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Jun 28 2024

How to tackle business challenges: strategies for success, innovation and crisis

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This article introduces three fundamental systems that can help organisations navigate through both good and bad times: the success system, the innovation system and the crisis system. By understanding and using these systems, organisations can better prepare for future challenges and opportunities.

In today's fast-paced and unpredictable business world, companies face constant challenges to stay on course. Launching new products, facing a changing market or dealing with an unexpected crisis such as a global pandemic or delivery delays, requires flexible and effective strategies. Jörgen Forslund, with over 20 years of experience as a business developer, has seen what it takes for companies to flourish regardless of the situation.

This article introduces three fundamental systems that can help businesses navigate through both good times and bad: the success system, the innovation system, and the crisis system. By understanding and using these systems, organizations can better prepare for future challenges and opportunities.

 


 

Three systems of success: Success, innovation and crisis

 3 systems for success, and overview

Organizations can move between three main systems depending on their current situation and future goals: the success system, the innovation system and the crisis system. Each system has its unique characteristics and purposes.

1. The success system

This is the desirable state for all organizations. Here, the business is characterized by reliability, transparency and good communication. The management works visionarily and strategically. When an organization is in the success system, the goal is to maintain stability and long-term growth.

2. The innovation system

Sometimes situations arise where the organization's current products or structures are no longer competitive or relevant. Then the business needs to switch to the innovation system. Here, management works more operationally and focuses on developing new paradigms to restore and strengthen the organization's competitiveness. This may mean developing new products, business models or organizational structures.

3. The crisis system

The crisis system is activated when something unexpected and serious occurs that threatens the organization's survival. Examples of such events can be fires, pandemics, wars or technological breakthroughs that make the entire industry obsolete. In the crisis system, the organization focuses on adaptability and damage minimization, with an operational management that acts quickly to deal with the emergency situation.

Purpose and return to the success system

Both the innovation system and the crisis system have the ultimate goal of returning the organization to the success system. By managing crises effectively and innovating when needed, organizations can ensure that they continue to be successful in the long term.

Understanding and navigating between these three systems is critical to an organization's long-term success and resilience.

Let's go through the three systems in more detail and give some concrete advice on how you can succeed in your organization.

 


 

How the success system works: a deep dive

The success system is a fundamental part of every successful organization. It is about establishing and maintaining a stable and efficient business by focusing on reliability, transparency, communication and visionary leadership. Here is a detailed description of how the success system works, with a focus on tasks, individuals and leaders.

Job duties

Reliability

  • Role Fulfillment: Employees devote themselves to the tasks expected in their role, perform with high quality and quantity, plan and prioritize correctly and meet deadlines.

  • Knowledge and decision-making: They have the right knowledge for their work, make wise decisions in the execution of their tasks and follow rules, routines and instructions.

  • Resource Management: Employees conserve resources, are careful with equipment and are thorough in their work.

  • Quality assurance: They correct their own errors and mistakes, which contributes to a culture of continuous improvement.

Adaptivity

  • Flexibility and learning: Adapts plans and goals after changes, learns new methods and assimilates new skills that are offered.

  • Creativity: Switch tracks when necessary and let go of ineffective ideas, develop in new areas where their skills are not enough.

  • Knowledge Update: Keeps abreast of developments in relevant areas.

Proactivity

  • Streamlining: Streamlines their working methods and minimizes obstacles, points out shortcomings in routines and methods and suggests solutions.

  • Learning and sharing: Tries out new improved work methods, shares tips, feedback and lessons learned with others.

  • Curiosity: Is curious about and searches for relevant sources of knowledge.

The individual

Reliability

  • Strategic coordination: Individuals stick to agreed strategies, communicate clearly and coordinate their work with the team.

  • Respect and support: Shows appreciation, provides support to colleagues and managers, offers oneself and listens to others.

Adaptivity

  • Group Acceptance: Accepts group decisions, participates in and accepts new roles and responsibilities, finds himself redefining the group's mission.

  • Support and help: Stands for the failures of others, stands up for colleagues in tough times and mediates between employees who need help.

Proactivity

  • Information and lessons learned: Share information, suggestions for improvements and tips to others in the group.

  • Problemidentifiering: Points out deficiencies and problems in the work environment, initiates problem solving and collaborates to improve processes.

  • Environmental monitoring: Actively seeks new knowledge about industry trends and conveys this to management.

The leader

Reliability

  • Strategic focus: Familiarizes himself with the organization's mission and goals, follows regulations and guidelines.

  • Representation: Does good PR in external contacts and participates in organizational activities.

  • Cooperation: Collaborates with other parts of the organization.

Adaptivity

  • Adaptation: Adopts new guidelines and routines, acts in line with new strategies.

