Creating Resilience Amid Supply Chain Disruptions

If there are disruptions in the supply chain due to natural disasters, geopolitical events, or other unforeseen circumstances, conversations may revolve around how to mitigate losses or maintain profitability despite the challenges. Throughout history, this usually involves considering price increases to offset increased costs or reduced supply. Two recent examples of supply change disruptions caused by very different circumstances are a company roll back on a commitment to antibiotic-free chicken and the collapse of a bridge that cut off access to a key shipping lane, impacting the supply of products including cars, colas, and tofu.

Too often, strategic conversations in the face of supply chain disruption (or any other major disruption) result in the reflexive response to maintain profitability through price adjustments or cost-saving measures. These conversations just might not be ones worth having. What if such disruptions in the marketplace are an opportunity to innovate, reinvent, or redesign to best serve the long-term success of the organization?  What if these disruptions are harbingers of things to come, warning us to slow down and explore how we can best organize for agility, complexity, and the good of the whole system, while still being financially successful? Now those are strategic conversations worth having!

Wondering how these two conversations would differ? Wonder no more…

Here are two fictional conversations to illustrate how conversations with a narrow focus on short-term profitability can lead to price increases, maybe even gouging, and how conversations that demonstrate a more holistic and values-driven approach foster positive outcomes for all involved.

Shifting the Conventional Narrative

Fictional Conversation with a Narrow, Short-Term Focus:

[The scene opens in a boardroom where company executives are gathered to discuss strategies for maximizing profits in the face of supply chain disruptions.]

CEO: Alright everyone, as you know, our supply chain has been severely impacted by recent events, leading to shortages in our key products. We need to discuss how we can offset these losses and maintain profitability.

CFO: One option we could consider is increasing prices on our products. Demand is high, and customers might be willing to pay more to secure what they need.

VP of Sales: I agree. Our competitors are facing similar challenges, so we have an opportunity to raise prices without fear of losing market share.

Legal Counsel: Before we proceed, we need to ensure that any price increases comply with regulations and won't expose us to legal risks. We'll need to review pricing laws and assess the potential implications carefully.

CEO: Of course, legal compliance is crucial. However, given the circumstances, I believe we can justify moderate price increases to protect our bottom line. Let's move forward with a plan to implement our “market-driven pricing” strategies across our product lines.

Fictional Conversation Fostering Positive Outcomes:

[A larger and more diverse group of executives convenes after participating in CWH’s Strategic Conversations Bootcamp to discuss a more constructive approach to addressing supply chain disruptions and ensuring the well-being of stakeholders. Their use of generative questions help stimulate deeper thinking and foster a culture of dialogue that leads to positive outcomes for everyone involved.]

CEO: Thank you for joining today. It's clear that our supply chain challenges are presenting significant obstacles, but I'm confident that by working together, we can find solutions that benefit both our stakeholders and the company.

VP of Sustainability: Before we dive into solutions, let's take a moment to reflect on our company's core values and how they guide our purpose and our actions, particularly in challenging times like these. How can we ensure that our decisions align with our purpose and commitment to sustainability, integrity, and social responsibility?

Chief Marketing Officer: Building on that, let's consider how we can leverage this situation as an opportunity to strengthen our relationships with customers. What strategies can we implement to deepen engagement, foster trust, and demonstrate our genuine concern for our stakeholders’ well-being?

VP of Community Relations: In addition to our customers, let's also think about the broader community impact of our decisions. How might we engage with local stakeholders, such as NGOs, government agencies, or community leaders, to co-create solutions that address shared challenges and advance collective prosperity?

CFO: As we explore potential solutions, let's be mindful of the interconnectedness of our supply chain and the ripple effects of our actions. How can we collaborate with our suppliers and partners to build resilience, share resources, and support each other through these difficult times?

Legal Counsel: Alongside our strategic initiatives, let's ensure that we're operating within the bounds of ethical and legal standards. What measures can we put in place to uphold transparency, accountability, and fairness in our decision-making processes, while also mitigating risks and safeguarding our reputation?

CEO: These are all important considerations. Our company's success is measured by financial metrics and by the positive impact we have on our stakeholders and the world we live in. By asking the questions that generate a mindset of collaboration and shared value creation, I believe we can navigate this challenge with integrity and resilience.

Putting it into Practice

Empowering a shift in the conventional narrative is about creating real value for all stakeholders. It’s about seeing hurdles as opportunities to reimagine our systems and values. What might be possible if the strategic conversations in your organization focused on innovating solutions, products, and services that prioritize agility, integrity, and collective well-being? These are the conversations that truly matter, where the seeds of genuine progress and lasting success are sown. Get started today! Use the questions from the conversation fostering positive outcomes and download our free Conversation Toolkit for more ways to shift the conventional narrative in your organization. 

Shared by Kelly Stewart: During two significant shifts in entirely different industries, I saw a few companies that bounced back and bounced forward, meaning they were successful and sought-after in their changed markets. They were led by people who were curious, compassionate, and confident. The Conversations Worth Having practices help to surface those innate qualities, and I encourage you to try them today.

Photo by Yan Krukau: https://www.pexels.com/photo/happy-colleagues-working-together-7793730/