While the pace of change in the business world has increased in the last five years, many businesses report that the time it takes them to make key decisions is also increasing.
Game changer, an Economist Intelligence Unit report sponsored by Progress Software, explores the ways in which global businesses are responding and adapting to this fast-changing business climate. A global survey conducted for the report revealed, not surprisingly, that most businesses (79%) recognise it is important to respond quickly to changes in their operating environment, which many attribute to factors such as the volatile economic climate (39% of respondents) and increased competition (36%). However, one-half of businesses (48%) think the amount of time it takes them to make key decisions has increased. Only 22% say that it has declined.
For many businesses this means that their internal strategy processes are not designed to handle the speed of a rapidly evolving external environment. Just as concerning is that less than four in ten (39%) of surveyed executives believe that their firms are making the right decisions about how and when to respond to change.
“If you are in an environment that is changing faster and faster, it means you have to make more calls and start experimenting,” says Rolf Bixner, senior partner and managing director of the Boston Consulting Group, in the report. “You need to fail fast, fail quickly, and fail cheaply.”
While disruptive innovations can bring companies to their knees, they can also be a source of rapid growth. “The world is now so full of unexpected, surprising changes that companies today must either disrupt themselves or be disrupted,” says Hal Gregersen, senior affiliate professor of leadership at INSEAD.
Other findings from the report include the following:
- Cultures will need to adapt to faster and more disruptive change. In an increasingly interconnected and competitive world, the probability of disruptive change will continue to grow. But organisations and employees tend to have a bias toward the status quo. Leaders need to come up with ways of counteracting internal resistance to change.
- Leaders need to be willing to conceive multiple futures and embrace uncertainty. Scenario planning and other long-term risk management techniques have become more widely accessible to help companies think through how the future might evolve, but few companies utilise them.
- Setting up a new division can help manage disruptive change. Some executives advocate the establishment of an entirely new unit designed to capture the opportunities emerging from a newly identified change. This can be separated from the rest of the business, which can be migrated to a lower-cost model where it can compete more effectively.
Game changer: How companies are responding to a fast-changing business environment
is available for download at:
http://www.businessresearch.eiu.com/game-changer.html
Press enquiries:
Joanne McKenna, Press Liaison, +44 (0)20 7576 8188; joannemckenna@eiu.com
Chris Webber, Senior Editor, +44 (0)20 7576 8239; chriswebber@economist.com
About the research
These findings are part of a research project conducted by the Economist Intelligence Unit and sponsored by Progress Software. The findings are based on a survey of 390 business executives conducted in August and September 2011. Respondents were drawn from a range of industries and locations around the world. To complement the survey, in-depth interviews were also conducted a range of experts and senior executives.
About the Economist Intelligence Unit
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com or follow us on www.twitter.com/theeiu
The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.
About Progress Software
Progress Software Corporation is an enterprise software company that enables businesses to be operationally responsive to changing conditions and customer interactions as they occur. The company offers a comprehensive portfolio of enterprise software spanning event-driven visibility and real-time response, open integration, data access and integration, and application development and deployment. Progress can be reached at www.progress.com or +1-781-280-4000.
