Post on 26-Oct-2020
©Prof.Dr.JanOliverSchwarz,2017
SurveyandBenchmarkonDynamicCapabilitiesandOrganizationalFuturePreparedness
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©Prof.Dr.JanOliverSchwarz,2017
§ Sampleconsistof91multinationalcorporations
§ Thefuturepreparednessactivitiesin16%ofthesurveyedcompaniescanbeperceivedasaDynamicCapability
§ Complexity ofthebusinessenvironmentisassociatedmainlywiththeconvergenceofenablingtechnologiesandtheemergenceofmanyandchangingregulations
§ Amajorfactoraddingtothedynamism inthebusinessenvironmentisseeninthepotentialformajordisruptionsinthenextfiveyears
§ Whilethemajorityscans theentirebusinessenvironment,includingallenvironmentalsegments,leaders arenotseenbythemajorityasthosesensingnewopportunitiesbeforetheyfullyemerge,norhavetheybeentrainedindoingso
§ Abroadrangeofmethods isappliedtoprepareorganizationsforthefuture.However,lessemphasisisbutonanalyzingfuturecompetitormovesandchallengingbasicassumptionsabouttheindustryandthecurrentbusinessmodel
§ Futurepreparednessactivitiesarenotusedonawiderscaletoventureintonewbusinessactivities
§ Identifyinglonger-termfuturetrendsisseenbyalargergroupascontributingtothedevelopmentofnewproductsandservices,leadershipisstrugglingwithmakingdecisionsunderuncertainty
§ Futuretrendsandscenariosdoshapestrategy.Lessdevelopedareleadershipskills inadaptingtoachangingbusinessenvironment
Executivesummary
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©Prof.Dr.JanOliverSchwarz,2017
I. Introduction
II. Results
III. DiscussionPoints
Tableofcontents
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©Prof.Dr.JanOliverSchwarz,2017
Objectives§ Dynamiccapabilitieshavebeendefinedinmanagementresearchasakeysourceofcompetitiveadvantage,in
particularinindustriescharacterizedbyvolatility,uncertainty,complexityandambiguity(VUCA-world)§ Whileweobserveanincreaseinactivitiessuchastrendmanagementorscenarioplanninginfirmsacross
industries,itremainsuncleariftheseactivitiesaddtothedynamiccapabilitiesofafirm
Aim§ Understandhowactivitieswhichsupportthefuturepreparednessofafirmaddtoitsdynamiccapabilities§ Investigateandbenchmarkanorganization'sfuturepreparednessanditsapproachtocompetingformarkets
ofthefuture
Scope§ Largemultinationalcorporations§ Strategydepartments
ThestudywascarriedoutincollaborationbetweenAarhusUniversity(Denmark)andAMDAcademyforFashionandDesign(Munich,Germany)in2016
Objectives,aimandscopeofthestudy
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©Prof.Dr.JanOliverSchwarz,2017
Descriptionofsample:91participants
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Germany28%
OtherEurope19%
Netherlands9%
France7%
UnitedKingdom
7%
UnitedStates12%
Asia
9%
LatinAmerica
5%
Australia3%
Africa1%
CountriesAutomobiles&Components
6%
CapitalGoods11%
Commercial&ProfessionalServices
3%
ConsumerDurables&Apparel9%
FinancialServices11%
Food&StaplesRetailing
8%Materials
5%
Pharmaceuticals,Biotechnology&LifeSciences
12%
TechnologyHardware&Software10%
Telecommunication&Media
8%
Transportation10%
Utilities7%
Industries
©Prof.Dr.JanOliverSchwarz,2017
I. Introduction
II. Resultsa) EnvironmentofyourOrganizationb) FuturePreparedness
III. DiscussionPoints
Tableofcontents
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©Prof.Dr.JanOliverSchwarz,2017
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Industrystructure:Manycompetitorsfromunexpectedsources
Marketstructure:Fuzzyboundariesandcomplex
segmentation
Enablingtechnologies:Manyconverging(complex
systems)
Complexity of your environment
Stronglydisagree Disagree Neutral Agree Stronglyagree
Environmentofyourorganization
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Comments
§ Theentryofnewcompetitorsisnotseenasaseverethreatacrossindustries,inparticularintheCapitalGoodsandUtilitiesindustries
§ Over40%agreethatmarketboundariesarefuzzy,inparticularintheTechnology,Hardware&SoftwareandMaterialsindustry
§ Majorityagreesthatenablingtechnologiesaremanyandthattheyareconverging,especiallyintheTechnology,Hardware&SoftwareandFinancialServicesIndustry
©Prof.Dr.JanOliverSchwarz,2017
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Regulations(federal,state,etc.):Manyorchangingrapidly
Dependenceongovernmentfundingandpoliticalaccess- High:sensitivetopolitics
andthefundingclimate
Complexity of your environment
Stronglydisagree Disagree Medium Agree Stronglyagree
