Navigating The New Normal: The Power of Dynamic Management In Today's Turbulent Business Environment

Much focus has been placed on the increased turbulence within the global business landscape. The pandemic provided the starkest, sudden, and widespread example of this. Still, ongoing supply chain disruptions, geopolitical unrest, climate change, and economic instability have created an environment where a lack of predictability has become somewhat predictable.

The growing imperative for efficient and responsive business operations underscores the critical need for dynamic management. This robust management approach allows businesses to navigate predictable and highly variable environments with resilience and agility.

Dynamic management is a framework that breaks down operations into manageable components and emphasises the interplay of three overarching and interconnected pillars: process, performance, and people. It is based on the notion that changing these elements impacts the other two.

Leaders tend to examine these elements in isolation. Still, recognising how these elements interact and reinforce each other separates high-performing and low-performing organisations. For instance, supply chain disruptions often necessitate process adjustments, which affect performance metrics and require changes in how people manage and execute tasks.

For companies that must deal with volatile demand and supply, dynamic management provides the flexibility and resilience to adapt to external changes. Dynamic management offers a framework for optimised operations for companies lucky enough to have relatively consistent demand.

The Changing Landscape

Volatility is no longer an anomaly in business. It is a daily operating reality. As a result, many organisations need help to maintain stability and visibility in their operations.

A method of thinking about volatility was developed in post-Cold War military settings to prepare leaders for a world in which traditional strategies and tactics were no longer applied. The acronym used was VUCA (Volatility, Uncertainty, Complexity, and Ambiguity.) Today, VUCA is evident in business in various ways.

Volatility is seen in market fluctuations, where rapid changes in stock markets driven by geopolitical tensions or economic policies create unstable conditions for investors and businesses. We saw this with Russia's invasion of Ukraine in 2022, which rocked global stock markets and sent energy prices soaring. We've also seen this with the pace of technological advancements, such as AI and machine learning.

The need for predictability in regulatory changes, such as data protection laws or environmental policies, highlights uncertainty. These often create challenges for businesses operating across different jurisdictions. The introduction of the General Data Protection Regulation (GDPR) in the European Union, for example, required businesses worldwide to adapt to new data privacy standards quickly.

Complexity arises in managing global supply chains, which involve navigating intricate networks of suppliers, logistics, and regulations, making efficient coordination challenging. Disruptions at crucial trade corridors like the Panama Canal and the Suez Canal in 2024 have highlighted businesses' difficulties in maintaining smooth operations across international supply chains.

Ambiguity is present when entering new or emerging markets, where unclear market dynamics, consumer behaviour, and competitive landscapes create uncertainty. The potential impact of disruptive technologies or business models can also be ambiguous, making it difficult for companies to predict future trends and invest accordingly. Each of these conditions requires businesses to be agile and adaptable to successfully navigate the challenges of today's shifting environment.

Managing Dynamically

Navigating the ever-changing business landscape requires leaders to manage their businesses dynamically. At the root of this type of management is the deliberate breakdown of operational components into building blocks and the detailed understanding of how those building blocks fit together. The objective is to create the ability to effectively anticipate and predict outcomes when those building blocks are moved around in response to supply or demand disruption.

Organisations operating in industries with relatively consistent or predictable demand may be underprepared for sudden disruptions. Forecasting may seem straightforward; supply is planned or built well into the future, and management practices become routine. But this sense of stability can be quickly shattered by unexpected external shocks.

Economic disruptions can shift demand patterns overnight, supply chain issues can halt production lines, environmental crises can force operational changes, and geopolitical tensions can introduce new trade barriers. In such scenarios, the absence of dynamic management can leave organisations floundering.

When the business environment suddenly becomes more variable and unpredictable, challenges multiply. Managing operations in such settings requires constant adaptation to variability. Many organisations need more frameworks, tools, and training to react swiftly and effectively to these changes. In these environments, dynamic management provides a stable anchor point for managers to identify and respond to unanticipated variances quickly.

The Building Blocks of Preparedness

All businesses are susceptible to specific disruptions. Whether dealing with the stream of work through a plant, passenger movement through an airport, or patient flow in a hospital, unpacking the elements of workflows and understanding their interrelationships is critical. This understanding helps businesses anticipate and respond to sudden changes effectively.

For example, an unexpected event can lead to a sudden influx of patients in a hospital setting. Concurrent supply chain disruptions might simultaneously affect the availability of essential medicines or supplies.

Examining the building blocks of a hospital's operations, such as the patient admission processes, clinical care pathways, operating room scheduling, ancillary support, and discharge processes, can help management better navigate and manage disruptions. Many challenges in patient flow relate to breakdowns between steps in the various pathways.

Correctly understanding the flow and demand and supply relationships between customer or patient journey elements introduces the necessary complexity of scheduling and performance management. When schedules change due to sudden shifts in supply or demand, organisations must be agile enough to react to the impact on both processes and personnel.

The Interconnectedness of Process, Performance, and People

By breaking down operations into comprehensible elements and understanding the interconnectedness of process, performance, and people, business leaders can better navigate the complexities of today's volatile, uncertain, complex, and ambiguous business environment.

As the world evolves, so must operating strategies. However, strategy without execution is simply ideas without action. To continue delivering value amidst volatility, leaders must prioritise adaptability, not simply in their mindsets, but in their operations. This means building an organisation that is nimble enough to react and transform itself faster than its competitors.

Embracing dynamic management equips organisations to handle immediate disruptions and prepares them for the inevitable new challenges that lie ahead.

About the author

Peter Follows is an accomplished business executive, entrepreneur, and author. He is the co-founder of Carpedia International, a global management consulting firm that specialises in helping high-performing executives achieve lasting improvements in performance and profitability. Peter has extensive strategy, supply chain management, and operational effectiveness expertise. He has provided consulting services to organisations across North America and Europe in diverse industries.