Ricoh has announced that businesses may not be overcoming technology-led disruption as fast as they think. Three quarters of respondents to an Economist Intelligence Unit study report they are not reacting to changes fast enough and only 24% can rapidly take advantage of new opportunities or adapt to unexpected changes.
The research, sponsored by Ricoh, shows that rapid cultural and technological change has left many European businesses overconfident about the true speed at which their organisation is responding to change.
Richard Pinker, MD of Ricoh SA said, ‘We see no deviation from this norm in South Africa. The irony is that 48% of business leaders compare their businesses to speedboats as opposed to supertankers (17%) while they believe the opposite of their competitors.’
The reality is, as they seek to change faster, businesses are being clouded by the triple challenge of a rapidly evolving workforce, technology-led disruption and the underlying core business processes that ensure change is sustainable. The study cautions business leaders not to become complacent by citing supporting findings from a recent World Economic Forum report to enhance economic competitiveness. It shows that overall European countries are ‘trailing behind the United States, Japan and Canada in building a smarter economy’, across a wide range of metrics.
The new report, called The Challenge of Speed, shows that the speediest companies excel in three key areas, product and service innovation, adoption of new technology and business process change. Importantly, these requirements go hand in hand, yet very few companies can check all three boxes. Only one in three (29%) can rapidly re-engineer processes to support change.
In addition, in faster companies, successful change initiatives originate from line managers or department heads than organisations where change is initiated by the C-Suite. Some organisations, where change is initiated by the C-suite, appear to have already fallen behind their competitors. They are twice as likely (53%) to say they need to move somewhat or significantly faster in the next three years than a company where it originates from department heads (27%).
David Mills, COO, Ricoh Europe, said, ‘For many business leaders the pressure and perceived complexity to change business operations from traditional to more digital ways of working is obscuring the true rate of success. As the latest research shows, the benefits to being able to rapidly adapt can only be achieved when innovation, optimised businesses process and employee engagement are implemented together. Also, C-level executives are time poor so it is reassuring to see that by diffusing some of the responsibility they can benefit from better agility and more successful change initiatives.’
Masking the real rate of change may also be attributed to the challenges and bottlenecks inside companies. The leading barrier to greater agility is the inability to effectively link technology platforms. This will inevitably lead to information silos and will prevent business leaders from seeing the changes in the company as a whole. The second highest barrier is a cultural one.
Business leaders state they have difficulty getting employees, business units, or functions to adopt a common approach and only one in 10 respondents believe there is clarity about the direction of change with both the leadership team and front-line workers. It indicates a cultural collision between employees – many of whom will be the digitally-literate generation Y and their more traditionally-minded managers – as they try to move forward in different directions. The situation is further compounded by bureaucratic processes. Only 36% of respondents say that their firms eliminate unnecessary approvals or controls in the search for speed.
Mills said, ‘The rapid pace at which technology is disrupting markets and reshaping relationships with customers has driven organisational agility to the top of the business agenda. Fast companies are not only innovative and enthusiastic adopters of new technology but also able to change core business processes to ensure true organisational change and involve all employees on the journey. Only by reviewing all three areas, will business leaders be able to evaluate the business as a whole and truly state that speed is a part of their culture and that they are operating with the DNA that is required to succeed into the future.’