Organizations and HR leaders in a DUSTy environment should adopt a CLEAN approach, says Cranfield School of Management’s Steve Macaulay and Professor David Buchanan.
Business crises have become more Dangerous, Unexpected, Sudden, Transformative - DUST.
Advance preparation is critical. When DUST hits the fan, it’s already too late, explain Prof David Buchanan and Steve Macaulay in this exclusive OpEd for UNLEASH.
Here is a CLEAN plan for operating effectively in this new environment.
We recently argued that organizations face events that can be Dangerous, Unexpected, Sudden, and Transformative. This differs from what has been described as a Volatile, Uncertain, Complex, and Ambiguous environment.
VUCA issues are still with us. But a DUSTy environment requires another level of response. This applies particularly to the transformative nature of our new context crises are also opportunities for change.
Ralabs is a small custom software development company, founded by Roman Rodomansky and Andrew Yasynyshyn in 2016 in Lviv, in western Ukraine.
They have 90 employees, with branches in Estonia, Netherlands, Poland, Portugal, and the United States. By 2022, annual revenue was US$3.4 million, growing at 25% per year. Teamwork, work-life balance, flexible hours, and remote working are features of the company culture.
What can we learn from Ralabs’ response to the situation in Ukraine? Their approach has five dimensions, which may apply to other organizations facing similar DUSTy crises.
These concern Contingency planning, Looking after your MVPs (Most Valuable People), Everyone in the loop, Adapting constantly to changing conditions, and Not wasting a good crisis.
Contingency planning:
Early in 2022, when The Russian Federation began moving troops to the Ukrainian border, Rodomansky and his partner started scenario and contingency planning. They developed four scenarios, based on different assumptions about Russia’s actions.
This could just be saber-rattling, to destabilize Ukraine’s government. Or they could annex part of Ukraine or capture a larger area (having annexed Crimea in 2014). Or it could launch an all-out attack.
A business continuity plan was developed from these scenarios. The plan identified key decisions, affecting staff and IT infrastructure, that would be triggered by different events. One scenario looked at the worst outcome – invasion, bombing, power outages, cyberattacks, data loss.
On 24 February 2022, Russia launched a ‘special military operation’, moving its forces into Ukraine, towards the capital, Kyiv. Ukraine was now at war with Russia.
Look after your MVPs:
When Russia invaded, about one third of Ralabs staff were already based in Poland and other countries. Assistance for more international relocations was planned. It is important to note that these steps were taken before the crisis unfolded.
The contingency plan included a budget for business continuity, international recruitment, a policy for staff evacuations, financial support for staff drafted into the army, assistance for staff doing voluntary work, emergency leave, and education programs in mental health, first aid, crisis management, and personal finance.
Staff were given backup electricity generators and a Starlink WIFI connection, and were encouraged to take rest and recovery time.
Sales initially fell, and Ralabs introduced cost cutting measures. However, they did not lay off any staff. Instead, salaries were frozen, and customers were asked for advance payment.
Everyone in the loop:
At the contingency planning stage, Ralabs spoke to their customers about how they felt about doing business with Ukraine.
Customers were impressed by the systematic continuity plan. They were understanding and supportive, and were guaranteed 24/7 rapid assistance from a specialist team of eight staff based outside Ukraine.
All were given weekly updates. Some customers switched to Ralabs from competitors in Russia and Belarus.
Adapting constantly:
Rodomansky emphasized the need for flexibility saying that ‘From the executive team to our junior employees, we were all ready to review our strategic and tactical decisions at any time, and we were comfortable adapting to changing circumstances as necessary’.
Not wasting a good crisis:
Ralabs transformed the way in which they did business. Customers were given a better service and their loyalty was secured. Staff were better supported. The business continued in highly adverse conditions. Distributed decision-making replaced top-down crisis management. The end of micromanagement reduced pressure on the top team.
This CLEAN approach was successful. Performance returned to 90% of prewar levels soon after the invasion began. Sales to existing and new customers were not affected. By mid-2022, management were exploring growth strategies, and started recruiting again.
They invested in learning and development, coworking office space, and a new marketing website. Staff turnover was low.
By early 2023, risks such as electricity and communications outages had become more predictable, and manageable.
In this CLEAN approach to managing through crises, the HR contribution is key.
Managing terms of employment and working conditions ensured that staff were safe and had adequate equipment, for remote working, and to cope with power outages. Staff working conditions (remote and flexible) were also key to maintaining continuity of customer service.
Training may be required to bring staff up to speed with scenario and contingency planning methods. HR also has a role to play in designing internal and external communication strategies. This is particularly important for how the business, its working methods, and its customer relationships are likely to change.
Ralabs invested in staff support and retention. Were the effort and expense justified? Hiring, onboarding, and training new staff is more costly and time-consuming than supporting existing employees, who are more likely to be motivated and to remain with the company.
Staff turnover also interrupts continuity of service to customers who value working with someone who understands their business through a prolonged association.
The business environment will not see less DUST in the near future. Organizations need to CLEAN up their act and be proactive in facing crises that have yet to occur. This means:
Contingency planning: anticipate potential crises
Look after your MVPs: invest, support
Everyone in the loop: transparent communication
Adapt constantly: to changing conditions
Not wasting a good crisis: use opportunities to transform and grow
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Learning development associate
Steve Macaulay is an associate of Cranfield Executive Development.
Emeritus professor of organizational behaviour
Emeritus Professor of Organizational Behaviour at Cranfield School of Management.
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