STRATEGY
ortune favours the prepared – even during times of crisis. One way to understand the pandemic’s impact is to observe how it speeds up business trends. These trends are neither seasonal nor cyclical; they are consistent over time. They have been evident to executives and managers for a long while. Take the automotive sector as an example. Car manufacturers have long known that it’s important to de-emphasise mechanical engineering. They are aware of the need to increase the software capabilities of self-driving vehicles. However, during the pandemic, this trend has sped up. Investors have come to love Tesla. It’s worth more than Toyota, Volkswagen, Daimler, and Honda combined, We do this for a simple reason: each sector illustrates certain approaches that leading organisations are using to prepare themselves. Collectively, the research programme identifies a set of key principles that executives can embrace so that they can arrive at their own clear vision. On the adjacent page is a glimpse into our latest 2021 ranking of selected players in the financial sectors as an example. F If you can’t beat your disruptors, let them join you making it the most valuable car company in the world. But this comparison with other, traditional car manufacturers is also misleading. It misses the fact that the market disproportionately favours companies that make electric vehicles. At the time of writing, the world’s first, fourth, and fifth most valuable car manufacturers are all ‘electric first’. Tesla, BYD, and NIO didn’t start out building internal combustion engines. They started with batteries. BYD (backed by Warren Buffett) and NIO (listed on the New York Stock Exchange) are both headquartered in China. So, changes do occur ‘gradually, then suddenly’ [as the aperçu commonly attributed to a combination of the Ernest Hemingway Law of Motion and the macroeconomist, Rudiger Dornbusch, goes]. Resilience, therefore, is not about responding to a one-time crisis. It’s about continuously anticipating and adjusting to deep, secular trends that can permanently impair the viability of a firm’s business. We’ve observed three value propositions companies are demanding, especially coming out of the pandemic, and which have particular relevance for Business School executive education. First, executives want to develop the ability to see clearly for themselves. Second, they want to cultivate their team members to rigorously challenge assumptions. And third, they want their organisation to be architected in a way that’s flexible and simple, rather than rigid and complex. At IMD Business School, we’ve come to observe that many executive education clients have already ‘moved on’ with the post-pandemic era, as far as their planning goes. There are still the near-term struggles, but what they care about most is how to become future-ready without being distracted by all the noise. Learning to see what’s next Take finance as an example: 2020 was a year for fintech innovation and Covid-19, again, was the accelerant. When people shop at home, electronic payments take off. When people stop visiting banks, they manage their finances online. Square and PayPal are the obvious winners here. But incumbents like Mastercard and Visa are also faring well. At IMD’s Center for Future Readiness, we have been tracking how ready financial institutions are for a changing future. We track corporate ‘future-readiness’ in other sectors too: automotive, consumer brands and retail, global logistics, capital goods, and IT.
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AMBITION | Be in Brilliant Company
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