1. the capacity to recover quickly from difficulties; toughness.
So, how’s the new decade going so far? Not as planned, I don’t imagine – but that is sort of the point. Without wanting to immediately mention a certain pandemic, one of the messages I want to hammer home in this article is that things rarely ever go according to plan – and a good business strategy is one that accounts for that inevitability. A famously wry phrase comes to mind: “the best-laid plans of mice and men often go awry.”
In our recent webinar co-hosted with Everest Group, Corporate Resilience: Practical Approaches and New Management Mindsets, I introduce Emergence’s framework for building resilience in the face of seismic challenges. With no shortage of uncertainties lying in wait, building the resilience to adapt our ‘best-laid plans’ to new and difficult circumstances is shaping up to be the defining business asset of the 2020s.
Pandemic aside, Brexit is still up in the air, a potential recession is dawning, climate crises loom, and in the financial industry, regulatory shifts such as IR35 and the transition away from LIBOR threaten to wreak havoc on contracts and risk management. The high-wire act of leading and scaling a successful business over the coming decade means staying one step ahead, not only of the competition, but of the next major catastrophe too.
Few could have predicted Covid-19, despite Bill Gates having warned us all five years ago. Business leaders may therefore be forgiven this time around for being unprepared.
The same cannot be said, however, for a second wave of the pandemic. Or for the effects of climate crises on supply chains, or for shifts in outsourcing patterns, consumer demands and workforce requirements. These are all elements that should now be factoring into executives’ long-term visions.
One of the fundamentals we can take away from the pandemic is that all the bright innovative ideas in the world will go to waste if a business fails to establish the resilience to weather storms of circumstance. What use is a five- or ten-year plan when it’s liable to be completely scattered by a bump in the road? The truth is that something will always get in the way of the ideal scenario, whether in the form of climate crisis, political upheaval, economic downturn or, indeed, virus pandemic.
The key, then, is to build the capacity to absorb these blows and adapt swiftly. Resilience must replace raw efficiency as the modus operandi of modern businesses. Much like the economy itself, companies can no longer keep pouring all profits into further growth, and cannot continue to work with zero-margin-for-error supply chains. Contingency planning is required. When the roadmap drastically changes, how resilient is your mindset and how adaptable is your business? How do you transition from short-term survival tactics to the long-term future-proofing and re-imagining of your organisation?
The onus falls on execs to overcome ‘analysis paralysis’ and embrace tech
Embracing technology should be a huge part of any business’ long term future-proofing plans. 52% of companies on the Fortune 500 since 2000 have either gone bankrupt, been acquired, or ceased to exist – most of them victims of their own failure to invest meaningfully in technology in the face of market disruption. This doesn’t mean businesses should welcome new tools hurriedly, uncritically and with open arms; it means diagnosing your opportunities and pain points, and defining a technological vision that can benefit your company and its stakeholders in profound ways. True innovation comes from mindset, not hardware, to quote IMD innovation professor Bill Fischer.
Are the majority of executives today really championing innovation as much as they could and should? Evidence suggests not. 65 percent of the senior executives surveyed by McKinsey were only “somewhat,” “a little,” or “not at all” confident about the decisions they make in this area. Another Deloitte survey tells us that less than half of executives are confident in their own ability to lead their organisation in the digital economy.
The businesses they are leading reciprocate this lack of confidence: a report from MIT Sloan found that less than 10% of respondents strongly agree that their organisations have leaders with the right skills to thrive in the digital economy.
Corporate leadership needs to be redefined to lay the foundation for a future-ready working culture. Executives need to set the tone, because studies show that when they do, sustained innovation follows. McKinsey’s sample of 600 managers and professionals indicated that the top two motivators of behaviour to promote innovation are strong leaders who encourage and protect it and top executives who spend their time actively managing and driving it.
Faced with a plethora of different technologies and possible strategic paths, however, executives could be forgiven for feeling paralysed by choice. Intelligent automation, Robotic Process Automation (RPA), Natural Language Processing (NLP), Machine Learning (ML), and Optical Character Recognition (OCR) are just some of those on offer, and each comes with a barrage of media hype. Do senior decision-makers understand these technologies and the opportunities and risks that they present? Do the majority of businesses have a vision for a digital future that empowers employees and thrills customers?
At Emergence, our mission is to help business leaders find the clarity they need to build strategies that reconcile short-term gains with long-term ambitions, and to build the resilience required to stay adaptable to the challenges presented along the way.
Sign up to our newsletter for regular insights about what it takes to build a resilient tech strategy.