With the new year underway, one thing appears certain, and that is continued uncertainty. As The Economist has cautioned, “the new normal is already here.” Uncertainty has emerged as the defining characteristic of our age.
The ongoing pandemic is, of course, the most obvious and proximate cause. We entered a third year with a new and more contagious variant of the virus, which increased infections and hospitalizations, travel restrictions, mask mandates, and immunization regimes. Although it seems to have begun to recede in some parts of the world, Omicron is a stark reminder of the unpredictability of the virus’ evolution and a demonstration that a return to some reliable state of normalcy remains just out of reach.
have returned to working remotely through at least the end of the month. As a result of the ongoing pandemic, economists are reducing their forecasts for economic growth this year, citing its impact on retail sales and manufacturing production and rising inflation.
However, these challenges associated with COVID-19, while still significant, are not the biggest source of uncertainty for most businesses. The pandemic presented business with the most acute set of disruptions since World War II. Nevertheless, CEOs view these issues as paling in comparison to the technological, societal, and economic challenges that their businesses must confront in the years ahead. In the annual survey of global executives for the AlixPartners Disruption Index, which will be released at the end of this month, only 3% ranked COVID-19 as their top priority for 2022. At the same time, 94% of CEOs said their business models would need to change within the next three years – and more than half worried that their business was not changing fast enough to keep up with the pace.
Disruption, which displaces businesses, markets, and value networks in favor of newer models and relationships, is happening at a pace unprecedented in human history. New technologies are adopted in just a few years, rather than the decades or more of the past. The pandemic has accelerated these adoption trends – witness the uptick in digital commerce, remote work, and AI applications since 2020.
And the pace of innovation is accelerating as well. The computational power of artificial intelligence once doubled every two years. But according to AI research laboratory OpenAI, since 2012, that computational power has been doubling every 3 months.
The pace at which disruptive forces impact businesses today means leaders can no longer “wait and see.” Businesses across industries and geographies are under intense pressure. And over 40 years of helping companies find opportunity in challenge, we at AlixPartners have learned how the best-performing companies respond to that pressure.
First, disrupt yourself, before anyone else can. Have the courage to break away from tried-and-true but rapidly fraying business models. Even when it feels hard. Taking a wait-and-see attitude is too often the beginning of the end. If you do not take control of your future, someone else will.
Second, accelerate your digital metabolism. Digital is not something you do. It must be who you are. Digital capability will soon underpin every successful company everywhere. Like cell respiration for biological organisms, digital must become part of a company’s metabolism. Not something that exists in a single department or outside of the core organization, but rather the lifeblood of the organization—and everyone’s responsibility.
Third, create the workforce of tomorrow, today. Don’t let inertia drive your talent strategy. The organization you have today will not likely carry you where you need to go – and you can’t ask it to. Source diverse capability from atypical places and train the skills you need. Many jobs that need to be done aren’t jobs that have ever been done before, so you can’t expect to find experienced workers to fill the roles. Your workforce is your biggest asset—and investing in making it thrive will help create the energy you need to press through the disruption.
Finally, prioritize pace over perfection. It’s impossible to overestimate the importance of execution. Take an action mindset. Plan less and do more. A solid plan to respond to disruption that is implemented with speed and rigor will always outperform a perfect plan executed poorly.
Amid so much change, the entire organization needs to believe in the change you’re undertaking and where you’re leading them to. Leadership, by definition, requires followership. If you’re not bringing others along on your journey—inspiring and guiding them—then any transformation is doomed to fail. Communicate your vision clearly – and repeatedly. Compelling communication that really connects with employees can be an effective antidote to the confusing forces of disruption and change.
The 2020s are a decade filled with promise—and that promise is disruption. The winners of disruptions will be the disruptors.