Gem of the day

Economist writer Schumpeter has a new column summarising two new reports on risk, and what their contents could mean for business in 2013. He couldn't be further from the point:

"The more you read, the more risks you see; eventually, you succumb to nervous exhaustion...[nevertheless] these reports not only provide warnings about dangers that can be avoided by better planning or clearer thinking. They also suggest opportunities."

The landscape of trends presented in these reports might not be news; rising inequality, unstable financial markets, climate change, resource scarcity, health crisis. But so far few companies have seriously changed the way they do business in response to any of those trends (Danone is a contender; Unilever, Kingfisher, GE, IBM and others aspire to). The past few years indicate the complexity and threat of these trends is only increasing; in the words of Frost & Sullivan, "bringing new competencies into play at half the life-cycle speed of the past decade." This all adds up to serious implications for business.

Companies face a world where the rules of the game are beginning to require more than delivering against short-term financial targets and producing a CR report. That means "better planning" and "considering opportunities" are not going to help any company find a strong, sustainable and long term direction for their business model in an operating environment that is fundamentally changing. 

Linda Sanford of IBM calls it "the golden age for transformation". It's also the start of a great disruption, and that won't be pleasant for any company silly enough to listen to Schumpeter.

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