Due to a ‘perfect storm’ of economic, social and environmental factors, our business landscape is becoming more and more volatile.
The pace of change, too, is increasing. To succeed in business we must be agile, creative, alert, spontaneous and responsive – often operating in completely new ways. Today’s rapidly changing business environment calls for businesses that thrive in rapidly changing environments: businesses more akin to living systems. These ‘Firms of the Future’ can learn and adapt; they aren’t structured and silo’ed, which stifles learning and agility. These firms are also bottom-up, decentralised, interdependent, multifunctional, emergent, self-organizing units--not the centralised, top-down, hierarchically-managed monoliths of the 20th century.
Put simply, the business models and management approaches that served us well in the past, are no longer fit for purpose in a business context where dynamic change is the new norm.
Professor Michael Porter said a few months ago when addressing business leaders in New York: ‘The old models of corporate strategy and capitalism are dead. We are witnessing a paradigm shift from hurting to helping’.
Organisations that are able to ‘let go’ of old business paradigms, having the courage to embrace new ways of operating whilst dealing with the pressing short-term issues of today, shall be the ones who can weather the storm, adapting to seek out opportunities in these volatile times. Other organisations, fearfully clinging to practices that are no longer fit for purpose for the times within which we now operate, shall struggle to cope with the level of change ahead.
It requires great courage to break rank from a paradigm that is so ingrained in our business mindset; to transform in the face of pressing short-term pain.
The years ahead to 2020, in this Decade of Creative Destruction & Reconstruction, shall bear witness to the wheat being separated from the chaff - organisations who ‘get it’ adapting and evolving, and those that do not perishing or being acquired. Bold ‘Firms of the Future’ do not try and tightly manage change, they empower a culture of collaboration to unlock the creative potential of their own workforce, their partners and the communities they serve, initiating positive virtuous cycles of collaboration, innovation and value creation for all stakeholders. The result: more value, bigger margins and higher well-being.
As Dawn Vance, Nike Director of Global Logistics at Nike succinctly puts it:
‘Organizations have 3 options:
- Hit The Wall;
- Optimize and delay hitting the wall; or
- Redesign for Resilience – simultaneously optimizing existing networks whilst creating disruptive innovations and working collaboratively with partners’.
It is this ‘redesigning for resilience’ which drives the transformation from a Firm of The Past to a Firm of The Future.The Firm of the Future is one that:
- Drives transformation through values-based leadership and stakeholder empowerment using the catalysts of education, innovation, inspiration and collaboration;
- Encourages synergies across its business ecosystem, engaging with multiple stakeholders in an open, transparent way; where common values create connections enabling mutualism;
- Harnesses the power of social networks and the ‘pull’ media; uses crowd sourcing, co-creation, open source collaboration platforms and transparent branding for differentiation;
- Evolves ecological thinking for innovating and new ways of operating and generation value for every stakeholder within the community it serves; where waste equals food and nature inspires the people, processes and products.
The pressure for change is increasing all the time. Well publicised forward-thinking organisations are already making headway on their transformational journey – Unilever, Puma, InterfaceFLOR, General Electric, Patagonia, Procter & Gamble, John Lewis Partnership, and Marks & Spencers, to name a few. Visionary business leaders of today are already making the first steps on this transformational, emergent path for themselves and their businesses.
And it is a journey rather than a destination. Transforming towards a Firm of The Future is not about designing the right business model and implementing it, it is about understanding the ethos, ethics and environment that will allow the organisation, individuals and wider stakeholder community to best flourish, adapt and evolve. It’s an emergent journey, a journey that encourages diversity in approaches and outcomes, one where it is good to make mistakes, even fail, as it generates learning to move forward in a more resilient way.
Giles blogs at www.thenatureofbusiness.org. His book, ‘The Nature of Business’, will be reviewed on 2degrees when it goes on sale in September. Watch this video to find out more about the book and visit www.greenbooks.co.uk/natureofbusiness to pre-order your copy.