Environmentofyourorganization
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Comments
§ 50%ofparticipantsagreeonthemayorroleofregulationandtheconstantchanges,addingtocomplexityinthebusinessenvironment,foremostintheFinancialServicesindustry
§ Governmentfundingandpoliticalaccessarenotcriticaltomorethan50%,inparticularintheConsumerDurablesandApparelindustry
©Prof.Dr.JanOliverSchwarz,2017
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Accuracyofpastforecasts- Low:resultsdiffergreatlyfromforecasts
Marketgrowth:Rapidandunstable
Dynamism of your environment
Stronglydisagree Disagree Medium Agree Stronglyagree
Environmentofyourorganization
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Comments
§ Nearly60%reportthatpastforecastwereaccurate,inparticularintheFood&StaplesRetailingandMaterialsindustry;onlyroughlyover20%reportlowaccuracyofforecast(e.g.ConsumerDurables&Apparelindustry)
§ Over60%disagreethatmarketgrowthisrapidandunstable,foremostintheConsumerDurables&Apparelindustry,notaddingtothedynamicsofthebusinessenvironment
©Prof.Dr.JanOliverSchwarz,2017
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Growthopportunities:Haveincreaseddramaticallyinthepastthreeyears
Potentialformajordisruptionsinthenextfiveyears- High:severalsignificantbusinessshocksareexpected,without
knowingwhichinparticular
Dynamism of your environment
Stronglydisagree Disagree Medium Agree Stronglyagree
Environmentofyourorganization
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Comments
§ Noclearpictureifgrowthopportunitieshaveincreaseddramaticallyinthepastthreeyears;thisseemstobeinthecaseinthePharmaceuticals,Biotechnology&LifeSciencesandTelecommunication&Mediaindustries
§ Over50%expectmajordisruptionswithinthenextfiveyears,foremostintheCommercial&ProfessionalServicesandTelecommunication&Mediaindustries,lesssointheFood&StaplesRetailingandMaterialsindustry
©Prof.Dr.JanOliverSchwarz,2017
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Industryriskiness:Veryrisky;afalsestepcanmean
myfirm’sundoing
Industrymunificence:Verystressful,exacting,hostile;veryhardtokeepafloat
Environmentdominance:Adominantenvironmentinwhichmyfirm’sinitiative
countsforverylittleagainstthetremendous
competitive,political,ortechnologicalforces
Hostility of your environment
Stronglydisagree Disagree Medium Agree Stronglyagree
Environmentofyourorganization
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Comments
§ 50%perceivetheirbusinessenvironmentnotasrisky,differenttakeintheCommercial&ProfessionalServices,Food&StaplesRetailingandFinancialServicesindustry
§ Over60%disagreethattheirindustryisveryhostile,exceptiontheCommercial&ProfessionalServicesindustry
§ 50%donotperceivetheirenvironmentasadominantoneinwhichowninitiativesarenotverypowerful,TechnologyHardware&Softwareindustrytakeaslightlydifferentperspective
©Prof.Dr.JanOliverSchwarz,2017
I. Introduction
II. Resultsa) EnvironmentofyourOrganizationb) FuturePreparedness
III. DiscussionPoints
Tableofcontent
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©Prof.Dr.JanOliverSchwarz,2017
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Reach:Wesystematicallyscanourentire
environmentincludingourcurrentbusiness,adjacentbusinessandfarawayfields
Scope:Wesystematicallyscanallenvironmentalsegments(technology,political,competitor,
customerandsocio-culturalenvironment)
Sources:Besidesnewsmediaetc.,wealsoscanculturalproducts(e.g.,
novels,movies)fortrends
Perceiving(Sensing)
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Over60%statethattheyaresystematicallyscanningtheirbusinessenvironmentwhilereflectingabroadscope,interestinglylessintheConsumerDurables&Apparelindustry
§ Maybenotsurprising,70%statethattheyarenotincludingculturalproductsintheirscanningactivities,buttoanextent,theCommercialandProfessionalServicesindustryisanexception
©Prof.Dr.JanOliverSchwarz,2017
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Timehorizon:Wesystematicallyscanall,theshortandmediumtolong-term
(mediumbeyond4years)
Sensors:Oursensorsensurethatwedetect80%ofalltrendsthatwillshapeourindustryinthenext5- 10years
Perceiving(Sensing)
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Over50%statethatshort-,medium- andlong-termtimehorizonsareconsideredinscanningtheenvironment;thisdoesnotapplytotheConsumerDurables&ApparelandFood&StaplesRetailingindustries
