Changing World - Changing Companies

 

Since we started trading we have continually changed how we undertake business to
suit the circumstances prevailing at the time, from the first cash crops bartered for goods and
services to sophisticated international exchanges and the formation of global corporations.
As trade has become more complex, increasingly global and faster we have adapted
to these changes creating new organisations such as DHL, and the ‘World Trade Organisation’
and new tools such as ebay and paypal. It’s highly unlikely that the way we currently organise
ourselves for business will remain the same for very long either.
 
Peter Drucker, the management guru, foretold the end of the corporation as we know it
today back in 2000. We at GFF have been tracking the rise of the ‘networked company’
for seven years. Our research now tells us that nearly four out of five of us believe that the
networked company is likely to become the preferred model for business in the next five years.
Understanding which structure of company will be the successful model of the future is
important. Understanding that the existing models are unlikely to prove successful for very much longer is even more important however. Understanding that we need to change is the first step towards embracing change.
 
For many years companies have been seeking to reduce cost by engaging with other
companies who can bring their expertise and focus to bear on their own internal processes and
thereby reduce costs, thus outsourcing was born. This has accelerated in recent years as
technology has allowed some functions of the business to be performed overseas in lower
labour-cost markets. This is unlikely to stop, but there is plenty of evidence now that doing this
purely for cost savings, over a long term, can be a risky strategy. Engaging with third parties in a flexible manner gaining benefits of improved service and innovation is likely to be the new reason to engage with external companies in the future.
 
Our labour resources are changing at an even faster pace than ever. Generally populations are
ageing rapidly and the mix of cultures and nationalities now making up our nation’s workforce
is changing faster than before. Europe, the USA and Australasia are experiencing some of
the fastest changes in demographics, which will result in a very different make up of citizens,
customers and staff available to them than today. Responding to this is today’s challenge. Our workforce is more likely to span four demographic generations, rom 'Builders and Boomers' to 'GenX and Y'. Each of these cohorts has very different characteristics born from their conflicting references base's. Engaging with these groups is a new skill many organizations will need to excel at if they are to thrive in the coming years.
 
The world economy is set to grow at about three percent a year for the next
decade, with certain states, such as China, India, Brazil, Mexico and others pulling ahead of this average. There will only be three of the existing G7 in the top seven economies in the world in the next few decades and that will have a profound affect on the culture and business norms of international trade.
 

Technology is about to blow us away in its ability to enable global communication.

Be prepared to see moving images, television and video on every device as the IP (internet
protocol) revolution continues and information in all its forms converges on this standardised
transport layer. The young people around the world intuitively engage with this capability, which
is one of the reasons we have seen an explosion in the take-up of social networks in the last
five years. Today over one billion people around the world are connected in social
networks. If you aren’t – ask yourself why?
 
The next revolution – even the next ‘big thing’ – is very likely to be online virtual worlds. These
worlds are populated by avatars (graphical representations of ‘people’) interacting with one
another, exchanging information and ideas and buying and selling to one another. As your service costs increase, how much simpler might it be if your customers engaged with you in a
virtual world with avatars that are sometimes operated by real people and at other times by
artificial intelligence systems – think how much lower cost that might be?
 
Some would argue that our education systems have let us down, that they are not producing
graduates with the critical and analytical attitudes and capabilities suited to today’s changing
and challenging markets. Global corporations are increasingly engaging with the educators to
increase their chance of being able to hire appropriately trained and developed graduates for
their firms. What we do know is that the emerging economies, as the fast developing, nonindustrialised parts of the world are frequently referred to, are in dire need of management,
technical and engineering staff and their education systems are currently not able to supply them.
 
These economies will be looking abroad to recruit the talent they need. So whether you like it or not, whatever business you’re in you’re just as likely to be competing with Dubai,
India and Kazakhstan for your new employees as with the firm down the street.
 
We are living in an increasingly globalised world - how will you cope?

 

 

 

 

 

 

 

 

 

 

 

 


David Smith, 29/03/2008

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