New factors of competitiveness

 

Best in class Leaders do drive change by fostering new factors of competitiveness

Beside the ‘classical’ factors of competitiveness (have a good strategy, have the resources, buy some well-chosen market leading technology solutions, buy best experts, optimize the processes, build a strong know-how, etc.),

new factors of competitiveness are getting more and more attention.

Even if we have quite accurate scenario forecasts for the future, we still don’t hold the knowledge of what exactly and how fast is going to change. We can only predict.

Our uncertainty regarding of what will happen raises from the fact that we don’t know what technologies will appear and how will they interplay among each other. We also don’t know, how people, the employees, the customers, the stakeholders, and the overall society will react on the upcoming challenges.

As regards the pace of the expected change, our uncertainty can be well described with the interval of +/- years in McKinsey estimates regarding automation: half of today’s work activities could be automated by 2055, +/- 20 years. That means it might be happen by 2035 or in 2075. That seems to be a significant difference regarding the projected timing.

However, something is certain:

As living in this volatile environment some factors of competitiveness are getting much more decisive, than before,

and that some of these factors will play an increasingly important role in the fierce competition. Solid research shows that many of these newly raising factors will be strongly culture related.

E.g. the capability of shortening the learning or implementation curve, or adjusting Your organization and processes in flexible ways to a fast changing environment while reading and interpreting the data properly – these factors will be more and more decisive advantages in the upcoming years.

And there is nothing new, we just have to prioritize well and organize our actions accordingly.

If many of these new factors of competitiveness do strongly correlate with the human factor, with culture, we should prioritize them well.

We might learn effective ways of how to drive the mindset change, how to deploy strategy in an inspiring way, how to turn people from resistance into creative involvement, how to build an effective implementation and learning culture, how to change the way You lead Your organization in early 21st century, just to name a few of the factors we are dealing with.

These culture related areas of development are more and more significantly required while building fit companies for future.

Still many of the leaders consider organizational learning, or the related cultural elements as a low ranked necessity, they do not prioritize these topics very high.

Leaders often underestimate the scale of how much they have to change their own management style, in order to be able to drive these cultural changes successfully.

Giving a well-founded example on the fact that these cultural learning factors are nothing new, they have an increasing value, but still these factors are very differently prioritized, we can cite back in 2010 published Bersin by Deloitte study, claiming that one of the most relevant drivers of business impact is the strength of an organization’s learning culture.

Some relevant finding from the study:

  • Companies with strong learning cultures are 42 percent more likely to be innovative, have 37 percent greater employee productivity, are 35 percent more responsive to customers’ needs and 17 percent more likely to be market share leaders.
  • In the study, high-performing companies saw superior financial results over the past three years. Of the executives surveyed, 15 percent reported above-average revenue growth (vs. 32 percent below-average) and 14 percent reported above-average profit-margin growth (vs. 37 percent below-average).
  • Great learning cultures attract and retain top talent because they empower them to learn, grow, realize their potential and make a difference

Even if these are not completely new factors, and even if we see their increasing importance, many leaders are still not aware of their opportunities here.

Every organization and every leader is influenced by the new trends, although the scale and timing of the impact may significantly differ from company to company. Some organizations are just less impacted right now, where leaders might think they can take their time learning to deal with these factors of competitiveness.

In case an organization would rank these new factors of competitiveness lower, I have here three reasons I would suggest to consider:

  1. Companies who are consciously driving these cultural and organizational changes, are doing much better in business, than those, who just try to keep up with the latest trends.
  2. The trendsetters understood something very well: Cultural change, or changing in mindset You can not make happen overnight. It takes time. It takes years to make a bigger step forward.
  3. And most importantly these are things You can not buy. You have to earn them. Technology, process, knowledge, experts, system and many more You can buy, but culture, style You can’t buy, You have to earn them.

This means, that if somebody awakens too late, might not be able to catch up fast enough. This is what makes these more and more important, organization and culture related factors of competitiveness so important nowadays.

 

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