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Three megatrends could make or break your business this decade

January 21, 2020

The 2020s will be a transformative decade for the business enterprise. The forces reshaping our world will challenge many business orthodoxies and interrupt long-term plans at the same time that society’s expectations of business are expanding.

Signs of this ongoing evolution are all around us—with the emergence of an open talent economy, the unprecedented pace of tech-driven innovation across all industries, and an active political debate around the obligations of business to fulfill a broader social purpose than profit maximization.

Stepping back from individual shifts and putting them in context, three longstanding trends appear to be driving and accelerating the evolution of business and economic fundamentals. These secular trends are reshaping what the future enterprise will look like, the role it plays in the economy and society, and what it will take to thrive in the long term.

1. Transformative technologies augment human talents.
Human beings have always developed tools to augment work, but the technology we now have at our disposal is enabling the creation of capabilities that are orders of magnitude more powerful than anything we have seen previously. Having automated routine cognitive work, technology has now meaningfully entered the previously underdeveloped arena of non-routine cognitive work, where human analytical and problem-solving skills predominate. This augurs seismic change, as AI extends to augmenting human decision making in such diverse areas as business, law, healthcare, and government. Within the enterprise, non-routine AI will likely disrupt nearly every role and function, while elevating the relationship between human and machine.

2. Ecosystems stitch together the best capabilities of multiple enterprises.
The last round of globalization brought disaggregation in the form of sophisticated supply chains. More recently, efficiencies around information flow and business transactions have allowed companies to leverage assets and resources without owning them. New forms of collaboration already enable organizations to deliver custom-built solutions by pulling together best-in-class capabilities from different entities in a seamlessly integrated fashion. This is just an early glimpse of how organizations may capture value as significantly enhanced connectivity and digitization usher in the new era of ecosystems; and ecosystems will reorient the marketplace. To participate and thrive, organizations will have to reimagine borders and business models, clearly defining the opportunities to co-own, co-create and co-evolve over time.

3. Technology enables greater customer centricity.
Today’s digital tools enable companies to gain insights into customers’ buying preferences and their social spheres, while social media and other digital platforms allow customers unprecedented influence over the design, production, and improvement of goods and services. On a macro-level, the co-creative energies these technologies have unleashed are starting to reorganize the economy around some of our truly fundamental human wants and needs: mobility, health and wellness, learning and personal growth, money and value exchange, and accessible, sustainable energy. As these human-centric ecosystems emerge, the relationship of business, technology, and society will dramatically reset.

The Road Ahead
Bill Gates famously said in 1997, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” Several decades in the making, the megatrends described above point toward a radically transformed business landscape by the time this new decade is done. What should CEOs do to prepare? How can you both lead in the more recognizable world of the next two years and position your organization to thrive past the next ten? A few thoughts to begin the conversation:

1. Re-invent and re-invest to grow. Many companies today are looking at the uncertain economy and thinking about efficiencies and cost take-out. This is not wrong—you can’t grow long-term if you aren’t viable short-term. But it is incomplete—you can’t grow long-term if you are not making informed long-term investments. With change happening so fast, companies focused myopically on cost at the expense of reinvestment may be caught flat-footed.

2. Sense the shifts and create optionality. Sensing capabilities allow you to detect where the shifts in your industry are happening. Using this information, leaders must build and manage a portfolio of strategic options. This is the classic strategy paradox: you can’t predict what will happen, you may not be able to adapt fast enough, and you have to make commitments today with incomplete information. The answer is creating optionality—preparing yourself for different futures that may play out, and then over time, doubling down on what is working well and diminishing what is not.

3. Focus on delivering value to stakeholders, and the returns will follow. Companies that pivot successfully through disruption not only tend to have discipline around the execution of their long-term strategy, they can articulate a compelling sense of purpose and values. When businesses are deliberate about prioritizing purpose beyond profit and are effective in how they serve a broad cross-section of societal constituencies—employees, suppliers, vendors, and communities—results that favor the bottom line will be a logical outcome.

Leading the enterprise forward requires conviction in the tremendous opportunities that lie ahead, while at the same time recognizing that even the best laid plans will require constant adjustment as the complex external landscape evolves. And this is where leadership really counts.

By Joe Ucuzoglu

Source: Chief Executive

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