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Adaptability Strategies

Does today's economic environment put more pressure on management than ever before?

15Dec

The barriers to entry which once helped more established companies remain dominant over their small, up an coming rivals, have been lowered considerably in the last couple of years. Advancements in technology have made it far easier for two people to come up with something innovative in their basement. Companies like 'Johnny Cupcakes' were started on less than $7,000 and by one man. Johnny Cupcakes' now turns over nearly $4 million, proving that anybody with a good idea can make millions if they have the talent and drive to make it as an entrepreneur.

The rise in competition hasn't meant that there's now more winners, quite the opposite, the margins are now even smaller and to get to a stage where you're profitable is incredibly difficult. Market Leadership isn't the title that it once was either, the Harvard Business Review calculated that the likelihood of the market share leader being the profitability leader has decreased from 34% in 1950 to 7% in recent years.

The marketplace is such that companies can even find it difficult to identify who they're competing with and even what industry their company sits in. Coupled together, everything is made more uncertain, which increases the level of anxiety within the ranks of senior management.

The same question resurfaces all the time, namely, how do you plan for a business environment that's changing all the time? Unfortunately, organisational strategy must be revisited time and time again, with one overarching strategy that lasts for five years never likely to work as innovative ideas become redundant in much shorter timeframes.

This means that organisations must look at their ability to plan and use it as a way of keeping up to date with organisational trends. If this is done successfully, an organisation will be able to read and act upon marketplace signals that are going to affect its business model. Technology will of course play a massive role in this, with data used to show real-time trends.

Senior Management have never been under more strain than they are in today's economic climate. The drive for superiority will require a change in organisational decision making that puts emphasis on agility, rather than rigidity. For established companies, market share no longer suffices, it's now of paramount importance that they try and match the innovative outputs of their smaller competitors. 

The ability to be malleable is essential in a business environment that actively encourages people to invest their time in their own entrepreneurial endeavours.

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