4 Outdated business doctrines to defy in 2021 has been saved
4 Outdated business doctrines to defy in 2021
Why now is the time to question long-standing practices
The pandemic has forced many organisations to change their operations and business processes. Companies were required to pivot quickly and re-imagine their decision-making processes, business models, supply chains, etc. Suddenly, many companies found that their traditional convictions about how to run a business were obsolete. To prevent organisations from being in a similar position, leaders that re-think these four outdated business doctrines will be in a better position for recovery in 2021.
1: Organisations should model digital transformations after previous successful IT implementations
In reality, the opposite is true; companies that model their digital transformations after their previous IT implementations and systems only limit themselves. In fact, this mindset is likely to stifle a company’s digital transformation. Organisations are more likely to be successful if they implement technology with the aim of becoming agile. Agility helps companies to respond faster to change, and has been a make or break for companies during the pandemic. When companies were forced to transform quickly, the agile ones found it easier to survive and recover.
However, succeeding at digital transformation requires involvement not only from the technology leaders like CIOs or CTOs but from C-suite executives like CMOs and chief talent officers in making technology investment decisions. In other words, companies are more likely to succeed if their leaders across the firm are proactive in applying technology-based solutions to business goals.
2: New entrants hold a competitive advantage over incumbents when it comes to market disruption
On the contrary… in fact, organisations that have been able to maintain a significant market share over time are better prepared to scale their operations, particularly during periods of change. During the pandemic, a number of organisations implemented innovative technology solutions, proving that new entrants do not automatically have a competitive advantage over incumbents in disrupting the market. For example, retailers who previously operated primarily with brick and mortar stores that combined their physical retail strategy with online capabilities were able to provide their customers with a more convenient delivery, collection and return. These retailers, with their existing teams and supply chains actually gained a competitive advantage over newer, more disruptive online retailers.
Another example of successful disruption by an incumbent firm is the 100 year old global industrial equipment manufacturer that found its multimillion-dollar machines being unused for months. They created the innovative solution of a sharing economy for their equipment. Given that the machine cost the manufacturer money for maintenance without generating any revenue (i.e. the manufacturer was making losses on existing equipment), they developed a subscription model for other machine owners using internet of things data and sensors that allowed them to make monetary gains. This not only created a new market for the manufacturer but also added value for customers.
Incumbents can successfully accelerate innovation and disruption by aligning with other organisations like startups, non-profits or even their own competitors.
3. Ensuring diversity, equity and inclusion is about improving representation and is the responsibility of HR professionals
Focusing on diversity, equity and inclusion (DEI) is one of the trends organisations cannot afford to leave behind in 2020. Inclusive organisations are eight times more likely to have better business outcomes than non-inclusive organisations. Furthermore, they are twice as likely to either meet or to surpass financial targets.
However, the key is for organisations to understand what DEI efforts are really about. The common misconception is that DEI is about increasing representation, when in reality it is about much more than that. Organisations must look inward and across the firm to improve inclusivity. Take a look at these three areas for example:
- Mentorships/sponsorships: Ensuring that employees feel mentored, supported and advocated for is essential for improving DEI across an organisation. It is critical that employees get support daily.
- Technology: Organisations can use technology to improve DEI with not only their own teams but also stakeholders and customers. This was evident in Deloitte’s Tech Trends 2021 report. A number of organisations are implementing system-wide initiatives to identify biases and inequity within the firm at both organisational and individual levels.
- Societal impact: The spotlight on social justice in 2020 after the murder of George Floyd, Ahmaud Arbery and Breonna Taylor and large number of protests has inspired companies to donate to organisations focused on improving DEI. This is the time for organisations to create opportunities such as volunteer work for employees with NGOs focused on improving DEI.
4. Leaders should limit the sharing of nuanced or complex information
Although, in reality, certain people always have access to more information than their colleagues, if organisations do not take action to make the sharing of information more equitable, it can lead to information privilege. Information privilege is when people hoard data to pursue their personal agendas, which not only negates the values of an inclusive, equitable and transparent organisation but will likely also hamper team performance.
Now, the question remains; how does an organisation prevent information privilege? Well, the answer is to stop restricting information based on its complexity. Often times, if information seems too nuanced or complex, leaders view sharing it as a risk. However, sharing data and information in general can actually drive growth. Equitable access to information can improve the organisations capability to innovate new products or services and develop solutions. Moreover, transparency fosters trust within the organisation, which further increases productivity. Deloitte’s research shows that 79% of employees who trust their employers feel more motivated to work, whereas a mere 29% of employees who do not trust their employers feel motivated to work.
In 2021, it is essential that leaders pay close attention to how and to whom information is shared across their organisation and make the necessary changes to increase transparency and minimise information privilege.
Uncertainty related to the pandemic is likely to affect us well into this year and maybe even beyond. So, what are the takeaways? Organisations must be proactive in constantly defying outdated business doctrines that can limited their potential to recover and to thrive. Organisations that are the most likely to thrive in the long term will challenge old orthodoxies, improve their DEI and continuously pursue agility and innovation.