Bettering society and improving business are not mutually exclusive. But we have to ask ourselves: are we predicting and managing unforeseen risks and opportunities such as these? Do we adequately understand and mitigate existential threats? How do we build a better world where we don’t just survive, we thrive?
The point is that change is happening fast, and cataclysmic events are far from rare. Exciting but unpredictable new technologies and accelerated climate change are throttling the engine for both opportunities and challenges. With volatility having such deep and lasting effects on society, the business world cannot be in the backseat. We urgently need to drive positive change, not simply react to it (or worse, ignore it.)
This is the 21st century inflection point, a time when choices that governments and business make have monumental knock-on effects. So it’s high time to ask ourselves: how should we think about these challenges and what is a pragmatic way of working in this new world?
Key new approaches for a new world
Don’t be so focused on the present that you ignore the future
Short-term thinking is a luxury that we can no longer afford. Organisations of all sizes and sectors need to act quickly to survive, power productivity and protect the planet.
We understand that continuity makes business leaders feel safe; they became successful by doing things a certain way, so they feel confident maintaining the status quo. But these days, this can be dangerous. The phrase business-as-usual should no longer be a comfort, but a sign of alarming carelessness.
Take just-in-time manufacturing. Producing stock to meet demand has saved companies mountains of money, raised prices and helped make the global supply chain into the behemoth we know it to be. Efficiencies were being found everywhere. “Lean” became synonymous with successful.
And then COVID hit. Supply chains rasped to a halt. Business interruptions mushroomed. But it hasn’t been just COVID causing supply chain interruptions. Subsequently, in early 2021, a stranded container ship shut down the Suez Canal, holding up some US$9.6 billion dollars of goods each day. Recently, the blockages caused by anti-vaccine requirement protests in Canada cost the global automotive industry US$300 million. In this particular moment, just-in-time manufacturing is now more of a curse than a blessing.
Those who addressed their risks by changing course have avoided these headaches. Kellogg’s, for example, gained market share by addressing their supply chain issues quickly. During COVID, their demand came not from schools and restaurants who buy in bulk, but individual consumers at home. Their need for more packaging exploded. In Korea, their shipment of paperboard was severely delayed, so they scoured their region for new suppliers, finding one in New Zealand. They then took broader action, diversifying their supply chain and sourcing locally to a much higher degree. As a bonus, this evolution has even deflated their carbon footprint and lowered transport costs.
You too can prepare for the chaos of the future now. But resilience does not bloom out of nowhere. It is earned. The ability to problem-solve is what creates your resilience. By understanding the risks that your company faces — from input to output, from without and within — you can mitigate risks well before they manifest. Raise your eyes from from the short- or medium-term spreadsheets; instead, look to the broader future — because it’s coming faster than you think. For example, think about how climate change will affect your assets in a decade or two. Up-front preparation for different long-term scenarios will mean you don’t get caught out.
Strengthen your values and purpose — and mean it
These days, many companies are focused on creating and articulating strong purpose statements. That should be applauded: in many cases it has helped to rally employees behind company strategy and improve recruitment and retention.
But if your purpose is perceived simply as a marketing ploy and not demonstrated, trust from employees and customers will erode. What’s worse, an even greater threat may manifest.
Values are not just expectations, but guides for how to behave. These days, employees are faced with unknown risks, with often ambiguous or incomplete data, and looming pressure to take action quickly. If they don’t feel a connection to the purpose and values of the company, they have no guide except their own guesswork or ambition.
Take this scenario: safety is a stated core value at your company. This is important, as you run a high hazard operation that uses some highly corrosive chemicals. During routine maintenance, a member of your team notices some damage on a key piece of equipment. He suspects that this could be sign of further corrosion in the piping, and potentially other equipment. Your operations director knows that she must shut down the plant. But does she shut down just long enough to replace that one piece of equipment, or for an indefinite amount of time to conduct a full inspection? How does she decide whether to prioritise production output or the integrity of the operation, and thus the lives of employees? Her choice will be dictated by the degree to which your company spotlights and stands behind its core values.