History has taught us that no matter how well your company or country is doing, disruptive change can come fast and from unexpected sources. Natural disasters, economic collapses, leaps in technology and consumer megatrends are examples of such sources for rapid disruption. Eight billion individuals will be Internet-connected by 2020. Combine that with growing social gaps, global warming and exponentially evolving technology, the frequency of transformative changes are looking to intensify.
So, how well prepared are we really and what can we do to become more resilient? To find out, consulting firm KPMG, in collaboration with Oxford Economics developed the Change Readiness Index (CRI) and evaluated the preparedness of 90 countries. The index measures the ability to not only manage long- and short-term disruptions but also the ability to seize new opportunities presented during and after a transformative change occurred. Sweden scored in as second best in the world, only outranked by Singapore. USA didn’t make it to top ten.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
Then how do we protect a company? Your number one priority should be to make sure a strong corporate culture is in place. Your corporate culture helps to motivate you and your colleagues to get out of bed and go to work every day. It instills that feeling of belonging with the group and facing a common goal together. Keep in mind that the goal is never simply to make a profit. That’s a result. A strong culture will help keep professionals motivated through near-impossible marketing conditions and even transformational pivots between industries.
Your second priority should be not to ignore R&D. Even if you’re working with basic products and services, devote some resources to research and development around your fields of expertise. Who knows better than you what’s trending in your target audience? What could be the next big thing? What existing product or service could be combined to distinguish your brand from others? What social trends or technological breakthroughs could be coming soon? What outdated practices has unjustifiably become norms in your line of business? Find them and question them.
Historically it has proven remarkably difficult for successful companies to anticipate and adjust for, even obvious upcoming changes. Take for example the record industry where media formats have been shrinking and digitalizing ever since the LP. Yet its key distributers refuse to adapt to a new globalized smartphone-carrying audience.
“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.”
I believe it becomes more difficult for successful companies to nail a high readiness score due to a strong incentive from executives and shareholders to focus on low-risk short-term profits. A truly innovative and functioning R&D department therefore has to be financially and strategically separated from the rest of the company. Just like in food-nutrition and environmental-friendliness it’s tempting to make short term savings, yet we know we stand to gain a lot more by always thinking long term.