Inarticulate ramblings of a management consultant

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The perfect storm which has the potential to challenge the corporate world as we see it today

I have spent the last few days at the Symex Conference in Palembang, Sumatra, speaking and listening to a bunch of bright, articulate and challenging speakers. It has lead me to a conclusion about a significant challenge that corporates around the world face over the next few years….a convergence of issues or perfect storm which have the potential to change the corporate landscape as we know it.

Perfect StormLet me set out the three dimensions in this Venn diagram with some evidence to support each:

Loss of Corporate Workforce Productivity:

  • I’ve referred to the Gallup survey of 2012 in the past but it’ worth reiterating: 13% of the global workforce are positively engaged with their organisation. The rest are either indifferent or looking to leave. In my experience, that translates directly to a reduction in productivity levels and in innovation.
  • In certain functions, this is compounded by a chronic skills shortage. For project managers in the Asia Pacific region, a recent survey suggests that for one third of advertised roles, there are either no applicants at all, or those that apply do not have the technical or people competencies to perform the role.
  • The advent of the self-employed. Both the quantum (50% of the workforce in the US by 2020 according to Deloitte) and the nature of the roles (from creative / temporary roles to mainstream corporate and consulting positions)
  • The rapidly aging population in Europe, US and North Asia which creates a situation where overall economic activity will reduce over the next 5-10 years.

Against this rather depressing context of declining / selective productivity, are a set of requirements below which need, above all, greater agility, innovation and engagement on the part of the workforce.

Rapid pace of change:

  • A recent Ernst & Young survey talks to the increasing investment in R&D, Technology, geographical expansion and overall change in product and services mix for the 2014 / 2015.
  • M&A has once again become a significant factor in corporate strategy with volumes of transaction hitting pre 2008 levels in certain sectors.

Increased complexity:

This is probably the broadest of dimensions as set out above…which is as it should be. Complexity for multinationals means something very different than it does for regional and local businesses. In all cases, there is a direct challenge to the business model as it stands:

  • Greater interventionism from both government (in the case of acquisitions and entity structure) and global / local regulator, leading to more challenging and complex capital and reporting requirements. In some cases, countries such as Indonesia are enforcing a regulatory climate where all customer data needs to be held onshore, leading to a rapid expansion of data centre facilities as an example.
  • The impact of globalisation on supply chains, customer requirements, resourcing etc.
  • Environmental awareness influencing customer choice as never before
  • Technology…providing both solutions but also major roadblocks to change for those with legacy systems.
  • The continuing rise in expectation and knowledge of customers based on their ‘global’ reach.
  • Political change through conflict and citizen intervention

What are the consequences of this convergence? In my opinion, the main effect is even greater acceleration:

  • of corporate rise and decline,
  • divestment and investment,
  • fragmentation and conglomeration,
  • disruptive innovation changing sectors as we know them, creating connections and critical interfaces where none exist and breaking those which seem unbreakable now

I will explore the implications from a programme and project management perspective next week…but in the meantime, would welcome examples of where you see this happening right now…or indeed, where you don’t!

Categories: Agile, C suite leadership, Complex transformation, Consulting, Disruptive Innovation, Economics, Functional Leadership, Human Capital, Management Information, Mergers & acquisitions, Politics, Strategy, Transformation

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2 replies

  1. Interesting …

    Apologies Ben, many happy returns for yesterday – its been a little busy here !

    Hope you had a good day,

    Jan
    Jan H de Haldevang (Saudi Mobile 00966 566484545)

    Like

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