- In a rapidly evolving environment, businesses need to prepare for change.
- 55% of businesses who report above-average agility are experiencing above-average revenue growth.
- More than half surveyed businesses are not currently using exponential technologies.
The latest future[inc] report – The Future of Business, commissioned by Chartered Accountants Australia and New Zealand, confirms that today’s rapidly evolving commercial environment calls for businesses to be increasing agile.
Rick Ellis, CEO of CA ANZ, notes that, “Agility is a word that is bandied about a lot these days”. Nonetheless, the report, based on 1,500 responses from business leaders on both sides of the Tasman, found 55% of businesses that report being above-average in terms of agility were also experiencing above-average revenue growth. It makes agility a new metric to work towards.
Business agility is often conflated with business size. There is a prevailing perception that large businesses are too weighed down by bureaucratic systems to respond to change, while small businesses are free from such processes, making them agile and innovative. In reality, agility is far more complex than this dichotomy, and The Future of Business highlights that agility is a characteristic that business leaders cannot afford to overlook.
To allow businesses to think in a more tangible way about how agility affects their performance, The Future of Business breaks the concept of agility down into five separate elements: flexibility, speed, leanness, learning and responsiveness. According to Ellis, “The biggest issue today is leanness, with more than two in five businesses saying they have underutilised resources.”
Ellis notes that many businesses are aware of the need to more proactively and holistically consider these issues. Nonetheless, he adds, “What businesses are focusing on is dependent on their size. Large business are prioritising increasing customer satisfaction and investing in digital, while small business is focused on improving cash flows and marketing methods.”
Digital innovation underpins improved metrics
The tools to support business agility are changing rapidly. Importantly, The Future of Business found that digitally advanced businesses perform better on a range of metrics including revenue growth, profit margins, innovation and talent attraction.
“More than half of surveyed businesses (58%) are not currently using any exponential technologies, which include robotics, drones, 3D printing, blockchain, autonomous vehicles and artificial intelligence, says Ellis. “But three in five are expecting to take up at least one of them in five years’ time.”
Ellis sums up the situation, cautioning, “While all exponential technologies won’t apply to every business, those who fail to embrace new opportunities risk missing out.”
Of course, not everything in a business should change. The Future of Business notes that the most successful businesses have designed their organisations with a base of stable elements, while still leaving room for innovation and a dynamic response to change. And it seems businesses in both Australia and New Zealand are preparing for change. Among those surveyed businesses that have a business model plan in place, 39% expect to review the organisation’s plan more frequently in the future. Close to one in two (47%) will be reviewing both their marketing and customer engagement methods more often.
Globalisation of markets and technological progression mean that big shifts are happening more quickly than ever before. As The Future of Business warns, businesses will not have long to respond. Agility may come more naturally to small businesses, however large businesses tend to have bigger buffers, allowing them to be more resilient and better able to maintain order when faced with change. The bottom line is that all businesses will have to work at balancing the dynamic and stable elements of their organisation to respond to the changing environment.
Will your organisation meet the challenge?
Understand why agility is so critical in today’s fast-changing commercial environmentThe latest future[inc] report – The Future of Business
Your Library: Maintaining relevance in the digital age
Looks at the skills and services management accountants need to master to avoid obsolescence in the digital age, such as a holistic understanding of costs and the ability to use predictive analytical techniques.Read more
Read our media release
Australasian businesses focused on down-home issues, not global onesRead more