We never like to rely on one source to fuel our analyses of the problems facing business today, so we’ve done some research with customers, ex employers to create this list of the top 10 problems for businesses to solve in 2015. NEW:
All human beings, but it seems business leaders in particular, find great discomfort in uncertainty. Uncertainty in the global economy, uncertainty in the credit markets, uncertainty in how new regulations will affect business, uncertainty about what competitors are doing, and uncertainty about how new technology will affect the business—these are just the start of a never-ending list. In less than 5 months we will have the UK elections and this is likely to have a huge effect on what businesses do for the next 5 years. The bottom line is that uncertainty leads to a short-term focus. Companies are shying away from long-term planning in favour of short-term results, with uncertainty often the excuse. While this might feel right, we believe that a failure to strategically plan five years into the future can end up destroying value. The problem to be solved, therefore, is to balance the need for a more reactive, short-term focus with the need for informed, long-term strategies. We have seen all sort of business from one man bands thru to Medium enterprises just looking to do things with a short term view. The only thing that breaks this trend, and its ever so slight is pro active IT Support, where we have seen people looking for very bespoke solutions as to what is key and core to their business.
In research conducted by BMGI, seven of 10 Fortune 500 CEOs cite the challenges of globalization as their top concern. Now whether you are selling to the UK market or whether you exporting it is key to have a understanding of foreign cultures. As more business enterprise from Europe and Asia come to setup factories and office in the UK it is essential to know how to penetrate these new cultured markets with existing products and services, to designing new products and services for new customers, to recognizing emergent, disruptive foriegn competitors that only months earlier weren’t even known. The problem to be solved is to better understand international markets and cultures through better information gathering and better analysis of what it all means.Similarly, the incredible degree of government intervention in nearly all major economies of the world is leading to much greater uncertainty and again brings us back to the topic of Uncertainty.
Interestingly, we haven’t found that many companies are looking to create more innovative cultures. At least not the big companies anyway, though that changes some as companies get smaller. This finding was a big surprise when we did our research and little has changed since. It seems big companies are struggling with innovation and a better innovation process is at the top of the agenda for most CEOs, but the idea of a more innovative culture appears too frightening to many. The problem to be solved is how to become more innovative while still maintaining a sense of control over the organization.
4. Government Policy & Regulation
A changing regulatory environment is always of concern in certain industries, but uncertain energy, environmental and financial policy is complicating the decision making for nearly all companies today. It’s true that things seem to have settled down over the past couple of years, but have they really? We find that they haven’t; it’s simply that dealing with an unknown regulatory environment is fast becoming the new normal and companies are deciding to get on with it—whatever “it” may be—despite the angst. Whether a demand from customers or shareholders to become more “green,” the threat of increased costs due to new carbon taxes, constant talk of changes to corporate tax rates, or the impending changes to our NHS, much is unsettled. The problems to be solved are to understand the meaning of regulation and government policy in your industry, its implications for your business, and to develop the skills necessary to deal with it.
The pace of technological improvement is running at an exponentially increasing rate. While this has been true for several decades, the pace today makes capital investment in technology as much an asset as a handicap because a competitor may wait for the next-generation technology, which may only be a year away, and then use it to achieve an advantage. Of course waiting to be that competitor can be equally risky. What’s a CEO to do? Similarly, the ability for even the best of technologists to stay informed about emerging technology is in conflict with the need to master a company’s current technology. The problem to be solved is to develop a long-term technology strategy while remaining flexible enough to take advantage of unforeseen technology developments.
A particular subset of human capital planning is found so often in our research that it is worth its own mention. Diversity brings many challenges, as it makes it far more likely that people do not agree, and the lack of agreement makes running a business very difficult. At the same time, the lack of diversity within many large company leadership teams leads to a narrow view of an ever-changing and diverse world—contributing to groupthink, stale culture and a tendency to live with the status quo for too long. The problem to be solved is to first define what diversity (and we’re not talking about satisfying government statisticians) really means in your company, then foster the expansion of differing ideas and viewpoints while ensuring a sufficiently cohesive environment that efficiently gets things done. For more about Diversity and what it means you can talk to our good friends at Indigo You. Clive Taylor has been working with large public and private businessl providing diversity and inclusion solutions for organisations making them more inclusive working environments which will:
- Attract people from diverse backgrounds and communities
- Ensure that products and services provided are as accessible as they can be
- Help organisations meet the needs of all their stakeholders
- Improve the health and well-being of everyone who works there.
There’s no doubt that life and business have gotten more complex, even as certain tasks and activities have become easier due to information technology. The pace of change is quickening. The global economy is becoming still more connected, creating a much larger and more diverse population of customers and suppliers. Manufacturing and services are increasingly targeted at smaller, specialized markets due to the flexibility that IT provides in these areas. The 3D printing revolution is a perfect example. We know from our knowledge of the patterns of evolution that, in reality, systems tend to become more complex as they evolve, then become simplified again. The problem is how to develop better systems-thinking capability so you can design your business models, processes, products and services in a way that minimizes unnecessary complexity.
8. Information Overload
It is said that the only true constant is change, and in today’s world nothing is changing more, or growing faster, than information. At the end of 2014 estimatea put global Internet traffic at 50 exabytes—50 million terabytes. By 2016, global traffic will reach 1.3 zettabytes, according to a report released in December 2014. Last year saw the Internet of things boom, along with service business reducing their high street presences ( Banks ) to the bare minimum and making people self serve on the world wide web. The ability of companies, much less individuals, to consume and make sense of the information that is available (and necessary) to make good decisions is becoming a nearly insurmountable challenge. The problem to be solved is to deal with this mountain of information with both technology and human know-how, then to convert this information into valuable knowledge.
9. Supply Chains
Because of uncertainty in demand and the need to stay lean, companies are carrying smaller inventories than ever. At the same time, uncertainty in supply, driven by wildly changing commodity prices, an apparent increase in weather-related disruptions, and increasing competition for raw materials makes supply chain planning more challenging than ever. Smaller suppliers that, five years after the global financial crisis, still struggle to get the credit they need to keep up with their larger customers’ demand exacerbates an already unwieldy situation. The problem to be solved is to develop a supply-chain strategy that not only ensures the lowest costs, but also minimizes the risk of crippling supply-chain disruptions.
10. Strategic Thinking & Problem Solving
While the first nine biggest problems faced by business are a direct result of research, the last one is really our own conclusion based on the prior nine. The lack of sophisticated approaches to information acquisition, analysis and the development of unique insight leaves many companies at a disadvantage; they lack a long-term strategic imperative and instead jump from one strategy to the next on a year-to-year basis. Everyday problem-solving competency among today’s business leaders is also limiting their ability to adequately deal with the first nine problems. This is why corporate managers tend to jump from one fire to another, depending on which one their executives are trying to put out, and in many cases the fast-changing business environment is what ignites these fires in the first place. So what is the problem to be solved? We believe, to navigate the future, companies must resolve that strategic thinking and problem solving are the keys to successful business, then develop a robust capability at all levels.