In developing a future-back vision, companies must bring the outside-in. This involves understanding how global challenges and megatrends are impacting customer expectations, employee desires to work for a purposeful company and stakeholders who can facilitate a right-to-operate in new ways.
Companies also need to bring the inside-out. This starts by reimagining the core business model and business practices, and expanding out into the external ecosystem of partners, stakeholders and wider society.
Companies that are agile in development, close to the customer and fast to market are better able to spot opportunities and deliver products to the market before the competition. Companies that can identify customers’ changing preferences, such as supporting products that address global challenges such as reducing climate pollution and waste, are rewarded by the market. Some examples of these successful companies include:
- A footwear company that uses renewable and recyclable material to make its sneakers. The company received its latest round of funding based on a valuation of US$1.4b.
- A plant-based food company valued at US$9b that offers meat alternatives that can appeal to both vegetarians and omnivores.
- An eyewear company, valued at US$1.8b, and made famous for online ordering so customers can try the eyewear from the comfort of their homes, donates a pair of glasses for every pair purchased to those in need.
Each company identified growing customer demand for environmentally sustainable, animal-conscious or socially supportive products early on and set out to design solutions to meet these needs. These smaller companies highlight the opportunity to solve for the future while developing profitable products today. By identifying the megatrends and developing future-back scenarios, large corporations can capitalize on these opportunities as well.
New business models can transform entire industries — and societies
To seize the upside of disruption and take advantage of the opportunities embedded in addressing global challenges, companies need to reinvent business models and value ecosystems. This requires new capabilities and approaches to traditional strategic planning, as well as a leadership and culture shift within organizations — being close to the customer, agile in development and fast to market. The resulting growth from addressing global challenges has the ability to transform societal and economic systems around the business.
For example, in addressing the need for mobility, a ride-sharing company disrupted the existing transportation industry with a solution that changed mobility as we knew it. They created a service that matched supply and demand and established a simple method for earning money through flexible means. As ground zero for the “gig economy,” this company’s business model has transformed entire industries, from shopping to food and home services. It has also empowered individuals to earn additional income outside of traditional employment structures.
According to a recent Upwork Freelancing in America study, more than one-third of US workers participate in the gig economy. By 2020, The International Labor Organization says gig workers will account for 43% of the US workforce. The gig economy is here to stay and will continue to evolve as a way for individuals with under-paying jobs to make ends meet on flexible terms.
Although companies do not have a direct impact on how much a teacher, social worker or other critical professions within society make, they can empower their ability to earn additional income outside of traditional careers. Solving a problem can turn into a multi-billion-dollar business. It also can become the lead domino for innovation across society, empowering people and helping to address global challenges.
Solving global challenges can be profitable
Despite their desire to develop innovative solutions that address global challenges, CEOs recognize the systemic constraints working against them. These can include: corporate performance metrics based primarily on short term share price; CEO and executive compensation tied to short-term performance; board attitudes, skills, composition and leadership; and regulatory requirements.