Why business strategists must expect the unexpected in 2015
It is vital for managers to introduce flexibility and new thinking into their organisations this year, writes a leading voice in the consultancy arena
A recent survey of MCA member firms revealed a lot of optimism about prospects for 2015. More than four out of every five firms said that they were either confident or very confident about UK economic growth in 2015, up from 66% just a year ago.
Yet beneath this buoyancy, many know there are risks as well. Growth is fragile, and our politics are fragmented; the Eurozone is troubled once more; conflicts in the Middle East and eastern Europe could easily bubble over; the UK remains over-dependent on the housing market and consumer spending for its growth.
Above all, we have been caught out by unforeseen trends. Who, in 2014, could have seen the drop in oil prices coming? Which pension companies were ready when the government announced the end of compulsory annuities? And who was prepared for the disruption of new digital technologies that are transforming consumer markets?
So, the first challenge for businesses is to be ready for the unexpected. In a way, that’s the new strategy. The best strategists in 2015 will be those who tell you that they don’t know what’s going to happen, but who are able to build flexibility and new thinking into organisations. Challenges and opportunities will arrive that no one knows about today.
Many of those will be digital. So the second challenge is to think digital. Don’t just do digital – still worse, don’t just give it to the IT or digital department. Bring digital into everything that you do and think about – and make sure that the board and executive leadership take ownership of that process.
The impact is being felt most obviously in retail markets, including banking. But we are now seeing the potential of digital to transform public services (it is our best hope for reducing the deficit and making government productive) and in how all organisations carry out their internal business.
Consumers are empowered by the opportunity to compare prices, interrogate suppliers and share their experiences. Citizens can access services and advice instantly. Companies are creating new products and services, and redesigning how they are delivered to their customers. Value is being destroyed and created, often seemingly overnight. And we are only at the beginning of this journey.
One area of transformation is the workplace itself. The digital generations are rising rapidly, bringing new attitudes to work, expectations of how it should be organised and ambitions for their own futures. Many of their more experienced colleagues may feel threatened or, conversely, complacent about what they offer. The best organisations will harness this new energy, use it to galvanise their own structures and methods and be ready for an age when digital natives will be calling all the shots.
Those two challenges – the unexpected and the digital – contribute to the third: brand and reputation.
Any organisation worth its salt knows that its reputation creates the opportunity to be successful. Take away trust, credibility and respect, and that permission to be successful is quickly gone.
In our age of constant public and media scrutiny – of increasingly intrusive regulators and populist politicians – business leaders must put investment in their brand and reputation first at all times. It is key, for instance, to attracting the best-qualified and most able people to work for the business.
The challenges are undoubtedly demanding. Many bosses are tempted by short cuts and compromises – and 2015 is likely to see some more companies fold because they gambled with their reputations or contradicted their brands. The best, however, know that those areas are sacrosanct.
Alan Leaman is chief executive of the Management Consultancies Association (MCA), the trade body for the UK’s management consulting firms
For more insights into how digital technologies are transforming businesses, sign up to the forthcoming CMI seminar Decoding the Digerati.