By Prof. Vicente Falconi, founding partner of FALCONI
Throughout the year, the market changes, society changes, threats change, raw materials change, technology changes, people’s behavior and needs change… As a consequence, organizations or processes must change as well, but they don’t. And if they do, they perish due to the slowness of such changes.
Within companies and governments, there are entire processes, full of people and expensive equipment, taking up a lot of precious space and carrying out functions that are no longer necessary. We don’t appreciate changes and we drastically hold on to the means in which we are specialized and that demonstrate our apparent strengths. Police officers what more police cars and the health care system wants more hospitals.
We are just like that: we demand means without critically analyzing the ends. What are the ends? What are society’s needs? If the ends are not the same, if they are no longer necessary, then all the means – as numerous and sophisticated as they may be – simply translate into costs that do not add any value at all. On an annual basis, every organization must reanalyze its mission and investigate new needs, from which it can establish itself, and the needs expressed by clients and people.
Any organization (and consequently its processes and products – merchandise or services) must be redesigned on a periodical basis, bearing in mind its new function and the needs of the environment in which it lives (markets). This is the essence behind Innovation Management; organizations must innovate on a constant basis.
Our Armed Forces and intelligence organizations were designed and trained to face threats detected beforehand. Are we prepared to face new threats? Are we prepared to face the terrorism directed at new technologies? Are we prepared to face cyber attacks? Are we prepared to face diseases that spread quickly in a world with quick and intense traffic of people? And what about the changes resulting from global warming? These new threats are massive and unexpected.
Will our institutions, which were created in the past, be prepared to face a society with customs, technological resources, availability of weapons and international exposure that are very different from those that based their creation?
Changes are the essence of management – changes in structures and processes so that the new needs of the population can be identified and met with the lowest costs possible. At time, these changes are hard to carry out because they require leaderships with a public spirit and a statesman’s view. For example: we all know about the need to promote political reforms, tax reforms, social security reforms, etc.
Our institutions are outdated and the needs of the population have changed – they can no longer efficiently fulfill the role intended for them when they were first created. So Innovation Management, that is, the continuous readjustment of the institution, taking into account the needs of the population, ought to be on the list of priorities of all government officials, regardless of branch: Executive, Legislative or Judiciary.
We have been witnessing the restructuring of some companies, in which 40% of their existing structure was completely unnecessary! This structure was set forth in the past in order to fulfill functions that were necessary in the past. Those needs disappeared, but the structure remained, which took away the vigor and competitiveness of the organization.
Great technological advancements increased exponentially the speed of changes on a global scale, which also increased the dangers posed by threats, because the greater the technology level is the more concentrated power becomes in the hands of few. Such as New York, where a few men can eliminate thousands really quickly and dismantle the global financial system. This would be impossible 100 years ago, as there was no technology that made actions of such proportion possible. Nowadays, the world is much faster and more dangerous.
Technological advancements also provoke very fast changes for companies, which either adapt or perish. Some executives are surprised by fastness of all these changes, and when they realize it, there is no time left. Governments do not perish, but their inadequacy with regard to current needs may lead nations to poverty and despair. We have an example nearby.
Managing means achieving new results through constant changes in the organization. And that is why we, at FALCONI Consultores de Resultado, believe that promoting competent management is a mission for the noble, something that we embrace with tremendous dedication.
A good government, either from a company or a nation, will be one that manages to conduct their leaders to promote continuous changes through good management practices. Companies and nations that are prepared to face the rhythm of the changes deemed necessary to survive times like these will be more successful.
Text published in the february edition of O Papel magazine.