CEOs see tech disruption as business opportunity

11 October 2017 Consulting.us

US CEOs are looking to use technology to their advantage, with around 60% seeing technological disruption as more of an opportunity for their business than a threat. Companies in today’s accelerating business environment are attempting to utilize innovation to offset global uncertainty. Tellingly, cybersecurity risk has decreased in severity in the eyes of businesses, as management of the issue has increased.

Technological advances and subsequent rapid consumer adoption are forming a business landscape where start-ups and cross-border competitors are able to quickly leverage new ideas and enter new markets. ‘Disruptive’ startups have launched business models and product lines that threaten the market share of traditional players and incumbents across multiple industries. Disruptors are forcing businesses to quickly adapt to changing market conditions, or else face declining revenues.

In a new report from KPMG, titled ‘Disrupt and Grow: 2017 Global CEO Outlook’, the professional services firm examines how global CEOs are reacting to current disruptive trends, as well as the various side-effects of the area in which the lion’s share of disruption is occurring – digitalisation.

CEOs view on disruption

While disruption creates numerous risks for businesses unable to adapt to rapid and significant changes in their market segment, the potential for disrupting their own market – or leveraging disruption to diversify – is seen as an opportunity by a majority of CEO respondents.

74% of all CEOs responded that their organization is actively disrupting the sector in which they operate, rather than waiting to be disrupted by competitors. 65% of CEOs also responded that they see technological disruption as more of an opportunity than a threat.

CEOs disrupting sector in which they operate

Indian CEOs were the most active in regard to ‘disrupting their own sectors’. 83% of Indian CEOs claimed that they were actively engaged in disruption. French respondents followed, with 79% saying that potential disruption is the way forward for their market position.

72% of US CEOs said they were disrupting their sector, tied for fifth with Germany and Australia. Most CEOs are, therefore, reticent to say that their firms are not engaging in ‘tech disruption’.

Views on technological disruption

CEOs were also asked whether they perceive technological disruption as more of an opportunity or a threat. India took the number one spot again, with 80% of respondents stating that they see it as an opportunity. Mirroring a recent survey from KPMG, China followed at 75%, while Germany took third spot with 74%. 60% of US CEOs surveyed responded that they see technological disruption as an opportunity, with around 40% saying that they see tech disruption as more of a threat.

Leveraging technology to drive disruption is easier said than done, however. “New, disruptive technological innovations are emerging at a rapid pace. Today’s hot tech breakthrough could soon be yesterday’s news. With so many options to choose from, it’s extremely hard to methodically scan, assess, pilot, and deploy new technologies,” commented KPMG UK head of technology Tudor Aw.

Risk landscape 2017-2016

The perceived risk landscape of disruption has changed slightly since last year. Cybersecurity, then occupying the number one spot, has dropped to fifth, while operational risk has launched to number one. As with companies increasingly invest in governance and risk management in light of market uncertainties, operational risk has risen to the forefront of CEOs’ minds. Reputational/brand risk is a new entry to the top five as well, driven principally by emergent social media risks, as well as a growing proportion of ‘on-demand’ employees who are less likely to ‘live’ a brand’s values.

The reason for the decline of cybersecurity as a CEO concern is, potentially, that many CEOs are increasingly confident that they have the particular risk under control. Nevertheless, in Autumn 2017, the world’s largest cybersecurity consultancy, Deloitte, was rocked by a cyberattack. If more high-profile incidents occur, cybersecurity may well retake the top spot on the risk rankings.

Industries prepared for a cyber event

With respect to CEO confidence in regard to cybersecurity preparedness in case of a cyber event, almost half (49%) of infrastructure CEOs say that they are fully prepared. In the automotive industry, 47% of respondents also felt fully prepared. Consumer and retail, which has been hit by numerous customer information breaches – with large amounts of personal information, including credit card numbers, ending up on the street – is, nonetheless, confident about their preparedness for a cyber event, at 45%.

Commenting on the study and the challenge ahead for global CEOs, KPMG International Chairman John Veihmeyer said, “They say they are taking the necessary steps for their business to be a disruptor, rather than be disrupted. They recognise the impact of increased geopolitical and economic uncertainties on their business, and are working hard to be prepared. Moreover, they understand that speed-to-market and innovation are strategic priorities for growth in these uncertain conditions.”

