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- Herausgeber: BoD - Books on Demand
- Kategorie: Fachliteratur
- Sprache: Englisch
In the past it was purely about value for money, the uniqueness of products and services, or efficiency in service delivery, today's competitive environment has added factors that require a rethinking of one's own corporate capabilities. Reliability, resilience, and a sense of responsibility are not only demanded by individual customers influenced by social media. Supply chain controls, regulatory requirements, and purchasing conditions imposed by major buyers require today's decision-makers to establish "high reliability" as a corporate capability. This guide shows how this can be achieved successfully.
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CONTENTS:
Foreword - The consequences of a complicated world
The path to "High Reliability"?
Risk - Resilience - Compliance - The interrelationships
Self-knowledge - strategic posture and planning security
Reliability and knowing what you have and what you can do
When decisions have to be made quickly, but you can't do it
Resilience as an integrated process chain
Methods for strengthening entrepreneurial reliability
The value of early detection
The pitfall of early detection - when does something become relevant?
What a situation picture has to do with high reliability
Bow ties are more than just pretty bows
CHAOS - Chief appears on Scene
Crisis Handling - Leading in a crisis?
Compliance - ISO certificates and proof of trust
Deciding along the "resilience chain"
"Decision modelling" and early warning
Situation assessment mechanisms in crisis situations
Sensemaking - Not all decisions are the same
OODA or the parabola of the positive decision balance
The decision lag - why a yes or no alone is not enough
Chaos engineering and stress tests
Where technology helps to establish "high reliability"
Sensors - Data - Information - Situation pictures
Prerequisite for success - data literacy and data maturity
The art of finding targeted answers
Early detection and early warning
The art of relevance - how to make risks visible
Cause and effect in early detection and early warning
Backsight, insight, foresight and decision intelligence
Decision Intelligence - or the art of asking the right questions
Eyes open instead of eyes closed and through
The curse and blessing of the demanded "high reliability"
Further sources
About the author
Further publications by the author
Blogs
Contact us
Foreword
The consequences of a complicated world
We are all familiar with it: an economic world that strives for efficiency and optimised value creation. But the pursuit of optimised value creation seems to have its limits. According to the above logic, it must mean that those who have optimised themselves are prepared the best way. Accordingly, companies with a permanent drive for optimisation would have to live for a very long time. But there rests some scepticism.
If we consider the average lifespan of a company in (including the scenario of going out of business), we arrive at 9 years. Listed companies make it a little longer at 20 years, but no research has been conducted into how often they have "reinvented themselves" during this time with the help of external capital.
So, what is wrong with this equation? One assumption: optimisation is very often achieved by means "specialisation", resources and skills are only used "one-dimensionally", what is unnecessary in the short term is outsourced, omitted and eventually forgotten as a skill in the company. In other words: you adapt structurally and survive a little longer. Adaptation to disruptive events was and is not envisaged here.
The result: value chains became longer, they were fragmented, outsourced and/or transferred back and, at the same time, entrepreneurial skills that were once needed became island talents while others were lost altogether.
That in itself was not a bad thing. It's just stupid when the flow of services between all the entities involved in value creation (knowledge carriers, parts of the company, technologies, customers) suddenly stops working.
A small virus demonstrated this to us. Employees suddenly had work from home, deliveries were delayed or cancelled, customers' consumer and decision-making behaviour changed, and planning reliability was lost not just briefly, but completely over a period of almost two years.
In the end, the state had to step in because the companies themselves did not have sufficient reserves to compensate for these service shortfalls and additional expenses.
As soon as this caesura was over, the supply and service flows were thrown out of balance by a break in the global political structure. An end to this state of uncertainty is still not in sight today.
What we all realise: In times of uncertainty, consumers and decision-makers do not necessarily opt for the most efficient supplier or service provider.
The more long-term a business relationship is defined, the more reliable the partner should be!
Reliability is therefore favoured. The provider that can hold its course even in stormy weather is chosen. Preference is given to those players who have sufficient reserves, agility and adaptability in terms of content just to be able to fulfil the service promises made to their customers.
You will have noticed the word “reserves” in bold. Reserves are pretty much the last thing you want in an efficiency-driven business world. Nothing could be lean enough, flat enough, scalable enough.
On a "small scale", these scalable units were easy to control. However, as soon as these chains became uncontrollably complicated, a solid supply chain became a complex issue.
Realisation: As soon as life circumstances become changeable, "simple" beats "complicated", resilience beats efficiency, long-term reliability beats the singularly profitable "deal".
The path to "High Reliability"?
The only thing, it seems, is that we as decision-makers do not yet have the appropriate toolbox for these new realities. This book is intended to provide relief or a source of inspiration for the "exciting times" that lie ahead.
Before we delve into the terminology and rules of doing business in a complex environment, one thing should be emphasised: Not everything from earlier times is obsolete. Even today, customers still make decisions based on benefit, value and price. The only thing that has been added is the fact that the ability to deliver and the price-performance ratio must remain stable even in a changing business environment.
