We were on a roll.
After a few painful quarters of inventory shortages, our supply was now on par with demand, right on time when the sales of our latest devices were reaching their highest point ever.
The situation was under control – or so we thought.
When the market dynamics suddenly changed and demand for our devices plummeted, we stayed confident in our ability to effectively course-correct.
After all, didn’t we have world-class guidelines, audits, processes, and operations management to succeed in any scenario?
We were in for a nasty surprise!
Long lead times on some components trapped us in commitments from which we took a while to disengage. We underestimated what was at stake and repeated the same mistake month after month.
Our inventory liability had grown to the equivalent of multiple years of business on most models, and we never fully recovered.
How did we move so dramatically and quickly from scarcity to excess inventory? Why did we keep repeating the same mistakes?
One could argue that the complexity of our processes and a lack of agility and transparency contributed to this.
Yet, many businesses repeat the same mistakes despite regulations, guidelines, audits, improved processes, and managerial oversight.
I get it. Sometimes, unforeseen external factors are just too extreme. Market fluctuations, geopolitical events, natural disasters, or global health crises can wreak havoc on even the best operations and processes.
But what about these internal forces that we can theoretically control?
Does human error doom us despite the best intentions and thorough training?
How can we tackle the complexity inherent to modern businesses’ operations?
There’s not one single magic recipe for success, but here are a few tips I’ve learned from my general management years that carry some universality:
Nurture the Right Culture and Attitudes
Company culture shapes behavior and decision-making. Mistakes are more likely if the culture prioritizes speed over accuracy or if leadership pressures teams to cut corners to achieve targets or deadlines.
Build Effective Implementation
Even with well-designed processes and guidelines, the effectiveness of these measures depends on their proper implementation. Mistakes will slip through the cracks if teams don’t fully understand or adhere to new procedures or lack oversight to ensure compliance.
Ensure Sufficient Resources
Sometimes, companies may need to allocate more resources (financial, human, or technological) to support effective risk management and error prevention. Adequate training, up-to-date technology, or the right staffing level will greatly increase the likelihood of success.
Don’t Be Complacent
In industries where regulations have existed for a long time without significant changes or enforcement, complacency can set in. Teams may become less vigilant or rigorous in adhering to guidelines, assuming such processes are sufficient to prevent errors. The golden rule is never to assume!
Learn from Past Mistakes
Organizations may need thorough post-mortems or root-cause analyses even when mistakes occur. Understanding why the error happened and how to prevent similar issues in the future is paramount. Without learning from past mistakes, companies are doomed to repeat them.
I acknowledge that all this has to be done in increasingly complex environments with intricate processes, diverse stakeholders, and rapidly changing technologies.
Mastering this complexity requires significant effort and resources.
Yet, I’ve seen teams succeed when they could address all the different facets: building a culture of continuous improvement, staying adaptable in the face of change, investing in employee development, and maintaining a commitment to learning from failures.