§ Alsoover50%stateconfidenceintheirabilitytodetect80%orrelevanttrendsshapingtheirindustry,inparticularintheMaterialsandTelecommunication&Mediaindustries
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Leaders:Ourleadersareabletosensebusinessopportunitiesbeforetheyfullymaterializeandtochallengethestatus-
quointheindustryandinourfirm
Trainingleaders:Managershavebeentrainedinhowtosensenewbusinessopportunitiesandhowtochallengeestablishedbusinessmodelsinthe
industryandinourfirm
Perceiving(Sensing)
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Whilealittleover30%statethatleadersaretheonesensingnewbusinessopportunitiesearly,over40%statethatleadershavenotbeentrainedindoingso
§ Bothleadershipquestionshavehighdegreeofmediumorneutralanswerswhichallowtheassumptionthattheroleofleadersinsensingnewbusinessopportunitiesisnotentirelyclear
§ Nospecificindustryresultscanbereported
©Prof.Dr.JanOliverSchwarz,2017
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Methods:Wesystematicallyutilizearangeofformalmethods(suchas
scenarioanalysisandroadmapping)tocreatealternativefutureoutlooks
Competitors:Weapplymethodssuchasbusinesswargamingtounderstandhow
competitionmightchange
Prospecting
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Over50%statethatawiderrangeofmethodsisusedtogeneratefutureoutlooks,thisappearstobethecaseinparticularintheCapitalGoodsandMaterialsindustry
§ Less,around40%,statethatbusinesswargamingisappliedtoanticipateandunderstandthecompetitivedynamics,inparticularintheTechnologyHardware&Softwareindustry,considerablylessintheConsumerDurables&Apparel
©Prof.Dr.JanOliverSchwarz,2017
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Systemsthinking:Wecontinuouslyanalysethekeyfactorsthatinfluenceour
currentandtargetmarkets,andusemethodsthatpermittouncover
systemiceffects(suchascross-impactanalysisorsystems-dynamicsanalysis)
Numberofalternatives:Multiple.Weoftenconsidermultiplefuturesandhavesystematicwaysfordefiningstrategiesinenvironmentswithdifferentlevelsof
uncertainty
Prospecting
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Lessemphasis(30%)isputonembracingsystemsthinkingorapplyingtoolssuchascross-impactanalysis;thisappearslesstobethecaseintheMaterialsindustry
§ While40%state,thatmultiplealternatives/futuresareconsidered,assuggestedinScenarioPlanning,also30%statethatthisisnotthecase,focusingononealternative
§ MultiplealternativeareinparticularlessinvestigatedintheAutomobile&Componentsindustry
©Prof.Dr.JanOliverSchwarz,2017
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Readinesstolistentoscoutsandexternalsources:Theorganizationisopen
(Bringingexternalinformationintothecompanyandmaintaininganexternal
networkisencouraged)
Willingnesstotestandchallengebasicassumptions
Prospecting
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Morethan50%statethatthereiswillingnesstolistentoexternalscouts,lessinConsumerDurables&Apparelindustry,butinparticularsointheTelecommunication&MediaandMaterialsindustry
§ However,thewillingnesstochallengeandtestbasicassumptionsisoverallalittlelower,againinparticularlessintheConsumerDurables&Apparelindustry
©Prof.Dr.JanOliverSchwarz,2017
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Ourexplorationsactivities:Bothcontinuousandissue- drivenscanning
thatcanbetriggeredbottom-upandtop-down
Explorationcapability:Wehaveinthepastrepeatedlyexplorednewmarketsthatweredistanttoourcurrentbusinessandtypicallyfeelthatwehavehadan
informationadvantageoverourcompetitors
Probing
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Nearlyequallydivided:explorationactivitiesaretriggeredtop-downandissue-drivenorbothbottom-upandtop-downdrivenbycontinuousissue-scanning
§ Only30%statethatinthepastnewmarketwereexploredandthatacompetitiveadvantageinregardtoinformationexisted,e.g.Utilitiesindustry,quitetheoppositeperceptionintheFinancialservicesindustry
©Prof.Dr.JanOliverSchwarz,2017
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Dedicatedunit:Wehaveadedicatedunitthathasthemandatetoexploreand
developnewmarketsthatcanbecomeasignificantcontributortoouroverall
revenues
Scopeofprobing- high:ouractivitiesforexploringnewmarketsoftentaketheformofventureinvestments,alliances,acquisitions,mergers,andsubstantialinvestmentsinassetssuchasfactories
Probing
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Themajoritystates(roughly50%)thatadedicatedunitintheirorganizationisexploringanddevelopingnewmarkets,thisappearstobeinparticularthecaseintheCapitalGoodsindustry,theoppositeintheConsumerDurables&Apparelindustry
