The global business consulting firm that styles itself "the leading authority on disruptive innovation" Innosight LLC has released key findings from its recently concluded survey of 800 executives from 20 industries across the Americas, Europe, Asia-Pacific and Africa. The survey was intended to gather their thoughts on the rapid and disruptive changes they expect to come the way of their respective markets, and how well they expected to respond accordingly.
Eighty-five percent of the executives surveyed said "that their organisation will need to transform itself-i.e. change core offering or business model-in response to rapidly changing markets...but fewer than half (42 percent) said they're confident their company is prepared for transformation within a five to 10-year time frame," said Innosight in a statement dated June 4, 2014. "At larger companies, ones with US$1 billion or more in annual revenue, even fewer (36 percent) were confident."
"Few organisations believe they're moving and evolving faster than the market of their competitors. Forty percent of executives (at 48 percent at larger companies) said their organisation is changing slower than the market, and 30 percent said it's changing at the same pace," they said. "A key problem [a lot of them appear to be facing in common: Company] growth plans [that] focus on [the] near term. Only 12 percent of executives said their company has a formal growth strategy with a five-plus year time horizon. The rest-88 percent-said their company either has no formal growth strategy or a short-term one."
"A root cause: no tools, will or process to plan and envision the future," they went on to say. "Sixty percent of executives said they don't use scenario planning or other strategy tools to identify trends seven or more years into the future. In fact, a third of executives said their company doesn't estimate or analyse the future either because the market is 'too unpredictable' or because they 'spend most of [their] time fighting fires'."
Managing Partner at Innosight Scott D. Anthony, who was on hand to comment on the findings being released, pretty much said that rapid and disruptive change is a constant and inevitable, and that companies that applied themselves to "transformational innovation" in tandem with their markets were most likely to survive and thrive through the next decade.
"On average, a company drops out of the S&P 500 list and is replaced every few weeks," said Anthony. "This musical chairs game is likely to speed up, given the apparent short-term focus of so many companies, coupled with the increasing onslaught of new technologies and competition from traditional and non-traditional players and the blurring of lines between industries."
"Transformational innovation takes time to pay off, sometimes as long as 5-10 years," he said. "Companies that invest in planning methods that help align senior leaders on long-term growth strategies are probably at a real advantage to develop new business models and open new growth markets."
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