Burning Platforms and How to Prevent Them

A proprietor who sells electrical products was experiencing a dramatic drop in sales.  He hires a consultant who comes from a large multinational corporation and asks him what can be done. 

The consultant suggests that the proprietor develop a vision, mission, objectives, and strategies (VMOS) for his business.  The consultant conducts a team-building session with the proprietor and his staff and for several days, they draft and formulate a VMOS.  When they finally finish with a fancy-worded VMOS, the consultant presents the VMOS to all the employees and stakeholders.  When the consultant went to collect his fee, the proprietor asks the consultant, “so when are we going to talk about my falling sales?” 

The phrase, “burning platform” takes its origin from a story about three (3) men on a North Sea oil rig that was on fire.  Two (2) men decided to jump into the icy waters while one (1) man opted to stay.  The two (2) men who jumped were badly injured from their fall but rescuers were able to save them.  The man who stayed on the platform died.  Management consultants have cited this story as a lesson that when faced with an urgent crisis, one should take risks and go for deliberate change.  Otherwise, if one does nothing, the business dies. 

The proprietor of electric relays was on a burning platform; his business was on fire in the form of falling sales.  The clueless consultant he hired didn’t address the urgency of the problem.  The consultant focused more on what he was good at from being an executive at a multinational. He ignored the crisis happening to the proprietor. 

Many managers complain about frequent “fires” that disrupt their daily routines and preoccupy their time and resources.  Some executives cite a variety of reasons for these “fires,” from lack of leadership to poor discipline.  The executives would form committees, hold strategy meetings, scold managers for poor judgment, or blame poor discipline among rank-and-file employees.  Whatever they prescribe, these executives would miss the point that there’s a crisis that urgently needs to be addressed.    

Crises, like burning oil platforms, don’t just go away.  True, a fire may burn itself out, but even if they did, they’d leave a lot of damage.  When there’s a fire, everyone either runs to put it out or runs away.  No person in his right mind would just sit there idly by and get himself burned. 

Unfortunately, many executives don’t know a crisis even if it’s raging in front of them.  It’s what we would call denial, a reaction inherent in human nature.   We deny and ignore a crisis to believe it is not happening, that there can’t be a threat. 

Most of the client firms I’ve diagnosed have burning platforms.  Some are big, some are small; but urgent crises nonetheless that disrupt operations, reduce sales, increase costs, and cause other problems.  Burning platforms are often fast-moving fires that eat away the insides of a business and challenge the cores of an organisation.

Managers of course need to address burning platforms.  The key is to know that there is one.  Sometimes, managers, especially high-level executives, don’t realise they have one.  The following are situational examples of burning platforms that executives sometimes ignore until it’s too late: 

  1. Treasury managers pointing out critical cash-flow balances and immediately urging field sales personnel to collect receivables from customers;
  2. Manufacturing managers alerting purchasing executives that their raw materials are running out because vendors didn’t deliver as scheduled;
  3. Logistics managers facing a shortage of trucks as senior marketing executives complain of empty supermarket shelves where new products are supposed to be;
  4. Information system contractors alerting the firm’s chief information officer (CIO) that the company’s data centre’s room’s air-conditioning has broken down and the IT system is in danger of shutting down. 

What should an enterprise do about burning platforms?  Put them out, of course.  What would it take to do it?  Everything that one can muster.  It is a fire!

  • One does not ignore a fire.  One works to put it out now and until it’s out;
  • And when we say out, we should mean really out, to the extent that whatever caused it won’t ignite again.  

The best solution against burning platforms is preventing them in the first place.  The means to do that is usually via having relevant and effective monitoring systems and risk management measures

It starts with having plans and policies that consider potential risks and include contingencies.   

These plans and policies should answer questions like:

  • What to do when customer collections are falling behind?
  • What’s the inventory policy when raw material stocks are running low?
  • What’s the plan when projections show not enough trucks next week to deliver orders?
  • What’s the backup plan in case the Internet server crashes? 
  • Who will take over, work from home, or substitute when members of staff are found to be infected with the CoVid-19 virus? 

