Business leaders 'over-confident' about coping with technology says EIU
Adaptability is not as widespread as claimed
Business leaders are "over-confident" about the speed at which their organisations are responding to technology-led change, according to research from the Economist Intelligence Unit (EIU).
The research among 460 senior executives across Europe found 92 percent thought "speed" was part of their business' culture. But only 24 percent said their organisations were able to quickly take advantage of new opportunities, or adapt to unexpected changes.
Three-quarters of respondents reported that they are not reacting to change fast enough.
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Perceptions of competitors were "similarly misguided", said the EIU. Business leaders surveyed were three times more likely to compare their business to a speedboat (48 percent) than a supertanker (17 percent), while believing the opposite of their competitors.
"Without a realistic understanding of internal and competitive landscapes, it can often become difficult for business leaders to guide their organisations toward positive change," said the EIU. "The study found that the real rate of change is masked by challenges and bottlenecks inside companies."
The EIU research established that the main barrier to greater agility is the inability to effectively link technology platforms. This can lead to information silos which prevent business leaders from seeing change right across companies.
The second barrier is a cultural one. Business leaders stated they have difficulty persuading employees, business units or functions to adopt a common approach.
Only one in 10 respondents believed there is clarity around the direction of change among both leadership teams and front-line workers. "This indicates a cultural disconnect between employees who are digitally-literate and traditionally-minded managers - as they try to move forward in different directions," the EIU said.
This is further compounded by bureaucratic processes. Only 36 percent of respondents said their firms eliminate unnecessary approvals or controls in the search for speed.
The research was sponsored by Ricoh. Phil Keoghan, CEO of Ricoh UK, said: "For many business leaders the pressure and perceived complexity of changing business operations from traditional to digitally-focused ways of working is obscuring the true rate of success.
He said: "The reality is that as businesses seek to change faster, they are often immobilised by various, and sometimes competing, factors. These include a rapidly evolving workforce, technology-led disruption and re-engineering underlying core business processes.
"While these all positively affect the evolution of organisations, they drive uncertainty on where transformation should begin."
According to the research, the "speediest" companies excel in the three key areas of product and service innovation, adoption of new technology and business process change.
These requirements go hand in hand yet very few companies can tick all three boxes. Only 29 percent can rapidly re-engineer processes to support change. In addition, in faster companies, successful change initiatives originate from line managers or department heads.
Organisations where change is initiated by the C-suite appear to have already fallen behind their competitors. They are twice as likely (53 percent) to say they need to "move somewhat or significantly faster in the next three years" than a company where change originates from department heads (27 percent).