§ Only30%describetheirapproachtoprobing(ventureinvestments,etc.)ashigh,e.g.theMaterialsindustrywhiletheConsumerDurables&Apparelindustryonaveragedoesn’tfollowsuchanapproach
©Prof.Dr.JanOliverSchwarz,2017
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Impact:Byidentifyinglonger-termfuturetrendsorissuesearly,westartbuildingnewknowledgeinourfirmthathelpsustodevelopnewproductsorservices
Newproductsandservices:Longer-termfuturetrendsorscenariosoftenarethestartingpointforthedevelopmentofnewproductsandservicesatourfirm
Learning
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Over40%agreethattheidentificationoftrendsleadstonewknowledgethatinrerunsupportsthedevelopmentofnewproductsandservices,foremostintheCapitalGoodsandMaterialsindustries
§ Further,40%statethattrendsandscenariosarethebasisfornewproductsandservices
©Prof.Dr.JanOliverSchwarz,2017
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Decisionmaking:Facedwithuncertaintiesinourindustry,ourleadersoftendonothesitatetotakestrategic
decisions
Trainingleaders:Ourleadershavebeentrainedinmakingdecisionsunder
uncertaintyandperceiveuncertaintyinourindustryalsoasasourceof
opportunities
Learning
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Theleadership-questionsinthissectionrevealthatroughly50%ofleadersstrugglewithtakingstrategicdecisionswhenconfrontedwithuncertaintyintheirindustryandthatroughly50%oftheleadershiphavenotbeentrainedindecisionmakingunderuncertainty
§ Acrossindustriesthisappearstobealessdevelopedissue
©Prof.Dr.JanOliverSchwarz,2017
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Strategy:Inshapingthestrategyofourfirmfuturetrendsand/orscenariosplaya
vitalrole
Shifting:Identifiedtrendsand/ordevelopedscenariosregularlysupportinshiftingresourcesofourfirmintonew
strategies
Transforming
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Over50%agree(roughly20%stronglyagree)thattrendsandscenariosplayavitalroleinshapingthestrategyofafirm
§ Asmallernumber,40%,statethattrendsandscenariossupporttheshiftingorreallocationofresourcesintonewstrategy,foremostintheMaterialsindustry,lessinConsumerDurables&Apparelindustry
©Prof.Dr.JanOliverSchwarz,2017
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Leadersatourfirmareabletoadapttochangesintheenvironmentandto
reconfigureresources
Trainingleaders:Leadershavebeentrainedinadaptingtochangesinthe
environmentandreconfiguringresourcesaccordingly
Transforming
Stronglydisagree Disagree Medium Agree Stronglyagree
Futurepreparedness
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Comments
§ Whileitisstatedthatleadersareabletoadapttochangeandtoreconfigureresources(40%),only30%statethatleadershavebeentrainedtodoso
§ TheabilityofleaderstoadaptandtoreconfigureresourcesappearstobehigherintheFood&StaplesRetailingindustry,whilelowerintheConsumerDurables&Apparelindustry
§ Trainingleadersinthiscontextappearstobealowerpriority
©Prof.Dr.JanOliverSchwarz,2017
I. Introduction
II. Results
III. DiscussionPoints
Tableofcontent
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©Prof.Dr.JanOliverSchwarz,2017
HowmanycompaniesinoursampleexecutefuturepreparednessactivitieswhichcanbeperceivedasaDynamicCapability?
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DynamicCapability
16%
84%
Assessmentoffuturepreparedness activities
Thedynamiccapabilitylens explainswhysomefirmsare“adeptatanticipatingandexploitingopportunitiesenabledbyadvancesintechnologyandrapidchangesintheirmarketspace,whileothersstruggleorgooutofbusiness.”1 Dynamiccapabilitiesare“thefirm’sabilitytointegrate,build,andreconfigureinternalandexternalcompetencestoaddressrapidlychangingenvironments.”2
1Day,G.S.&Schoemaker,P.J.H.2006.Peripheralvision:detectingtheweaksignalsthatwillmakeorbreakyourcompany.Boston:HarvardBusinessSchoolPress;2Teece,D.J.2007.Explicatingdynamiccapabilities:thenatureandmicrofoundationsof(sustainable)enterpriseperformance. StrategicManagementJournal,28(13):1319-1350.
Comments
§ Thefuturepreparednessactivitiesin16%ofthesurveyedcompaniescanbeperceivedasaDynamicCapability
§ Noclearindustrytrendcanbeassessed
©Prof.Dr.JanOliverSchwarz,2017
Prof.Dr.JanOliverSchwarzMunich,GermanyMobile:+49(0)1702112139Email:josc@mgmt.au.dk
Contact
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