pandemic of which it was impossible to anticipate, neither the gravity, nor the date, nor the nature?
The sheer enormity of this scenario would have eclipsed any other consideration to the point of monopolizing all of the resources: only the survival plan would have prevailed. In a word, it would have been a perfect example of anti-strategy.
Besides, many other crises threaten us: natural disasters linked or not to global warming, nuclear conflict, cyber attack, chemical or biological attack, etc. (and it is the “etc.” which is the most important in this list).
Each of these threats requires different preventive measures and involves immobilizing separate resources. From time to time, all our efforts should therefore be reserved for the anticipation of future crises, our present would become unlivable and the aspiration for happiness suspect.
Wanting to build organizations capable of dominating uncertainty is an absurd project. As the writer Aldous Huxley said maliciously: “Medicine is making such progress that soon no one will be in good health.” “
Humanity has experienced other crises far more devastating than that of Covid-19, including two world wars twenty-one years apart, not to mention the Black Plague, smallpox and Spanish flu. However, each time, the economy, worth it, ends up regaining its place. Everyday life gradually won out over the exceptional. Thehomeostasis imposed itself.
Management is the conduct of collective action, and the ultimate objective of the corporate strategy is progress. We must remain modest about the scope and ambitions of our management tools: they are designed to improve everyday life, which is already a lot, but not to enslave the exceptional.
Want to protect yourself from everything, ” whatever it costs “, Leads to a security absolutism whose consequences are worse than the causes.
Faced with the next shock, let us prefer action to precaution and the search for prosperity to the tyranny of abstinence.
By Frédéric Fréry, Professor of Strategy, ESCP Business School