Struggling businesses need to pivot before it’s to late
There are several recent surveys which show that the biggest risk for New Zealand companies, has been a lack of having developed an adequate strategy to allow for change. With the air of uncertainty now truly thrust upon the economy, this approach will mean the loss of jobs and the eventual downfall of many New Zealand companies.
The drive by many small-to-medium enterprise (SME) owners to grow is often misplaced in their understanding on how disruption will change their business models. SMEs are vital to the New Zealand economy, where 97 per cent of all businesses have 20 employees or less, they provide jobs for roughly a third of all Kiwis and produce around 29 per cent of our GDP.
Adapting to change
There is a strong belief among many New Zealand businesses that doing nothing could be their greatest risk to future success, owing fear to the fact that profit will also be affected by growing costs and reduced human resources.
A large percentage of corporate boards still feel confident in their ability to make good risk decisions –what success looks like for businesses, how they feel about risk and how they see their businesses evolving in the future determines how they view growth. In fact many have no firm plans to change products and/or services to meet future changes.
At some point to, many entrepreneurial businesses either fail or stagnate based on either the owner not knowing what he or she really wants from the business or hoping that customer loyalty will set them apart from their competitors.
Companies that grow their profit usually begin to scale up their operation in unison but ultimately fall short as the costs of doing so takes its toll. New Zealand companies are not ready for the impact of disruption, as a few surveyed highlighted technological advances as a key risk.
We know that risk is part and parcel of growing a successful business, but with a rapidly changing environment, businesses need to be thinking about how they will adapt to stay relevant in their segment and deal with those risks.
The questions we should ask are – What do you want out of the business? What are you doing with the business to achieve your goals and objectives? How can I pivot?
Most of the time it turns out that New Zealand businesses are not mobilising the correct resources to analyse, communicate or validate their requirements for change, ultimately working counter to their goals and actions i.e. wanting one thing, but actually working towards another.
The fourth industrial revolution is rapid in its pace of change which is giving rise to lightning fast innovation. Without taking innovation into account when building future business strategy, puts New Zealand businesses at a greater risk.
There needs to be a growing alignment and focus on the critical elements essential to business success, understanding that calculated risks are vital for survival. These businesses have to innovate sooner rather than later.
Company boards need an infusion of younger tech-savvy people to bring fresh ideas to boardrooms and management needs to create an environment where the young innovative minds in the company can create their best work.
Gone are the days where a unique product or a glowing business culture meant businesses would remain stable. Innovation is leading the way for more competition, newer products, changing consumer and environmental habits. The businesses that want to survivor will have no choice but to future-proof a strategy on innovative disruption and take risk by the horns.
With the fourth industrial revolution giving us disruptive developments like artificial intelligence, self-driving cars and handheld super computers, our world is evolving in an exciting and challenging way.
It may be said that we are living in the age of disruption where risk and reward go hand in hand, but without staff, leadership and management processes and customer experience, we lack the most important success factors.
Research shows most NZ businesses are trying to remain positive about their current position as well as the general business atmosphere globally, and are commonly taking a cautious approach to adapting to change.
Ultimately when the dust settles it will be interesting to see which of the New Zealand businesses survive.
