LONDON May 21, 2012
UK companies failing to keep pace with the rate of business change
Business leaders in the UK have admitted that companies are failing to keep up with the increasing rate of change they face, placing businesses at risk from factors such as reduced turnover and hostile takeover. With an economic climate that remains threateningly unclear, the findings of the ‘Fit to Change’ report, carried out on behalf of Fujitsu, call into question UK plc’s ability to adapt and succeed in the uncertain environment they operate within today.
John Kotter Harvard Business School
It went on to reveal that:
- Business planning cycles are reducing – five years ago 43% of respondents believed they could plan with certainty two years ahead. Only 21% believe that is still possible today
- Today, 33% believe they can plan one year ahead, and a quarter feel it is only possible to plan ahead six months with any degree of certainty
The most likely consequences of failing to adapt to change are financial. Overwhelmingly, 96% of executives believe decreased turnover would be a consequence of not reacting appropriately to change. Similarly, respondents felt that the ability to get finance would be severely impacted by a failure to appear responsive to the market. 62% believe that a drop in share price would be a likely outcome and 59% fear hostile takeover.
Customers are the biggest driver of change – 83% of respondents felt they were a significant factor – clearly reflecting the increasingly demanding consumer that businesses are tackling today. However, it was also the factor that business leaders felt their own organisation was least able to respond to effectively, revealing the biggest pressure point for businesses today.
To tackle change successfully, respondents were clear that strong leadership is the key ingredient – 97% felt this. Additionally, the capacity to change and available resources topped the list of ingredients required to be fit to change. However, when comparing the ingredients that business leaders believe are essential to being fit to change with those they believe are most lacking across UK plc, the gaps occurred in three areas – a robust ecosystem of suppliers; a long term vision and the right technology solutions.
Notes to editors: Responding to the threat
The research results have been combined with insights from our Fit to Change Panel to create a top ten tips list, revealing both the kinds of characteristics businesses need to foster, and also the initiatives they should launch to improve their responsiveness to change:
1. Strong, honest, leadership
Business leaders need to start not by focusing outwards on the organisation, but by looking inwards. Do they themselves really accept and embrace change, or is it just an inconvenience they’re forced to tolerate?
2. Foster innovation through a deep sense of security
3. Be clear on the skills you need
Make sure you truly understand the market trends and customer needs driving your sector in order to map out the skills and capabilities you require to succeed. If you don’t already have the necessary skills, go out and recruit them, or plan to develop them internally.
4. Release capacity through flexibility
When people can work where is most appropriate for them, when tasks can be simply shared, when teams can be brought together simply to solve problems, an organisation can be far more effective in its response to change.
5. Empower people by delegating deep into the organisation
6. Communicate, communicate and listen
If you want to ensure the whole organisation understands and feels the intensity of competition, the nature of key challenges and the pace of change required to win, the key is communications. Change is an evolving process that requires buy-in (whether willing or not), many organisations fail at an early stage by ignoring the long-term communication strategy. And communication is a two-way street. Listen to the market; listen to your staff and listen to your competitors – if you are not listening you will not hear the call to change.
7. Employee diversity
The most important thing in business today if you want to succeed is diversity across your employees. Different experiences; cultures and ages provide a range of insights that enhances a company’s flexibility. When it comes to technology for instance, it is likely to be young employees that enable you to harness the latest technology to keep pace with change. And there’s also likely to be advantage in hiring staff from industries which have already embedded some of the attitudes you’re seeking.
8. A robust ecosystem of suppliers
The way you partner with suppliers and integrate them into your business is a complex situation – but it is also the difference now between winning and losing in business. Your supplier ecosystem can make the difference between agility and sluggishness.
9. The right technology solutions
Technology is not just a means to save money and reduce risk; it can be your ticket to ensuring that when you need to move quickly and in different directions, you can. It’s essential that today’s CEO has an understanding of when IT should be an integral part of business strategy – when investing in IT can reshape the business.
10. Balance your visions
Ultimately being "Fit to Change" is about ensuring the right balance between your long- and short -term visions. The key here is having a defined long-term vision but the capability and infrastructure that allows you to drop down to the frontline at any minute in response to external factors.
- Fit to Change report http://www.fujitsu.com/uk/campaigns/fit-to-change/index.html
- Fit to Change video Duncan Tait
- How fit to change are you ?
- Fit to Change panel insights:
- Vertical insights:
4.5 trillion yen US$54 billion March 31, 2012 http://www.fujitsu.com
Duncan Tait Andrew Bale Robin Young Paul Dreschler John Kotter Harvard Business School James Woodhuysen