Any plan or policy should have pre-approved procedures against pre-defined crises such that the organisation can immediately take action without having to go through time-consuming justifications to top management.  Of course, managers should always notify executives when a crisis is imminent and action should be taken. 

Common sense dictates that when there’s a burning platform, we either try putting it out or run for safety.  Sometimes, however, we deny there’s a burning platform crisis and we go about our business until we and our enterprises are consumed. 

Recognising the existence of a crisis is important but prevention is key to avoiding any crisis.  Plans and policies that take into account potential risks, build in contingencies, and allow immediate pre-approved action would help a lot in keeping any new crisis from getting too big if not stifling them at the start. 

We should never sit idly by when there’s a crisis and even if there isn’t one. 

About Overtimers Anonymous

Managing Multiple Risks

Threats of fire, natural disasters, and supply chain disruptions don’t take breaks.  They don’t necessarily come one at a time.  Risks are mutually exclusive.  They can occur simultaneously. 

Ongoing threats make our lives complicated. We are constantly stretching resources to keep workplaces and homes safe and secure from risks.  We need to always consider that bad things may happen never mind if we have fewer people to count on and less time to allocate. 

Individuals make up organizations and each individual has his or her special role that contributes to the collective success of the organization.  It is in our individual role that we also anticipate, mitigate, and manage the particular risk that each of us would first encounter. 

  • It is the information technology expert who updates software security to protect against cyber threats;
  • It is the engineer who designs facilities for adequate protection against fire and earthquakes;
  • It is the technician who conducts preventive maintenance to minimize unscheduled equipment shutdowns;
  • It is the security officer who sees to it that offices and personnel are protected;
  • It is the human resource professional who checks on the morale and health of employees.

If all of us do our part, we keep risks at bay.  Not just one risk.  But all risks.  Even if they come all at once. 

About Overtimers Anonymous

The World Needs Supply Chain Engineers

Not leaders.  Not managers.  Not business executives.  We have plenty of leaders, both real and wannabes.  Managers and executives too; we have enough. 

We need supply chain engineers. 

The global supply chain is a present-day 21st-century reality.  We get much of our goods from all over the world.  We buy shoes from Europe to sell in America.  We ship rice to Australia and import minerals in return.  We travel to trade and we negotiate with our tablets and mobile phones. 

E-commerce has expanded the reach of supply chains.  We order and pay via the Internet.  More and more enterprises deliver door-to-door, business-to-business, person-to-person.  Transportation’s new normal is multi-modal: airplane-to-van, van-to-vessel, vessel-to-truck, truck-to-motorcycle.  Ordinary people ferry food and merchandise to homes as much as courier companies deliver packages to businesses. 

There is so much room for improvement that supply chain management has become a high-profile career choice.  But this is not a promotional message for supply chain management; this is a call for action.  Supply chains are facing challenging adversities and supply chain management, as is, is no longer capable to deal with them. 

Supply chain engineering is the “application of scientific and mathematical principles” for the design and synchronization of highly complex supply chain operations.  It is a field the world needs to synchronize supply chain operations and networks.    

It’s not only because supply chains have so much room for improvement.  It’s also because adversities have become too significant to ignore.  The adversities, which some may classify as supply chain risks, are real. 

Adversities in recent years have caused plenty of pain to supply chains.  They’ve disrupted transport, caused shortages of critical raw materials, and brought widespread inefficiencies.  As much as they’ve been manageable, the adversities are not getting any fewer.  In fact, they’re getting more disruptive and threatening.  To an extent, they can shut down supply chains and cause not only economic failure but also society chaos.  The most prominent example of this is the COVID19 virus pandemic. 

Just as we need doctors to deal with disease, we need engineers to deal with supply chain disruption.  Management as a profession and talent is no longer enough because management is only about planning, organising, directing, and controlling.  We need engineering, that is, we need to have people with skills to design and install systems, networks, and methods to synchronize and integrate the various supply chain operations and make them adversity-resistant. 

