Moving Faster: What is Organizational Velocity?

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I have spent some time recently reflecting on all the fantastic presentations we've had in our SCLA Executive Think Tank group during the first half of 2022. With discussions about topics as diverse as the effects of home delivery failures and leveraging Big Data to reduce ocean shipping challenges, we have created a powerful forum for supply chain leaders to share knowledge and network. That's priceless.

In looking back, I also realized that there were some very exciting presentations that I haven't yet shared here on LinkedIn. So, today, I'm taking a few moments to cover one particular stand-out—related to a concept called "organizational velocity."

Dr. Alan Amling, who connected with our group in mid-March of this year, originated the terminology. (He also recently published an exceedingly useful business book with the self-same title, Organizational Velocity.) So, what is organizational velocity (OV) exactly? Let's do a quick overview.

Acting with Speed and Agility is a Challenge

In Dr. Amling's own words, "Organizational velocity is the ability to observe, accept and act with speed and agility." We often discuss those magic words in the supply chain industry: speed and agility. It's no secret that our industry desperately wants to embrace these qualities despite the fact that they are very challenging to put into practice. But why are they so challenging for organizations?

[Related Content: my recent article, Researchers are Increasing Supply Chain Agility with Cognitive Tools. Make sure to give it a read!]

Dr. Amling noted, "Corporations are historically very good at observing. It's not that they don't see the disruption at their doorsteps. (It's also not that they can't act on it, especially the folks on this call—that's what we do as supply chain professionals—we act!) What I found was that the 'accept' is where companies had a really hard time."

Why is Acceptance so Difficult?

In many organizations, especially decades or even centuries-old incumbent companies, there exists what Dr. Amling calls "defensive paradigms." In other words, there are often layers of bureaucracy for approvals in which any number of managers/executives can throw up a "no" to new ideas and initiatives—and so many do.

When you have a culture of "no" like this in your business, it obviously slows things down! Yet many organizations see this kind of approach as safe since it tends to defend short-term profitability. So perhaps it's more apt to call this a culture of "we need to be careful," which leads to missed opportunities.

How to Move Faster—Trust is a Big Factor

As Dr. Amling examined decision-making processes among companies during his research, he found that when managers have greater spending authority, organizations tend to move with greater speed and agility—while also generally getting good outcomes. The reasoning? "[These managers] have less approvals. They can move quicker. They have more responsibility to get a successful outcome. It's not a committee that disperses responsibility; it's individual responsibility."

That individual responsibility is made possible by one of the big 'T's of Transforming the Supply Chain'—Trust.

Essentially, when your high-level managers are trusted and then given the authority to spend money and make big decisions, they can propel an organization forward like never before. Empowerment comes from the top down, and trusted leaders tend to challenge one another in a healthy way, knowing that the C-Suite has their backs. Trust is the key ingredient in keeping the organization vital and open to opportunities.

Other Key Takeaways

Of course, there are other factors that promote OV. Dr. Amling noted that companies can get in their own way by being "too smart" and just assuming that their track record of good decision-making will keep them secure in the future. He said, "when things in the external environment change and you've been so accustomed to making good decisions, you don't even think about it. When we make decisions, we think about a successful decision we made in the past and repeat that. In a stable environment, that works. In a disruptive environment, that doesn't work."

As we know, the environment we're navigating through right now—and for the foreseeable future—is anything but stable.

A few other big things that allow companies to move fast include:

  • Being tech-savvy/using digital tools and data effectively. This is only possible when companies embrace an understanding of new technologies and how they are changing what's possible.
  • Having the right mindset, which is essentially "it all begins with you" (aka personal responsibility).
  • Not committing unsuccessful projects to corporate memory—at least, not as failures or cautionary tales. Instead, unsuccessful projects always need to be treated as learning experiences.

Q&A: How is OV Related to Continuous Improvement?

One important question that came up in the discussion of Dr. Amling's research was whether OV is synonymous with continuous improvement (CI). While not the same, they are related.

It might be said that continuous improvement is not quite as revolutionary as organizational velocity. CI looks like sharpening a knife, while OV is about creating "new knives"—revenue streams, capabilities, and options for your organization. This may look like creating partnerships and relationships with other companies as well.

Is Your Organization Moving with Speed and Agility?

I highly recommend that you pick up Dr. Amling's book to help assess the status of your business's "OV muscles." We all know that moving with speed and agility can be a struggle, but it's crucial in our digital, post-pandemic world.

Is your organization great at moving quickly? Or is this something you'd love to work on improving? We would love to hear your perspectives at SCLA. Please connect with us, or reach out to me directly to join the conversation!

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Tuesday, 16 July 2024

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