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Can big business transform to a new paradigm?

October 29, 2012

Deloitte recently released a fascinating publication titled Toward Zero Impact Growth. Taking the general premise that our economy is bumping up against some hard limits in terms of resource availability, climate impact and a context of growing population their postulation is that the global economy and business in particular needs to change – and fast.

Leon Richards of Good Talent explores this.

Of particular interest, Richards notes, is the work that Anneke & Ralph have done around mapping the current position of a number of high profile companies on that path of transformation. Some solid analysis using a robust trajectory model developed by Volans clearly highlights where these organisations have got to and what still needs to be done.

What struck Richards from these results was the relative slow pace of progress toward maturity on this scale for many of these businesses. The fact that most of them seem to be battling at an “enterprise level” of development highlights the difficulty for most companies to break free of the myopia around their own business confines and parameters. The implications of truly embedding sustainable business practice mean engaging in change right the way up and down an organisational value chain. This barrier between internal and external or as the model articulates it “Enterprise” and “Ecosystem” seems to be a big jump.

There looks like a rich seam of research could be done here, looking through a sustainability lens at the difficulties incumbent organisations face when attempting to make this internal to external shift. Organisational structures, employee capacities, leadership, innovation, collaboration will all weigh heavily on the eventual success of shifting to another state of operation for a business. We all know the penalties businesses face for not changing, history is littered with their ghosts.

During a lecture last week at the LSE, Giles Hutchins made a bold prediction from his latest book The Nature of Business, he said that by 2020 at least 50% of organisations in business today would be gone. Why was he so sure of this prediction? Hutchins felt that current trilemma we are experiencing, financial, environment and social are just the beginning of a rapid transformation to new operating paradigm for everything everywhere including business. Jack Welch, of GE fame stated that for a business, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Perhaps this is what we are experiencing right now – change but on a scale and at a pace not experienced before.

Can incumbent brands and businesses transform to a new paradigm and do so quickly? Richards thinks the changing environment may be too turbulent for most big businesses to adequately adapt to, while Hutchins points to some brands already on the road to transformation e.g. Nike, Google, Akzo Nobel, Toyota, Interface.  If most can not, then is this going to mean a catastrophic breakdown of life as we know it? Perhaps not.

The answer to how business operates within a new sustainable paradigm tomorrow may lie at the periphery of what exists today. Outside of the behemoth brands and multinational corporates exists a whole eco-system of smaller companies, typically relatively young who don’t need to change because they have consciously embedded this new paradigm in their DNA from the very start.

To join the Nature of Business FaceBook community click here

For the original and full post please see The Good Talent Blog

One Comment leave one →
  1. October 29, 2012 2:09 pm

    I believe big business can change. but only by learning, what to still keep of what worked in the past, and what to replace. I believe that we need to develop organisation designs and leadership within them that are more adaptable, more able to learn, with clearly defined accountabilities and autonomy at each level. This means leadership at all levels in the organisation, including owning strategy and governance applicable to that level.

    Just as each element in an ecosystem owns, leads and governs itself; through autonomous exchange with other elements.

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