The world in which most of us lead and manage is increasingly less robust and more unstable. Technology is changing faster than ever, bringing both threats and massive opportunities. Political and social forces are causing major changes, with migration, population pressures, multiculturalism, racial tension and the rising global gap between haves and have-nots impacting labour supply and consumer markets. A year ago, who would have imagined the UK would vote to leave the EU? Some economies are stagnating, their governments running out of policy levers with interest rates already at record low rates yet public and private debt at record highs.
Globalisation has brought many societal and economic benefits yet there is a dark side, with consumers in first world countries such as Australia enjoying products and services while being relatively blind to the slave and child labour that creates these things in developing countries.
…leaders in all sectors have a daunting task to plan and execute a long-term path to prosperity.
In Australia we have a precarious political environment, the government holding a slim parliamentary majority. With the mining boom over and many services and industries such as automotive being offshored in an increasingly high cost Australian economy, leaders in all sectors have a daunting task to plan and execute a long-term path to prosperity. Younger employees seem less loyal to employers than in the past, yet have higher expectations than ever before of employment contracts. Climate change threatens further instability for our important primary industries and lifestyle.
To successfully combat these mega-challenges, leaders and managers will require key capabilities and strategies. First and foremost is a combination of resilience and flexibility. The turbulent environment will require executives to be proactive in getting out in front of the wave, yet also be able to flex their business strategy as the wave changes direction or is overtaken by new and bigger waves. The best-laid strategies will need to be constantly reviewed in real time as the external environment of every organisation transforms.
Given that it will be a low-growth future for most industries, one or more of the following generic strategies may prove useful. Obviously, every organisation faces its own distinct challenges and has its own distinct opportunities
Strategy 1: Put the consumer/customer at the centre of the business
Most global markets are in oversupply, so competing for customers’ attention is getting harder. Only those who are fully customer-centric will survive.
Strategy 2: Reduce waste
Pursue lean operations and waste-reduction in every corner of the organisation. Most organisations waste 33 per cent of their resources. Big improvements are possible that will flow straight to the bottom line.
Strategy 3: Embrace innovation
New or enhanced products, services, processes – and, indeed, business models provide opportunity to defeat what will otherwise be stagnation and decline.
Strategy 4: Digitise and automate
Consumers now do everything on the phone. Procurement interfaces can be digitised to advantage the more effective use of real-time information will simultaneously reduce cost and improve service.
Strategy 5: Become an employer of choice
Leaders who win are good at empowering their employees, building trust in the workplace and achieving high levels of discretionary work effort in their workforce.
Strategy 6: Engage in sustainable development
To prosper in the long term, increasingly we will need to satisfy a range of stakeholders, emphasising the relationships our organisations have with the society we work in, the environment, suppliers, etc.
These strategies each involve a great deal of work and change. Perhaps the key question for each executive and organisation is to prioritise two or three for implementation chosen for ‘bang for buck’ maximisation, meaning the best options in terms of risk and return. Executives who assume they can avoid addressing these issues will be swamped by the tide of change. However, proactive executives will find ways to turn challenges into positive opportunities for their organisations.
Danny Samson is a professor of management at the University of Melbourne.