An upended business environment will be affected by the following macro factors in the coming decade, according to Gartner
The last two years have upended the business world as we knew it. The COVID-19 pandemic has been a catalyst for societal changes, spurring a reset in strategy across many industries. To navigate this new landscape, executive leaders must understand the macro factors that will reshape business in the next decade.
- The Threat of Recession: Although COVID-19 was the trigger for recent economic volatility, markets were already fragile before the pandemic. What businesses do now is critical for success during and after a downturn. Companies need to make early, decisive decisions about resource allocation and investment in growth. Managing spend, securing talent, and accelerating digital transformation are essential.
- Systemic Mistrust: Even before the pandemic, trust in global corporations was at an all-time low. Recent events have only exacerbated this, leading to supply chain and talent shortages, and overall brand mistrust. To overcome this, companies must focus on customer value, building tailored and personalized connections to individual needs. Executives must also consider whether consumers will remain loyal to legacy brands or switch to those that offer the experience they want.
- Poor Economic Productivity: The move to digital work and the rise of hybrid and remote work has highlighted the importance of workplace productivity. Executives are starting to examine outdated technologies, bureaucratic practices, and process inefficiencies. However, it is important to acknowledge that employees are being asked to do more with less while facing rapidly changing conditions. Organizations need to rethink how work gets done and who does it to enable responses to disruptions and change. Failure to do so will exhaust employees and make them less willing and able to stay engaged and productive.
- Sustainability: Environmental sustainability has cracked the top 10 priorities for business leaders, reflecting a significant increase in interest. According to the 2022 Gartner CEO and Senior Business Executive Survey of over 400 senior business leaders about their 2022-23 priorities, “environmental issues” came in ninth, with 9% of respondents citing it as a top-three priority. Gartner writes that while this “may be a relatively small portion, (it) is the first time the category has ever cracked the top 10 and reflects a very significant increase in interest.” Customers, investors, regulators, and employees are all pushing for more action on this front, and businesses are realizing the benefits of a sustainable approach to driving efficiency and revenue growth.
- Talent Shortage: The economic slowdown and the talent market squeeze pose a unique challenge to organizations. Leaders need to be creative in acquiring new skills and capabilities without hiring new full-time employees. Organizations must keep in-demand talent and find the competitive talent they need, even as staff budgets contract or stay flat.
- Emerging Technologies: Adaptive AI, the metaverse, platform engineering, sustainable technology, and super-apps are all emerging technologies that will disrupt the business world in the coming decade. Companies that ignore these disruptions in their early stages pay a higher entry price later. It is crucial to understand how these key technologies will impact strategic ambitions in the years to come.
The COVID-19 pandemic is a human crisis that disrupted all business plans, but it was not a solo threat. It was a catalyst to a number of other macro factors to come to the foreground, like systemic mistrust and poor economic productivity. In combination, these factors require strategy resets for many industries, which will reshape business deep into the 2020s.
The six macro factors outlined above will reshape business this decade and require companies to rethink their strategies and approaches. Understanding these factors is essential for executive leaders to allocate resources and invest in growth, focus on customer value, increase workplace productivity, embrace sustainability, acquire new skills and capabilities, and prepare for emerging technologies. By doing so, businesses can not only survive but thrive in the next decade.
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