We need problem solvers that can define problems before they happen.  Anticipating adversity and mitigating it, if not overcoming it, are the key tasks of the supply chain engineer. 

Where can we find supply chain engineers? 

They’re closer than you think

Where are the Supply Chain Experts?

Supply chain managers are noticeably invisible amid the COVID-19 crisis.

There have been no supply chain executives standing beside national leaders as they made speeches and announcements.

There have been rarely any interviews with supply chain experts about how to deal with shortages of food and difficulties in transportation.  If there were, much of whatever was said had been largely ignored.  

A lot of people have viewed the coronavirus disease, COVID-19, as a medical problem requiring a medical solution, i.e., hospitalization, quarantine, finding a cure.  As much as it is a medical issue, it is more of a problem that needs a social solution. Such a solution needs four (4) things:

  1. convincing everyone to re-align their lifestyles to that of good hygiene, sanitation, avoidance of unnecessary travel & physical contact, and healthy living;
  2. rapid segregation and isolation of suspected infected individuals;
  3. boosting capacities of facilities and mobilization of medical personnel;
  4. synchronising supply chains to stockpile and deliver inventories of essential items such as medical equipment, parts, supplies, food, water, fuel, and other essential goods.

Many countries did the first two, (a) & (b), many are scrambling with difficulty to do (c), and as for (d), it has been a nightmare of shortages and desperation. 

Supply chains are overwhelmed amid the COVID-19 pandemic.  Business firms and organisations are fending for themselves.  There is no united front, no coalitions formed.  There is no high-profile leadership to rally the logistics and manufacturing industries.  Countries aren’t cooperating with each other; how could one therefore expect enterprises to do the same? 

Despite the strides in bringing supply chain talent to corporate board rooms, many executives both in business and government have not engaged the supply chain professionals in the fight versus COVID-19.  Instead, the supply chain experts are relegated to the side-lines, sweating away somewhere untying bottlenecks and moving merchandise as fast as they can to where they are needed the most.   

Many enterprises only see supply chains as networks working within the boundaries of their respective businesses and not as continuous lines of flow of materials and merchandise that cross from one enterprise to another as they accumulate in value from one point to the next: from mines & farms, to factories & warehouses, to stores & e-commerce cross-docks, and finally to users & consumers. 

As much as executives may justify confining supply chain management within imaginary boundaries as a means to foster their respective enterprises’ competitive advantages, there is great potential in designing supply chain systems and networks that synchronise the streams of products, information, and capital from the sources to customer’s shelves. 

This is made more apparent with supply chains becoming more vulnerable to adversities such as COVID-19. 

Adversities are those that disrupt the routines and flows of operations, particularly supply chains.  Adversities come in different forms, degrees, shapes, and sizes.  They are never the same from one to the next (similar, maybe, like with typhoons but different in that typhoons never follow the exact same path with the exact same intensity of wind & rain).

Because supply chains have stretched themselves to the four corners of the world, they have become more susceptible to varying adversities.  Global supply chains are spread thin; their links ever more sensitive to disruption and change.

As supply chains have become global, supply chain management, however, has remained local.  As mentioned, enterprise owners are reluctant to collaborate and link with vendors and customers for fear of compromising their competitive positions.  Hence, there’s no overall organized effort to synchronize because there’s no strategy or structure for such in the first place. 

The COVID-19 pandemic has shown that supply chains can’t function productively without synchronisation.  And it has also shown that societies suffer when supply chains become adversely unproductive. 

How do we synchronise supply chains to make them if not keep them productive? 

The answer is not in management.  It’s in engineering

We Need a Playbook and It’s the Last Thing We Need

Many enterprises and countries around the world have playbooks to deal with pandemics such as COVID-19.  These range from ISO standards and those based on the United States’ Occupational Safety & Health Administration (OSHA), Center of Disease Control & Prevention, and even the US Army Medical Research Institute of Infectious Diseases (USARMIID).   

