Although most businesses (88%) now have a clear picture of the current challenges they face, few (6%) have full confidence in their abilities to foresee and respond to future trends.
This is what Accenture’s study, Business Futures 2021, shows, which aims to help leaders understand the new reality by identifying key signals of business change that shape business in order to successfully run their organizations.
The compressed timetables imposed by the pandemic reinforced the necessity and created the opportunity for businesses to develop their flexibility, explore new business models and cultivate new capabilities that enhance their resilience. The Business Futures study acts as a radar that helps leaders understand signals of business change and and successfully navigate into the future.”,said Marios Limnios, Strategy and Consulting Lead of Accenture in Greece
Long-term trends such as cloud adoption and changes in consumer patterns have been interrupted, accelerated or reversed due to the pandemic. At the same time, new supply chains and business models were developed in just a few days, while the promise of new groundbreaking scientific achievements was fulfilled after raves in just a few months.In this context, after almost two years of continuous turbulence, a new business environment has emerged in which the course and effect of change need to be defined .
Six “signals of change” to better prepare businesses
Starting from an extensive list of 400 trends gathered through crowdsourcing, Accenture collaborated with external partners, academics and researchers to define the 25 strongest trends in business change. Although all 25 trends seem to have a significant impact on businesses over the next three years, 6 of them stood out as essential for the future success of businesses, as they present opportunities and incentives for leaders to embrace change and immediately find new ways to grow:
1) Learning from the Future
As businesses re-evaluate business activities that drive growth, the focus solely on historical data to predict the future is under serious question. For quick decision-making, many businesses are acquiring new datasets and leveraging data analytics and artificial intelligence to effectively identify and react to market shifts.The study finds that 77% of businesses have increased their use of internal and external data sources in real time over the past 12 months, while only 38% of businesses reported that their employees consistently use real-time data in their daily lives. In addition, only 36% of companies said they have a senior manager responsible for these efforts, while less than half of companies (43%) have executives with sufficient qualifications to support these initiatives.
2) Decentralized Decision Making
The global crisis has contributed to the fragmentation of markets, and now distinct regions are emerging that have their own governance systems, economic models and culture. At the same time, consumer behaviours are changing rapidly and new competitors are met with evolving needs. Businesses are responding to this challenge with decentralized decision-making hubs, creating a network cluster structure that can act with immediacy and flexibility. When businesses strengthen their “fringes” so that most of the day-to-day business decisions are made there, it releases time for senior management to focus on key strategic decisions. The study found that 91% of organizations are willing and able to operate more as a “federation” of businesses in order to respond to the increasing fragmentation of the business environment, while more than half (58%) say that their business model will change next year.
3) Sustainability
Businesses recognise the need to have a holistic purpose, but a gap arises between the intentions and the results produced that is constantly widening. The paradox of purpose demonstrates the challenges of integrating sustainability into the functioning of organisations and successfully responding to their commitments to all stakeholders.According to the study, 28% of senior executives say they did not personally commit to providing holistic value, while 48% of businesses say one of the biggest barriers is balancing sustainability with commercial priorities. However, there are signs of a new tide moving towards preserving sustainability ambitions alongside profits, with only 24% of leaders saying they would consider cutting investment in ESG initiatives, for the sake of economic objectives.
4) Unlimited Supply Chain
The pandemic has undoubtedly been a huge supply chain challenge. To meet growing market expectations for fast, flexible, cost-effective and sustainable order fulfillment, businesses are removing the physical limits of their supply chains and moving production to the point of demand. The study states that 92% of businesses have increased or are planning to increase the use of flexible centres, and 96% of businesses have created or are planning to create regional supply chains.
5) Real “Virtuality”
The boundaries between physical and virtual worlds are becoming increasingly blurred and redefine their sense of reality and location, affecting the way people live, work, consume and socialize. Emerging from a period of limited physical interaction, 88% of businesses invest in new technologies to create virtual-reality (VR) and, among them, 91% plan to invest further.In fact, the current virtual reality technology, which mainly involves the senses of sight and hearing, over time will become more and more realistic, involving all our senses and creating a better connection with the natural environment.
6) The New Scientific Method
The pandemic has put scientific innovation at the centre, placing it at the top of the business agenda. While over the past decade, every company has become a digital company, in the next decade, every company will have to become a scientific cradle, leveraging science to address the fundamental challenges of humanity. This will produce inconceivable new possibilities, but only on the condition that businesses improve the approach in the face of innovation. The study found that 83% of businesses agree that adopting a scientific approach to innovation will put them in an advantageous position for future success, while 82% said that investing in sciences outside their traditional industrial boundaries will be a critical success factor for their businesses.
“Although businesses have been forced to respond to a time-compressed transformation, today there is a common sense that they need to change their strategies, rethink their course and help their people adapt to this new landscape as they re-invent for a very different tomorrow,” Marios Limnios added.