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Six ways to create a resilient workplace culture

06 March 2019 Consulting.us

A new study by global management consulting firm North Highland has found that by actively monitoring and managing culture, leaders are able to assess engagement, ensure alignment, increase performance levels and innovation, and promote change-readiness and resiliency within their organizations. 

“Culture shows up as the output of how the organization thinks, reacts, communicates, collaborates, and makes decisions,” the study finds. But as a concept, culture can be ambiguous, making it difficult to home in models that effectively implement organizational-wide, business-changing cultural practices, besides run-of-the-mill “go team” speeches and direct leadership role-modeling. “In fact, the behaviors, actions, mindsets, and perspectives of culture can be grouped into six specific categories, which we identity as culture levers.”

These levers – some firms call them “core values” – work in tandem, and can each be leaned on more heavily at any given time to suit a business’s particular needs, such as assisting in organizational alignment, monitoring performance levels, the ongoing hunt for new, potentially lucrative, opportunities, and, importantly, crisis management, which in turn greatly aids in preparation for a rapidly changing, digital landscape.

“A crisis [or disruption] can hit any company at any time,” the study finds. “Scandal, failure, a bold new competitor, a rough earnings report, a poor product rollout – today, even companies with long track records of success are highly vulnerable to sudden turns of fortune. When a crisis is particularly threatening, it can rock the very identity of an organization.”

The six levers of culture

Release the levers, unleash the power

The six levers of culture are vision, values, behaviors, recognition, language, and systems. “While each of these isolated pieces can be adjusted specifically to make a meaningful impact on the organization, when operated on concert they amplify the power leaders have to build, manage, shift, or change culture as needed. 

Vision connects the work to the greater purpose of the organization. Purpose is an extremely important aspect of business in the current cultural landscape, with some studies predicting that its value is greater than that of profit in term of long-term success.

Values concerns what matters, what’s important, to a business. They act as guiding principles. It is largely fueled by vision. Once an inspiring vision is established, it is translated into “a clear set of values that drive every aspect of the business, breathing life into shared purpose and guiding employees in their interactions with customers,” the study finds. “Vision and values creates a shared sense of purpose at both the organizational and individual level.”

Behaviors and language go hand-in-hand to enhance culture. When the leaders of an organization – or a subset of an organization, such as a finance group – works together to create a common language that can be used to build a structure that teams can use to concretely determine what is expected of them. “By defining these levers and incorporating them into daily operations, behavioral norms are created, and bonds begin to form.”

Recognition is also important in creating an uplifting internal culture. "[It] influences the employee’s sense of belonging within an organization. Working the lever of recognition reinforces positive individual efforts and creates opportunities to set an example for other employees related to values.” But recognition is a delicate matter. People are people, after all, and there is the potential for dissent and emotional trouble if not handled correctly. Changes in pay – the announcement raises for specific teams, for example – might be poorly received by those whose pay will not be affected. This requires clear, prompt communication between leaders and employees to calm storms before they hit organizational shores.

Behaviors, language, and recognition only go so far in driving employees to participate in a positive workplace culture. Proper systems – “structures that determine how [businesses] operate and organize [their] work” –  go a long way in encouraging to employees to initiate and complete certain actions, in turn assisting a business in creating its desired culture.

Culture breeds resiliency

In its “Harvard Business Review Analytic Services' survey, which focused on resiliency, 88% of North Highland’s respondents said their employer had recently experienced or was currently experiencing a disruption. This greatly affected the employees of these organizations, most the respondents said, but “less than half felt the organization was successfully promoting a culture of resiliency.”

This is where leaders often fall short. They don’t see culture as a priority, something that must be molded, managed, directed. But waiting for a crisis or disruption is not an answer – nor is it a proper test of culture. Culture is something that is essentially tangible. It should be constructed, not hoped for. Culture is like a garden, the study says. And gardens, like culture, need tending, constant care. They must be regularly cultivated, pruned, trimmed.

“The ability to get back up, realign, and move forward is dependent on the organization relying on its culture and pulling the right levers to overcome challenges. Most companies and most leaders need to take that to heart and start using their culture levers more effectively and often,” the study concludes.

For more details on the report, download the study 'Intentional Cultures Are Resilient' from North Highland's website.