But as much as present-day playbooks may have protocols for pandemics, they don’t have any for supply chains.  Enterprises and governments may have response plans such as quarantines and allocations of resources for medical facilities & personnel; there wouldn’t be any, however, for cross-border supply chains.

Why is that?  Because global supply chains have become prominent only in recent years.  Governments and many enterprises still manage supply chains as if they exist only within their borders and factories. 

Global supply chain relationships are mostly in the form of contracts with vendors and 3rd party providers.  Most of the links, from the sources, to the transportation, to the storage & deliveries are siloed, that is, they’re autonomous and overseen separately.  Collaborations and interactions are mostly done between individual representatives such as between sales agents and purchasing personnel. 

With no real connection, there is no protocol, and therefore no synchronisation that can overcome widespread disruptions from adversities such as what has happened from COVID-19.  Every link on the supply chain is actually vulnerable to whatever form of adversity, more so a global pandemic.

If enterprises can synchronise (some people call it integrate) their supply chains, then there would be a united front versus any adversities.  Enterprises would be able to adapt together.  Goods would keep moving.  People will get their products.  Economies would remain stable.    

Playbook protocols and procedures, however, are the last thing supply chains need.  Synchronising supply chains requires several things first: 

  1. Management commitment;
  2. Establishing comprehensive policies and strategies;
  3. Setting objectives and performance measures;
  4. Designing structures and systems to support the strategy;

Many enterprises have embraced (1), (2), and (3).  Many have not been fully successful with (4).  This is because many enterprises have trouble finding the talent to do (4). 

Doing (4) is an engineering effort.  It requires talent that will be sought for because before enterprises can sync their supply chains, they’ll need to engineer their networks to establish the links. 

Only then can enterprises rewrite their playbooks and prepare for the next pandemic and whatever adversity that comes their way. 

Why Weren’t We Ready for COVID-19 and How Should We Have Been?

The COVID-19 disease is the latest adversity to hit our world and it’s the worst yet.  It also should be the last in how we deal with adversity because how we’ve been dealing with adversity has just been outright awful.   

COVID-19 started late December 2019 in China and had spread around the world three (3) months later.  People got sick, nations closed borders, supply chains stopped moving, and businesses slowed if not closed shut. 

Many organisations had no playbook, protocol. or contingency plan, to deal with COVID-19.  Many measures taken were akin to knee-jerk reactions.  We just weren’t ready.  And we should have been. 

Adversities are part and parcel of enterprises and society.  We encounter them all the time.  From natural disasters to daily traffic, adversities come in all scales, shapes and sizes.  And they always differ one day to the next. 

Organisations develop risk management strategies to combat adversities.  Risk management just has not been effective, however, as many organisations don’t treat risks as high-profile priorities, that is, risks are considered important only when they turn into threats or problems. 

For instance, a company would invest in fire safety equipment and delegate a safety officer to monitor compliance to prevent fires.  But executives would prioritize reports and presentations on issues such as sales, costs, and customer service.  Managers wouldn’t ask about fire safety reports unless there was a fire. 

Risk management also has traditionally been limited in scope such as to security, safety, and secrecy.  It wouldn’t include adversities such as unexpected price increases in commodities, sudden imposition of tariffs, the surprise inability to collect from a customer, and diseases—these would be the responsibilities of respectively different departments and they wouldn’t even be called risks. 

The COVID-19 pandemic offers us the lesson that what we’ve been doing in terms of adversity mitigation has simply just not been enough.  We need to change how we anticipate and mitigate adversity.  We should start by saying that it is not risk management but adversity management, that is, we treat adversity with wider ranging scope and priority. 

It requires a change in mindset.  Adversity is not risk.  It’s a whole different category that encompasses risk.  We need to realize we have become more vulnerable to it.  How we’ve dealt with it in the past and with COVID-19 hasn’t been the right way; we need to formulate a new right way. 

If we didn’t get sick from COVID-19, we should at least be sick and tired of how we responded to it and to all the adversities beforehand.  We need a new approach, because not only can we will be able to save lives, we will be able to save our livelihoods.