  • Communication: Is up-to-date on organizational decisions, endures bad conditions and seeks clarity in changing expectations.

Proactivity

  • Improvement: Addresses deficiencies and issues, collaborates with other departments to share lessons learned, and suggests internal improvements.

  • Environmental analysis: Actively seeks new knowledge about industry trends, raises questions about decisions that do not match reality.

Implementation in Practice

Successfully implementing the success system requires the organization to carefully monitor and adjust its processes, tasks and leadership styles. This can be done by:

  1. Clear routines and processes: Create and maintain clear routines and processes that all employees follow.

  2. Continuous education: Ensure that all employees receive continuous training and updating in their work areas.

  3. Follow-up and evaluation: Regularly evaluate work performance and processes to identify areas for improvement.

  4. Communication and feedback: Create a culture where open communication and feedback is encouraged and valued.

By following these principles, an organization can maintain a robust system of success, creating a strong foundation for long-term growth and sustainability.

 


 

The innovation system: the driving force behind change

When an organization faces challenges that require renewal and restructuring, it is time to move to the innovation system. This system focuses on creating new paradigms and strategies to ensure continued competitiveness and relevance. The innovation system is characterized by effective project management, analysis, creativity and tactical leadership.

Job duties

Reliability

  • Project methodology: Employees use effective project methods and base their decisions on accurate data. This ensures that innovations are carried out with high quality and accuracy.

  • Clear goals: They have clearly defined goals and prioritize their work to achieve these goals within established time frames.

  • Resource Management: Effective use of resources is critical. Employees plan carefully and use available resources in the best possible way.

Adaptivity

  • Environmental monitoring: Adjusts their plans and decisions based on continuous monitoring of the environment. They stay up-to-date on market trends and technological advancements.

  • Creativity and innovation: Encourages thinking outside the box and developing new ideas and solutions. They are willing to test new methods and adapt quickly to changes.

  • Competence development: Keeps abreast of the latest knowledge in relevant areas and develops skills continuously.

Proactivity

  • Improvements and streamlining: Actively searches for and suggests improvements to existing processes and methods. They experiment with new ways of working to increase efficiency.

  • Learning and Sharing: Shares learnings and insights with colleagues and encourages an open exchange of knowledge. They analyze their own work and constantly look for ways to improve it.

  • Curiosity and environmental analysis: Are curious about new technologies and methods that can benefit the organization and stay up-to-date on industry developments.

The individual

Reliability

  • Strategic coordination: Individuals follow clear strategies and plans, communicate effectively with the team and stay focused on the goals.

  • Respect and support: Shows appreciation for the efforts of colleagues, provides support to those who need it and contributes to a positive and supportive work environment.

Adaptivity

  • Openness to change: Accepts and adapts to new roles and responsibilities, finds himself in redefinition of assignments and actively contributes to the group's development.

  • Support and help: Accounts for the failures of others, offers support and assistance to colleagues and contributes to a culture of collaboration and shared success.

Proactivity

  • Sharing insights: Shares insights and suggestions for improvement with the group, identifies and addresses deficiencies and problems, and initiates activities to resolve them.

  • Environmental monitoring: Actively seeks new knowledge and trends within the industry and conveys this to the group and management.

The leader

Reliability

  • Tactical orientation: Leaders set clear goals and strategies for innovation, ensure that decision-making bases are correct and clear.

  • Communication and representation: Effectively communicates the organization's goals and vision both internally and externally, actively participates in organizational activities and collaborates with other departments.

Adaptivity

  • Strategic alignment: Adjusts strategies and plans based on new insights and information, is flexible and open to changing course when needed.

  • Updated knowledge: Keeps up to date on organizational and external decisions, adapts to new guidelines and routines and copes with uncertainties and changes.

Proactivity

  • Improvement and innovation: Encourages and leads improvement initiatives, collaborates with other departments to share insights and propose internal process improvements.

  • Environmental analysis: Actively seeks new knowledge about industry trends and technological advances, highlights important insights to the organization and acts on them.

 

Implementation in Practice

Successfully implementing the innovation system requires careful planning, clear communication and a culture that encourages creativity and flexibility. Here are some steps to effectively implement this system:

  1. Project methodology: Implement effective project methods and ensure that all decisions are based on accurate and up-to-date documentation.

  2. Continuous education: Give employees opportunities to develop their skills and stay up-to-date on the latest trends and technologies.

  3. Environmental monitoring: Regularly monitor the market and technological advances in order to quickly adapt strategies and plans.

  4. Communication and feedback: Create a culture of open communication where feedback is encouraged and valued.

By focusing on these aspects, an organization can establish and maintain an effective innovation system, ensuring that it remains competitive and relevant in an ever-changing market.