Some of you will have come across the term "resilience" when reviewing the business literature in this context. It also appears here. But I'm not putting it at the top of the list. Resilience is a core capability that companies possess. It is the reliability that ensures the company's success as a selling point and "outcome" to the outside world and is therefore demanded by the customer.
Pic 1: High Reliability Organisation Framework
Reliability in the delivery of services, reliability in learning from adverse circumstances, reliability in adapting the range of services, reliability in entrepreneurial behaviour even towards "non-customers" (keyword ESG) is the central anchor word here.
Accordingly, this book guides you along these chapters on a path that should enable you to transform into a "Highly Reliable Organisation".
Pic 2: High Reliability Organisation Framework - Domains
Starting with the term "high reliability", we work our way through the basics to the implementation details. Starting with the answer: How does "High Reliability" come about, the story plot is described along the route of the "Resilience Chain", methods used, decisions made by managers, use of technology.
According to this guiding principle, high reliability is achieved through the targeted development of a corporate capability called "resilience". The resilience chain serves as a model for this. This is nothing other than the application of forward-looking risk management, starting with the early recognition of risk triggers, the preparation of a possible "Plan B", the ability to act swiftly and the final increase in the organisational learning curve.
You will really break new ground when it comes to methods and decisions. Topics are discussed here that can hardly be found in the standard textbooks. They come from the field of crisis management, decision-making under pressure and based on an unclear situation and are aimed at the toolset that normally only crisis managers have access to. This guide is rounded off with the topic of technology support, pitfalls and future technologies for managers of "highly reliable organisations".
In short: a tour d'horizon for managing companies in "exciting times".
Risk - Resilience - Compliance: The interrelationships
First: the term "high reliability" is not a new invention. A high reliability organisation is an organisation that is entrusted with the creation of products and services with a very high-risk potential. Imagine a hospital, a nuclear power plant, an airport or an emergency organisation and you will know what the word's creators (all from the USA) meant.
Highly reliable organisations are characterised by the fact that they operate successfully in volatile and complex environments over long periods of time and perform consistently well. Despite the challenges posed by environmental influences as well as personal and technical factors, these HROs manage to avoid significant performance failures. They achieve this thanks to their ability to actively manage uncertainty, avoid disruptions as far as possible and them quickly without suffering lasting negative consequences.
However, it is precisely this ability that organisations that want to make their reliability a competitive advantage or, even better, a guarantee of their economic success, must increasingly acquire today. Or because very specific purchasing criteria from major buyers and official requirements simply demand it.
Pic 3: High Reliability Organisation ESG and Compliance
The attribute of "high reliability" is therefore being extended more and more to companies not otherwise categorised under the term as a result of increasingly stringent regulations. The reason is simple:
The authorities and political players, who in earlier times poured out their cornucopia to compensate for many risks, no longer want to do this today.
More and more, however, individual players, buyers and decision-makers on the line are also tending to delegate unmanageable risks to where they are better managed. Those who are not willing or demonstrably able to manage these risks are therefore dropped from the purchasing process (keyword: third party risk management and compliance).
The blessings of social media make it increasingly difficult for companies to stay out of the crossfire of knowingly or unknowingly triggered mood swings of an intangible public. In earlier times, it was far easier to survive such crisis situations.
So, it's time to find out which "screws" you can turn to get a little more fur for these rough times.
So where are these screws located and how are they connected?
Reliability begins with honouring the performance promises you have made to your customers, even under the most adverse circumstances.
Pic 4: High Reliability Organisation Operational Context
You therefore begin to anticipate the ability to deal with the unexpected in the entire depth of your work. Risk (as a deviation from the result) becomes a constant companion. Every risk is used for learning, as an opportunity and as a lever to prepare for future adversity. This establishes what is known as "organisational resilience" in consultancy parlance.
However, this storyline has wider ramifications:
In a highly reliable organisation, every structured action and decision should be based on a set goal, but there should also be an alternative for deviating from these goals
Consequently, a sensorium should be built up before the occurrence of a specific risk scenario in order to recognise it at an early stage and call up a "Plan B"
Ultimately, this means that the entire organisation is constantly asking itself whether its own organisational skills and resources are sufficient to meet future challenges.
Constant training of one's own organisational fitness (used here as a strategic position) is therefore the rule rather than the exception.
Which us to the "bouncing decimal point". Reliability costs money. Money that in a "Efficiency-driven" companies is often spent on other purposes or not budgeted for at all. However, this almost system-immanent fact proves to be fateful in times of constant change, loss of resources and performance flows such as raw materials, energy, shortage of skilled labour, environmental influences, etc.
For this reason alone, more and more regulators are interfering in entrepreneurial freedom of action. They want to prevent the taxpayer from footing the bill again in the end.
At the same time, however, the participants in the supply chain - i.e. the purchasers, and later the buyers and consumers - demand more continuity and responsibility before they buy something, even if it is only to secure their own chair or to reassure themselves with a clear conscience.
Self-knowledge - strategic posture and planning security
The quote that I come across again and again when dealing with crisis events and implementing risk management processes is the one on planning security:
