Looking beyond the obvious
Operational changes are essential to picking the successful big bets
Companies have already learned many of the lessons of globalization, such as the need for flexibility, agility and localization. As globalization enters its next phase, they must prepare to make decisions on markets and investments without always knowing all the possible outcomes.
Nearly 50% of respondents say that business intelligence and analytics will have the greatest impact on their international expansion strategy.
No matter their size or sector, to choose the best opportunities from a wide variety of markets, companies must adapt their operations to a new growth cycle — one that requires highly disciplined and rigorous strategic planning, execution and learning, all supported and enhanced by technology.
“Only those companies that stand out as innovators are likely to succeed in a slow-growth environment. To capitalize on pockets of growth, businesses need to be bold, entrepreneurial and willing to take risks on new products and services.”
- Maria Pinelli, Global Vice Chair, Strategic Growth Markets, Ernst & Young
The following are some recommendations for a possible approach to this new growth cycle:
- Strategic planning: allocate resources in a bold and focused way.
Deciding how to apportion scarce resources involves resolving many trade-offs and conflicts between slow-growth and rapid-growth markets, short-term and long-term returns, and volume-to-margin ratios.
Once companies decide on the right balance of these elements, they must settle on a handful of key investments that offer the best promise of future growth. Making these bets clearly requires a high degree of confidence that an investment will work.
Technology plays a big role here: business analytics, for example, can help companies build an investment case, evaluate risks, look at potential scenarios and simulate outcomes.
- Execution: make your big-bet investments as local and granular as possible.
Succeeding in the world’s new markets means being immersed in them — tailoring offerings to meet the exacting needs of local customers, forming close relationships with local officials and communities, manufacturing locally or establishing regional supply chains.
Companies must then empower local managers to make decisions so that they can act on opportunities swiftly. Again, technology can help by providing corporate parameters for decision-making.
- Learning: transform your company into a “learning organization.”
It is no news to anyone that rapid change is the new normal in business today and that many outcomes will remain unpredictable. Yet companies can learn to manage change better. This is where the power of technology really comes into play.
Applications such as business intelligence and analytics, mobility solutions and social networking allow businesses access to a wealth of data that they can feed into future strategic planning and use to become lean and flexible organizations that will thrive in the global economy of the future.
An organization with a mindset of continuous learning will be best equipped to manage successfully in a turbulent and ever-shifting business landscape.