 


 

The crisis system: handling emergency situations with determination

The crisis system is activated when an organization is faced with urgent and serious situations that threaten its survival. It can be anything from pandemics to sudden technological changes that make an entire industry obsolete. In such times, the organization must quickly adapt, minimize damage and work efficiently to return to stability. The crisis system is characterized by clear crisis plans, quick adaptation and decisive leadership.

Job duties

Reliability

  • Crisis planning: Employees work based on a clear crisis plan that describes concrete measures to handle the current situation. They follow established procedures and ensure that critical tasks are carried out quickly and efficiently.

  • Prioritization: They identify and prioritize the most urgent and important tasks to minimize damage and ensure the continued operation of the organization.

  • Resource Management: Effective use of available resources is essential. Employees plan carefully and ensure that resources are used in the best possible way to deal with the crisis.

Adaptivity

  • Flexibility: Adapts its plans and actions in real time based on how the crisis develops. They are prepared to quickly change direction if new information or conditions arise.

  • Learning: They quickly learn from new experiences during the course of the crisis and adapt their methods and strategies to better handle the situation.

  • Competence development: Updates their knowledge and skills continuously to be better prepared to handle similar situations in the future.

Proactivity

  • Problemidentifiering: Actively searches for and identifies potential problems before they escalate. They take the initiative to solve these problems and suggest improvements to existing processes.

  • Communication: Shares insights and information with colleagues and management to ensure everyone is informed of the development of the situation and the actions being taken.

  • Environmental monitoring: Stays updated on external factors that may affect the crisis and the organization's ability to handle it.

The individual

Reliability

  • Strategic coordination: Individuals closely follow the agreed emergency plans and communicate effectively with the team to ensure a coordinated response.

  • Respect and support: Shows appreciation for colleagues' efforts under pressure and provides support to those who need it.

Adaptivity

  • Quick customization: Accepts and adapts quickly to changing conditions and new roles or responsibilities that arise during the crisis.

  • Support and help: Stands up for colleagues in tough times, offers help and support and contributes to creating cohesion in the team.

Proactivity

  • Sharing insights: Shares important information and lessons learned with the group to improve the joint effort.

  • Problemidentifiering: Actively identifies problems and proposes solutions and initiates activities to address them.

  • Environmental monitoring: Keeps abreast of relevant external factors and communicates this information to colleagues and management.

The leader

Reliability

  • Determination: Leaders show courage and determination by making quick and effective decisions to deal with the crisis. They follow the established crisis plans carefully and adapt them if necessary.

  • Communication: Communicates clearly and effectively both internally and externally, ensuring everyone is informed of the actions being taken and their roles in them.

  • Cooperation: Collaborates with other parts of the organization and external parties to coordinate efforts and maximize effectiveness.

Adaptivity

  • Flexibility: Adjusts strategies and plans based on new insights and information emerging during the crisis.

  • Updated knowledge: Keeps informed of all relevant changes and quickly adapts to new conditions.

  • Feedback: Takes in and acts on feedback from everyone regarding the results of the measures in order to continuously improve the efforts.

Proactivity

  • Improvement: Encourages and leads initiatives to improve crisis preparedness and processes. Collaborates with other departments to share insights and lessons learned.

  • Environmental analysis: Actively seeks and shares information about external factors affecting the crisis and the organization's response, and acts on these insights.

Implementation in Practice

Successfully implementing the crisis system requires strong crisis preparedness, clear communication channels and a flexible strategy. Here are some steps to effectively implement this system:

  1. Crisis planning: Develop detailed crisis plans that outline concrete actions for different scenarios and ensure that all employees are familiar with them.

  2. Continuous education: Provide regular education and training in crisis management to ensure that employees and leaders are prepared to handle crisis situations.

  3. Environmental monitoring: Continuously monitor external factors that may affect the organization and update crisis plans based on new insights and information.

  4. Communication and feedback: Create a culture of open communication where feedback is encouraged and valued, and where information flows freely during crisis situations.

By following these principles, an organization can establish and maintain a robust crisis management system, ensuring that it can handle emergency situations effectively and return to a stable state as quickly as possible.

 


 

The purpose of the innovation system and the crisis system

The innovation system and the crisis system are crucial when an organization needs to make major changes to return to stability and growth. The purpose of the innovation system is to identify and develop new business models, products or processes when the current ones are no longer competitive. Through creativity and flexibility, as well as tactical leadership, the innovation system helps the organization adapt to changing market conditions and technological advances.

On the other hand, the crisis system is activated when an organization faces urgent and serious situations that threaten its survival, such as a sudden delivery delay or a global crisis. The crisis system focuses on quick adaptation, decisiveness and effective action to minimize damage and ensure business can continue.

