Business Management - How to Become More Flexible?

The issue of being flexible concerns both individuals as companies or organizations. It is a very extensive topic. To understand the basics about the issue, think about a personal topic, like the summer holidays. Have you already arranged everything or do you wait until the last minute. Flexibility is linked to choice and tradeoffs: A choice regarding time, money and features.

Managers often pursue a high level of flexibility because of the unceasing number of changes. Experience with much of these changes has lead to the idea that you cannot often plan, nor anticipate and the best thing to do is to change your habit of organizing in favor of a more flexible mode.

Here are some elements where flexibility will impact your organization.

Resource management. A flexible organization will think twice before “owning” resources. Ownership is what makes resources inflexible. Outsourcing is a known example where resources are no longer owned but still used by the company. Flexibility is therefore a mayor (non-functional) requirement for outsourcing. When outsourcing – you pay for the number of transactions ($ 1,50 per sent e-mail). This is flexible because when your business is facing a temporary downturn you automatically downsize your costs. Other examples are hiring contractors (in a call center) rather than attracting “own” employees.

Investment management Projects and investments provide another opportunity to become more flexible. Make sure that whatever project is time-boxed or otherwise controlled. Break up complex projects in short parts. Do not only make long term plans but analyze possible scenarios and reserve a war-fund. Spending all your money is the enemy of flexibility. Like a personal investor you should never be fully allocated. Disadvantage: more flexibility will lead to a lower return, but also to a lower risk.

Client management This is about organizing. The most flexible way of organizing activities is to decentralize your business process. Everything close to consumer demands and changing requirements can best be channeled locally. It is also the most expensive way to organize because you will not benefit from scale effects. Clients have local needs and speak a local dialect.

Product management To be more flexible, product management must be centralized and product design must allow exceptions (from the Client Management). This is where the flexibility-issue becomes conflictive. If a company chooses a limited diversity in products it will become less flexible (for the client – it is just not allowed) if it chooses too much exceptions its flexibility becomes unmanageable on the longer term.

Partnership More flexible solutions are those where you core product is part of a wider palette of products to provide a single solution to the client. The more partners and suppliers the more flexible but also at a higher price: your flexibility requirement implicates a higher risk for the partner which you will have to pay for.

© 2007 Hans Bool

Hans Bool writes articles about management, culture and change. If you are interested to read or experience more about these topics have a look at: Astor White or sign-up for our newsletter.

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