LEXINGTON, MA--(Marketwired - Jun 4, 2014) - Executives in a spectrum of sectors anticipate increasingly rapid and disruptive change in their markets, and yet they doubt their companies' ability to transform, according to a new survey of 800 executives in 20 industries by strategy and innovation consulting firm Innosight.
Eight-five percent of executives agreed that their organization will need to transform itself -- i.e., change core offering or business model -- in response to rapidly changing markets. But fewer than half (42%) said they're confident their company is prepared for transformation within a five to 10 year time frame. At larger companies, ones with $1 billion or more in annual revenue, even fewer (36%) were confident.
"On average, a company drops out of the S&P 500 list and is replaced every few weeks. This musical chairs game is likely to speed up, given the apparent short-term focus of so many companies, coupled with the increasing onslaught of new technologies and competition from traditional and non-traditional players and the blurring of lines between industries," said Innosight Managing Partner Scott D. Anthony, author of the just-released The First Mile: A Launch Manual for Getting Great Ideas into the Market (Harvard Business Review Press, May 2014).
Among the survey's additional insights...
- Few organizations believe they're moving and evolving faster than the market or their competitors. Forty percent of executives (at 48% at larger companies) said their organization is changing slower than the market, and 30% said it's changing at the same pace.
- A key problem: Companies' growth plans focus on near term. Only 12% of executives said their company has a formal growth strategy with a five-plus year time horizon. The rest -- 88% -- said their company either has no formal growth strategy or a short-term one.
- A root cause: No tools, will or process to plan and envision the future. Sixty percent of executives said they don't use scenario planning or other strategy tools to identify trends seven or more years into the future. In fact, a third of executives said their company doesn't estimate or analyze the future either because the market is "too unpredictable" or because they "spend most of our time fighting fires."
Said Anthony, "Transformational innovation takes time to pay off, sometimes as long as 5-10 years. Companies that invest in planning methods that help align senior leaders on long-term growth strategies are probably at a real advantage to develop new business models and open new growth markets."
He added, "Jeff Bezos of Amazon has recently made a good point, after admitting that the concept he introduced of drone delivery of packages is more than five years out. He said that if you have a long-term strategy, you don't have many competitors -- a good thing -- because most companies want a return on investment within three years. In other words, a switch in timeline can be a real competitive advantage. It's worth keeping in mind that Amazon is now a dominant force in cloud computing services, even though that business was non-core five years ago."
For more information on the survey findings and/or a conversation with Scott Anthony, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at 212-255-8386 or Katarina@sommerfield.com.
METHODOLOGY
Innosight surveyed 823 Strategy & Innovation subscribers online in January 2014 and fielded approximately 100 open-ended responses. Sixty percent of respondents were in senior management (with the largest category being CEO/Managing Director). Fully 53% were in strategy or general management roles, and 15% were in marketing or product development. Twenty-three percent of respondents worked in organizations with revenues exceeding US $1 billion, while 19% worked in organizations with revenues between $50 million and $1 billion. Respondents spanned more than 20 industries, including financials and insurance, health care, telecommunications, and consumer goods.
ABOUT SCOTT D. ANTHONY
Scott D. Anthony is the Managing Partner of Innosight. Based in the firm's Singapore office, he leads its expansion into the Asia-Pacific region as well as its venture capital activities (Innosight Ventures). He has worked with clients ranging from national governments to companies in industries as diverse as healthcare, telecommunications, consumer products and software. He is the author of The Little Black Book of Innovation (Harvard Business Review Press, January 2012) and The Silver Lining (Harvard Business Review Press, 2009). He is the co-author with Clayton Christensen of Seeing What's Next (Harvard Business Review Press, 2004), The Innovator's Guide to Growth (Harvard Business Review Press, 2008) and Building a Growth Factory (Harvard Business Review Press, 2012).
ABOUT INNOSIGHT
Innosight is a strategy and innovation consulting firm that helps organizations navigate disruptive change and manage strategic transformation. We work with enterprise leaders to identify new growth opportunities, accelerate innovation initiatives, and build capabilities. Innosight is based in Lexington, MA, with offices in Singapore and Lausanne, Switzerland. www.innosight.com.
Contact Information:
Contact:
Katarina Wenk-Bodenmiller
Sommerfield Communications, Inc.
(212) 255-8386
katarina@sommerfield.com