This week I wanted to share this new paper from Harvard Business Review that I found a very interesting read – The Future and How to Survive It by Richard Dobbs, Tim Koller and Sree Ramaswamy for those of you that subscribe to HBR, you will find a version of this article appeared in the October 2015 issue (pp.48–56, 58, 60, 62).
The paper looks at global company profits from 1980 which has seen an unprecedented growth. However, growth is now slowing, costs are rising and new rivals from emerging economies and from the technology sector are changing the rules of the game. Irrespective of our organisation size, the five specific areas highlighted to business leaders to consider are valuable areas for us all to review… how confident do you feel in your future when looking through these 5 lenses?
Be paranoid. Instead of focusing internally, executives in Western firms need to understand their new rivals.
Seek out patient capital. Emerging-market firms and technology companies often take a long view, building their market share over years at the expense of short-term profits.
Radically self-disrupt. Companies must overcome strategic inertia by reallocating capital as conditions change.
Build new intellectual assets. The most profitable businesses are in idea-intensive industries, so intellectual capital such as data and algorithms is a prime asset.
Go to war for talent. As populations age and talent becomes scarce, now is the time for human capital management to become a strategic priority.
Join me this Friday ( 6thNov at 10am EDST), as I explore the Go to war for talent area in greater detail during the Profitability Academy.
Content abstract – “Finding and nurturing ambitious, hard-driving, and international-minded managers and technical staff are major challenges for multinationals and will become ever more crucial. HR operations at many companies have traditionally been seen in terms of compliance, record keeping, and support. But as talent shortages grow more acute in idea-intensive industries, human capital management should become a much higher strategic priority. Companies need to rethink organizational structures, workplace flexibility, and job definitions for a new era. The increasing prevalence and sophistication of digital tools for talent management give companies an opportunity to improve recruiting, screening, onboarding, compensation, engagement, retention, and leadership development. Companies that move quickly to integrate those technologies and use them in a strategic way increase revenue and productivity by up to 9% and lower talent and HR costs by up to 7%, a recent McKinsey Global Institute report found. But online platforms are also giving employees new mobility—and handing competitors new tools for poaching top performers. To win in the war for talent, a company will need to create an engaging workplace environment and maintain a solid reputation as a good employer. This might include giving employees a greater ownership stake in the company to build commitment.”