Businesses around the world are entering 2020 after a decade of expansion and large-scale digital transformation, not to mention major changes and a polarised political scene. "There are many uncertainties and concerns: we expect political and economic volatility to increase, social unrest to grow and growth to slow further. Nevertheless, opportunities are in the air. Executives recognise that to seize them, they and their companies must be open to change," he stresses. Ramón BaezaManaging Director & Senior Partner of Boston Consulting Group.
Executives are increasingly in favour of such change, especially those whose companies are most poised to succeed in the next decade. The six key items on the agendas of top managers will be:
There will be no room for mediocrity
In the business world, fortunes are erratic. The speed at which a company goes from the top to nowhere has doubled in the last 20 years. The boldest CEOs react by managing the risk of going into losses (which involves resizing operations in declining businesses and maximising cash flow) while investing with determination where it really matters. Investing for success in new areas often requires widespread bets where focus, decisiveness and speed to scale are vital. Mediocre teams will have no place in the future.
Seek opportunities to change the rules of the game
The best managers try to glimpse what lies ahead. They look for cracks in big trends to spot opportunities and realise dramatic changes that have the potential to double, triple or quadruple the size or value of the company. Companies can use many techniques to identify opportunities: they can carve out their own future; innovate through a series of iterations and analyse patent data in detail. They can study in depth trends in the venture capital industry and what start-ups are doing, especially in less fashionable places such as the Greater Bay Area and Israel. Bold managers also look for certain types of acquisitions, for example, buyouts of loss-making or distressed businesses that could complement a strong company's portfolio.
All companies will be technology-driven, regardless of sector
Most companies must reorganise to take advantage of new human-machine opportunities, regardless of their sector. To be competitive in terms of speed, product and innovation, and to recruit and retain the most talented people in the market, companies will need to adopt a modular technology and data architecture at the back-end, combined with highly scalable processes and Agile teams at the front-end. We know of financial services companies that are digitising their mass sales and "relationship management through applications" businesses. Large industrial companies are working to become bionic and are creating units to develop software and technology platforms, while deriving value from their traditional assets. Let's face it: all companies will be technology-driven.
All business will remain people business
Integrating technology as an enabler is crucial for businesses in all economic sectors. But ultimately, it is people who will continue to make the difference. Transformation can only happen if the majority of the team is mobilised and empowered, data and technology specialists are brought on board, and the most talented employees are retained. At the end of the day, it will be the people who will have to rethink and remake all processes and business models. This requires motivated teams and a lot of enthusiasm: ensure that the company is a workplace that attracts and retains the brightest people, no matter how traditional or analogue the industry.
Be more flexible in organising and managing work
Too many companies do not know how to get rid of their old ways of organising work. They should all be quicker to reorganise work, exchange teams (and leaders) and validate developments quickly. Agile@Scale should be the mantra. The most successful companies are always making quick adjustments, rather than waiting and making big moves. Forward-thinking managers often ask themselves whether the company should own all its business units and functions. Perhaps you can be more agile, grow faster and increase profitability by spinning off certain operations and turning them into independent businesses that you invest in through private equity firms or other external sources of capital.
Being multi-local and defining a purpose that benefits society
Successful companies increasingly address local issues that are directly related to public policy and people's lives. Think of the tech giants and the vast amounts of data they hold, and how data protection issues put these companies at the centre of important and controversial political, legislative and social debates. The best companies will position themselves as local, empathetic and resourceful actors in societies and communities around the world. They will leverage their unique capabilities to help governments, institutions and civic organisations achieve social goals, in addition to pursuing their own business goals.
"In short, leaders who want to be ready to meet the challenges of the next decade must be quick to adopt a change mindset and approach, regardless of their current success," concludes Ramón Baeza.