We are constantly confirmed that portfolio organisations are struggling to combat the aggravating geo-political and supply chain challenges. What are they struggling with?
– Structural inability to fully offset the increase in operating costs through price adjustments
– Labour shortages cause lasting hick-ups in scheduling, productivity and throughput
– Supply security and quality disruptions
– Margins and On Time In Full delivery, which severely impacts customer service levels
It is not a surprise that it is difficult to navigate through these turbulent forces. We are living through an age of increased volatility. The frequency and magnitude of disruption relentlessly increased over the past decade. It leaves PE firms and leadership of portfolio organisations concerned. More disruptions are certainly stacking on top of each other: geopolitical realignments, inflationary adjustments, climate change challenges, labour issues, demand and supply shortfalls and increasing economic volatility.
But there is a solution. The most effective organisations play both offence and defence. They are prudent about managing the downside while aggressively pursuing the upside. How? One of the things they do, is that they focus on building a more effective operating model. It is the go-to way if you want to eventually distinguish yourself as a winner from the rest. Times like these require courage from leaders to make bold strategic choices. A resilient operating model is the basis for successful execution.
