Whitecap worked with a leadership team of a professional services firm on their business strategy last year. In December, I was asked to present a brief ‘scene setter’ at their strategy launch reflecting some personal perspectives on the topics of Change, Resilience and Growth. Here are some of my thoughts on several interconnected factors impacting organisations and strategic decision making in 2022.
Presentations, and strategy blogs, often feature a quote from a Greek philosopher… so here is mine:
“The secret of change is to focus all of your energy not on fighting the old, but building the new” Socrates
We all know that change is a constant and we are increasingly aware of a consistent backdrop facing all organisations, best summarised as ‘VUCA’: volatility, uncertainty, complexity and ambiguity. These factors provide the backdrop for all operational activity and strategy planning and decision making.
In addition, we are also increasingly aware that most market sectors are experiencing a high degree of disruption as a result of several interconnected factors including development of new technologies, rapidly evolving customer needs and expectations, new entrants, changing competitive dynamics and new regulation.
Consequently, organisations are either driving and leading the disruption, or they are trying to work out how best to respond to the disruption and the impact on their business model and performance.
Subject to customer profiles, most organisations are also engaging with a broad range of customer attitudes as reflected in the various ‘generations’ covering Baby Boomers, Gen X, Gen Y / Millennials, Gen Z / iGen and with Gen Alpha approaching rapidly. Each ‘generation’ with a particular perspective and expectation set, and often with a range of accessibility, channel and engagement needs.
A common trend that we are observing cross all customer segments and market sectors, fuelled by accelerated digital transformation and engagement is that of ‘immediacy’. Immediacy of access, information, resolution. The “I want it now!” or “I want to know about it now!” culture and impatience with poor or partial outcomes.
A final factor impacting change for organisations and markets is the pandemic, which has clearly had a material impact, and it will have a lasting impact. Most significantly perhaps is that sudden and dramatic change is possible. It has accelerated digital transformation and changed living and working patterns, as just two examples.
These multiple factors driving change, mean that organisations need to develop resilience and agility in order to respond and develop.
“Definition of resilience: the capacity of a person [or organisation] to maintain their core purpose and integrity in the face of dramatically changing circumstances”
For many organisations, a fundamental strategy and business risk consideration is the degree to which an organisation is a ‘specialist’, but not to the point where there is material concentration risk. The pandemic has ruthlessly exposed organisations that have had all their ‘eggs in one basket’, whether that is customers, products, channels, markets, etc.
Given the constant nature of change and market evolution, we advocate that all organisations need to develop and possess people, processes, systems and infrastructure to enable organisations to react and respond to change.
Aligned to this, is our view that continuous innovation is essential, whether the innovation is new to the market or just new to the organisation. This helps support and deliver resilience, both in terms of capability and culture, and ensures organisations are market and customer facing at all times.
Most organisations have invested heavily in front, middle layer and/or back-end technology to connect and leverage legacy systems. However, many have not invested top the same degree in data management, analysis and interpretation: data is the new oil. Understanding and actioning data is a key strategy in managing resilience effectively.
A further strategy adopted by organisations coping with resilience is the degree of collaboration and support provided by suppliers and partners, often facilitated via hybrid and flexible contractual arrangements, adding specific and critical competence, capability and capacity to organisations.
And most business presentations will feature a quote from Richard Branson; here is one of my favourites:
“Building a business is knowing how to do something. Being proud, is to create something that will make a difference in other people’s lives”
Arguably, the pandemic had also adjusted social perspective, and organisations are increasingly aware that they need to achieve growth the right way and doing the right things in the pursuit of profit.
This is a trend that was evident pre-pandemic; however, the sense the organisations benefit from a clear and authentic organisational purpose appears to be building momentum. Organisational purpose is defined as an organisation’s explicit drive to create value beyond profit, serving the needs of specific communities and/or users for their benefit.
Linked to this is the rise of ESG – Environmental, Social and Governance – and its influence in business model, operational and strategy decision making. We advocate that organisations need to engage with the broad range of topics within ESG; not just the ones that seem most relevant to their business model.
A further trend linked to these issues of profit and purpose relates to a longer-term shift from ‘shareholders’ to ‘stakeholders. Consumers and users are increasingly savvy; they know they have increasing power. Organisations know this too! As a result, there is clear mutual dependency, recognised by both parties.
Consequently, reputation management is a board-level consideration and sensitivity. The democratisation of communications through social media means that bad news and/or poor experiences travel faster than ever before and can spin out of control quickly.
There are multiple, complex, interconnected factors influencing and impacting change, resilience and growth for organisations across all market sectors. These provide the backdrop for strategy review and development in 2022.
Change feels like it is accelerating, but that may have always been the case, even for Socrates!
There is increasingly complexity facing decision makers in organisations, working to optimise performance and navigate these factors effectively and efficiently in the pursuit of growth… and purpose.
With this comes the paradox of choice: the abundance of options can make it harder to make clearer decisions. This is true for boards within organisations, just as it is true for individuals.
Faced with complexity, change and choice, organisations benefit from developing strategic, operational and cultural agility to be able to respond and to be resilient.
Suppliers and partners need to understand these challenges that their client organisations are facing on a continuous basis and need to work out how to help them navigate and operate in these dynamic and complex environment.
Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in Leeds, with offices in Manchester, Milton Keynes, Birmingham, Bristol and Newcastle. We typically work with boards, executives and investors of predominantly mid-sized organisations with a turnover of c£10m-£300m, helping clients analyse, develop and implement growth strategies. Also, we work with clients across a range of sectors including Financial Services, Technology, FinTech, Outsourcing, Consumer and Retail, Property, Healthcare, Higher Education, Manufacturing and Professional Services, including Corporate Finance and PE.