The world is characterized by uncertainty. Monumental problems, including climate change, are increasingly coming into focus. At the same time, all business models are subject to a natural cycle of growth, maturity, stagnation and decline – the speed is constantly increasing thanks to AI and digital possibilities. In order to remain competitive and successful, companies must continually adapt and innovate their strategies.
Ambidexterity is required in times of change (ambidexterity)
This transformation process begins with the optimization of existing business models (exploitation). Instead of breaking completely new paths, companies should first use their existing resources and strengths to increase their efficiency and consolidate their market position.
The second phase is to explore new business models (exploration). This requires creative thinking and a willingness to take risks. Companies must venture into unknown territory, try out innovative ideas and develop new approaches to meet changing market demands.
The global three P challenge
The three biggest challenges companies are currently struggling with are the three Ps: People, Planet and Profit. These three key challenges form the cornerstones for the continued existence and success of companies in a world in which social responsibility, sustainability and economic profit must find a balance.
The shortage of skilled workers, which is noticeable in almost all industries today, represents an enormous hurdle for companies. The so-called “War of Talents” is over, the talent has won. The sought-after skilled workers are scarce and in demand like never before. In this competitive environment, attracting and retaining talent becomes a critical success factor. Companies are therefore forced to focus on creating an inspiring corporate culture that enables employees to achieve their full potential. At the same time, agility and alignment with the meaning and purpose of work in an organization are central to attracting and retaining the best talent.
The Golden Circle, which describes an organization driven by a clear purpose, plays a crucial role. The “why” (WHY), the “how” (HOW) and the “what” (WHAT) are the core aspects of this approach.
The WHY is the heart of the Golden Circle. It answers the fundamental question of why the organization exists, what its higher purpose is, and what contribution it seeks to make to society. The HOW describes the way the company implements its purpose. It refers to the values, principles and methods that the organization follows to achieve its mission. The WHAT represents the specific products, services or solutions that the company offers. This approach can help solidify an organization’s identity and success and provide it with strong direction.
There is no Planet B! Sustainability should not just be a buzzword, but a crucial part of the company’s strategy. It significantly influences the design of new business models. Given climate change and the environmental impact of economic activities, the urgency to establish sustainable business practices is increasing. These must become an integral part of corporate strategy so that we take planetary boundaries into account.
The future belongs to digital and adaptable companies. It is no longer enough to just have a digital strategy; adapting the entire company strategy to the digital world is crucial. This transformation opens up new opportunities to succeed in a rapidly changing economy. Companies need to rethink their business models to become more efficient and competitive. It’s not just about maximizing profits, but also about creating long-term value and customer satisfaction.
The answer to these challenges lies in the “double transformation” – this is the combination of digitalization and sustainability. Even if at first glance the two subject areas pursue different goals, they open up opportunities for a sustainable and at the same time profitable transformation of the economy towards neo-ecology. It is worth considering both topics synergistically on an equal footing and not separately. At the same time, sustainability gives the digital transformation the necessary framework and meaning. Because without digitalization, measuring progress (data) or implementing new business models such as the circular economy is hardly possible.
Transformations are therefore necessary in order to position companies sustainably. A culture of continuous learning and adaptability are the key to long-term success. Companies that internalize this lesson and continually evolve will be better equipped and more resilient to meet ever-changing challenges and opportunities.
The content of this bit of knowledge comes from a keynote speech as part of the Scale-up Leadership Program by Robert Szilinski, CEO of esentri AG and expert in transformation.