It's Now or Never
Updated: Aug 12
Before the pandemic 9 out of 10 companies said analysing the future external environment was important or very important, and yet only 13% of UK companies thought they were very good at it. 1 in 4 UK companies thought their business had underperformed because they failed to think adequately about the future external environment. If the pandemic has taught us anything it’s that examining what the future might bring is critically important.
Moreover, 25% of UK companies said they didn’t analyse the future external environment at all. Whilst three-quarters of UK companies believed it would be worthwhile in time and effort to build a better understanding of the future. So, there is a massive disconnect between thought and practice. This might have been acceptable in the past, but in the 2020s it will become untenable not to have a strategy which incorporates the impact of external change.
Thankfully, the future is not all about risk, it is also about unprecedented opportunity. We are living through a technological revolution which could bring about a surge in productivity growth in its wake. At the same time, it is estimated that 3 billion new middle-class consumers could be added to the world economy by 2030.
Business leaders clearly acknowledge that they have neglect the strategic implications of the external business environment (political, economic, social, demographic, technological and environmental drivers) in the past, which could turn out to be a catastrophic mistake in the 2020s, if they continue down the same track. But the flip side of this argument is that there is a real competitive advantage to be made. You can’t be perfect at forward thinking - nobody has a crystal ball – but you can be better than your competitors at it.
Pandemics tend to usher in chapter changes in history, with profound consequence for business. And it also presents an opportunity for CEOs to re-imagine and future proof their business and organisational models. 90 percent of business leaders agree that the crisis will fundamentally change the way they do business over the next 5 years. The main driver being major changes to their customers’ needs and wants. There is speculation that consumer industries could change more in the next 10 years than in the past 40. Should that prove to be the case it is easy to see how irrelevant an organisation could become simply by doing what’s always worked well for them in the past.
Indeed, failure to act carries enormous risk. The Society of Actuaries has reported that strategic risk accounts for the root cause of decline in public companies in almost two-thirds of cases. John Chambers, former CEO of CISCO has speculated that perhaps 40 percent of the world’s leading companies may not exist in a meaningful way ten years from now.
We live in a world of increasing uncertainty, where the pace and scale of change are accelerating, fuelled by ubiquitous social media, connectivity, and disruptive business models. A survey of business leaders by the Korn Ferry Institute found that 61 percent thought they were managing through revolutionary times. Tom Johnson, Chief Digital Officer at WPP’s Mindshare, has stated that, “Disruption isn’t specific to a new industry or new technology, it now permeates every facet of business and every type of industry … it means, as a leader, you constantly have to evolve your vision”. And yet business appears ill prepared for this momentous change.
A recent survey of business leaders by Raconteur found that ensuring long-term business success by investing in the future was their top priority. This remains a daunting challenge though. What to do, how to do it and with whom to do it, remain considerable hurdles to overcome, but they must be surmounted.
We are living in truly extraordinary times. Black Swan events are becoming far less rare. 20 years-ago none of the 10 factors below were significant for business. Now they all are at once:
(1) Global pandemic.
(2) Deepest recession in 300 years on top of the enduring legacy of the financial crisis.
(3) Digital technological revolution.
(5) Climate change.
(6) Seismic demographic shift.
(7) Geopolitical shock waves.
(8) Domestic political upheaval and re-alignment, including threat to the Union.
(9) Profound shift in values.
(10) Transformation in consumer behaviour.
In the words of Yogi Berra “the future ain’t what it used to be”.
Our job is to help you navigate the economic and future megatrends that will impact your business, in order that you can seize the opportunities they present and avoid the risks they bring.
Read more in ‘Whatever Next’ at http://www.ceoforesight.com
 Institute of Directors research in conjunction with Barclays Bank.  Source: World Economic Forum, 2017 https://www.weforum.org/agenda/2017/08/disruption-in-consumer-industries-turning-the-operating-model-inside-out/  Source: McKinsey, 2020 https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/innovation-in-a-crisis-why-it-is-more-critical-than-ever