Both the innovation system and the crisis system have the ultimate goal of returning the organization to the success system, but with new goals and conditions that better match the changed reality. By successfully managing crises and driving innovation, the company can return to a stable and growing business, ready to face the challenges of the future with renewed strength and strategy.

 


 

Navigating Through All Three Systems Simultaneously

As a business leader, you may sometimes feel that your organization is in a unique situation where it operates within the success system, the innovation system and the crisis system at the same time. Some parts of the business operate stably and successfully, other parts are in an active phase of innovation to stay competitive, while some areas are in crisis or close to crisis. This can create a complex and challenging environment to manage.

It is important to understand the difference between pure innovation and the continuous innovation that occurs within a success system. In a success system, continuous improvements and incremental innovations occur as part of daily operations. It can be about refining processes, improving products and streamlining work flows. These improvements are often small and gradual, but they help keep the organization competitive.

A pure innovation system, on the other hand, is a more focused and intensive phase where the organization actively seeks new paradigms and radical changes. Here it is about questioning existing business models, developing completely new products or services and adapting to significant market changes. It is a time of high creativity and experimentation, where failure is seen as part of the learning process.

When it comes to dealing with problems and obstacles in a success system versus transitioning to a pure crisis system, the differences are significant. In a success system, obstacles and problems may arise, but they are often manageable within the framework of existing processes and routines. These problems are solved through continuous improvement and adjustment of work methods.

But when a situation becomes so serious that it threatens the survival or functioning of the business, the organization needs to switch to a crisis system. In a crisis system, quick and decisive action is necessary to deal with immediate threats. This may mean completely restructuring operations, implementing emergency solutions and reallocating resources to minimize damage and ensure survival.

For a business leader who feels that the organization is in all three systems at the same time, it is crucial to be able to identify and prioritize efforts based on the specific needs of each part of the business. Creating a balance between stability, innovation and crisis management requires clear communication, flexibility and strong leadership. By understanding the unique challenges and requirements of each system, you can better navigate your organization through complex times and steer it toward long-term success.

 


 

In conclusion: Here is a summary of relevant research and theories supporting these systems:

The success system

Reliability and routines:

  • Theory of organizational reliability (High-Reliability Organization, HRO): HRO research focuses on how organizations can maintain high reliability under varying conditions. This includes having strong routines and processes, which reduce the likelihood of errors and increase efficiency. (Weick, Sutcliffe & Obstfeld, 1999)

  • Lean Management: Lean principles promote standardization of work processes and continuous improvement to eliminate waste and increase efficiency. (Womack & Jones, 1996)

Transparency and communication:

  • Theory of psychological safety: Amy Edmondson's research shows that psychological safety, where employees feel safe to express ideas and concerns, promotes better communication and collaboration. (Edmondson, 1999)

  • Theory of organizational culture: Edgar Schein emphasizes the importance of a strong organizational culture that promotes open communication and information sharing. (Schein, 2010)

Visionary leadership:

  • Transformative leadership: James Burns and Bernard Bass describe how visionary leaders inspire and motivate their employees by clearly communicating a vision for the future and engaging them in achieving this vision. (Bass, 1985)

The innovation system

Creativity and innovation:

  • Theory of disruptive innovation: Clayton Christensen describes how organizations must innovate to remain competitive and avoid being outcompeted by new, disruptive technologies and business models. (Christensen, 1997)

  • Theory of open innovation: Henry Chesbrough introduces the concept that companies should use both internal and external ideas to drive innovation and growth. (Chesbrough, 2003)

Adaptability and flexibility:

  • Theory of Dynamic Capabilities: David Teece emphasizes the importance of organizations developing capabilities to quickly adapt to changing market conditions and technological advances. (Teece, Pisano & Shuen, 1997)

  • Agile methodology: Agile methodology and principles promote flexibility and adaptability by encouraging iterative processes and rapid response to change. (Beck et al., 2001)

The crisis system

Crisis preparedness and management:

  • Crisis management theory: Kathleen Tierney and other researchers in the field emphasize the importance of having clear emergency plans, training and drills to deal with unexpected and urgent situations. (Tierney, 2003)

  • Resilience engineering: David Woods and other proponents of resilience engineering focus on how organizations can build resilience and adaptability to deal with and recover from crises. (Hollnagel, Woods & Leveson, 2006)

Determination and leadership:

  • Situational leadership: Paul Hersey and Kenneth Blanchard describe how leaders must adapt their leadership style based on the demands of the situation and the needs of employees, which is crucial during crisis situations. (Hersey & Blanchard, 1969)

  • Theory of Distributed Leadership: James Spillane emphasizes the importance of leadership being shared among multiple people in the organization to manage complex and dynamic situations effectively. (Spillane, 2006)