BOSTON AND DAVOS, SWITZERLAND, January 24, 2012 – As the annual World Economic Forum summit in Davos delves into “The Great Transformation: Taking Decisive Action in an Era of Extreme Uncertainty,” The Boston Consulting Group (BCG) is sharing insights on subjects central to this year’s discussion. They include growth during a period of unprecedented debt; the increasing importance of adaptability and flexibility in leadership teams; the struggle to define and embrace sustainability; and the manner in which technology is driving society, challenging even the most successful businesses on a daily basis. (Read more about the World Economic Forum meeting in Davos on bcgperspectives.com.)
“Never before have corporate leaders faced such a convergence of major social, political, and economic changes. This truly is the age of the Great Transformation—and it presents today’s managers with a once-in-a-generation test of leadership,” says BCG president and CEO Hans-Paul Bürkner in a commentary on bcgperspectives.com.
“Perhaps not surprisingly, given the daily drip-drip-drip of depressing economic news, many business leaders in developed markets are focused on the macroeconomic uncertainty. But it would be a major mistake to hunker down, keep ambitions in check, and try to preserve the status quo. Yet the new reality is that the world has become highly unpredictable, and companies must understand the cost of passivity. If the risks are great, the opportunities are greater,” he adds.
Among the thinking and topics on www.bcgperspectives.com that help frame the debates in Davos:
Growth and Employment
Before many companies address the question of what scenarios to expect and how to prepare and plot their strategic course, they need to come to terms with the root of the problems they’re facing: the West is drowning in debt, and economic policies of “kicking the can down the road” are failing. (See What Next? Where Next? What to Expect and How to Prepare and Stop Kicking the Can Down the Road: The Price of Not Addressing the Root Causes of the Crisis.)
Leadership and Innovation: The Importance of Teamwork and Adaptiveness
BCG research among 100 executives in a range of industries shows that companies with adaptive leadership teams outperform their peers—in a variety of environments. The research, which is especially relevant in an era of great transformation, disproves some common fallacies about teamwork and adapativeness. For instance, observers often claim that as companies get bigger, they get less adaptive. The research found this not to be true. Observers also say adaptability often implies a lack of discipline. But the research found that adaptive teams have highly disciplined mechanisms and processes that free them up to be more adaptive. (See The Five Traits of Highly Adaptive Leadership Teams: What Senior Leaders Do Differently.)
The Sustainability Question
A key issue for many businesses is that not all of them have found ways to profit from their sustainability efforts, but those that have share some interesting characteristics—such as a willingness to collaborate with external groups and a strong CEO commitment to the cause. Still, a BCG study suggests that companies are struggling to define sustainability in a way that is relevant to their businesses. (See Sustainability Nears a Tipping Point)
Society and Technology: What the Combination Means for Competitiveness
Today, consumers are gaining increasing control in the buyer-seller relationship through the rapid emergence of feature-rich mobile devices, social networking, and cloud computing. This presents significant challenges to businesses.
Brick-and-mortar retailers are leveraging the mobile trend to improve customer service in their stores and to distribute offers that tap into the available time and present location of potential customers. For instance, Tesco’s Homeplus has opened a virtual store in a Seoul subway station. Commuters waiting for their train can order goods by scanning codes with their smartphones and have the products delivered to their homes. And e-tailers continue to threaten traditional stores with innovations such as the new Amazon Remembers tool, which could turn brick-and-mortar shops into showrooms for Amazon.com. Shoppers in a store can snap a picture of a product with their mobile phones, and the photo is automatically uploaded to Amazon.com, which then searches for a similar product. Customers can purchase the Amazon product immediately or “remember it” in their Amazon account. A new application from Amazon called Flow brings together barcode scanners and multimedia content to make in-store price comparisons even easier. (See Multichannel 3.0: The Mobile Revolution.)
Other Davos-relevant pieces on www.bcgperspectives.com address workplace wellness, global aging, a “many city” growth strategy, the global talent gap, and how to get people to solve problems without you.