Heidrick & Struggles: Accelerating Performance. How to Mobilize, Execute, and Transform With Agility
Industries are being disrupted at a faster pace, and not just by the increasing power of innovation in our ever more digital world. Once staid industries such as automotive face a confounding, once-in-alifetime shift because of the prospects for self-driving cars and the advent of ride-sharing apps, but that’s actually just the beginning of the challenge in this industry. Within just the past eight years, oil prices soared to $140 a barrel, with predictions that they would head to the moon, only to have them tumble briefly to less than $30 and now settle, at least for a time, around $40. Each sudden change in oil prices not only affects demand for travel but also shapes interest in, say, fuel-efficient cars or even electric models, and everyone in the automotive industry had best be ready. Companies in this industry and others must also sort through greater urbanization, the rising influence of emerging-market consumers, and many other complex, interdependent trends.
In the face of this disruption, many institutions are failing to keep up with the changes. Sometimes they very visibly fail to react to a changing world—as was the case with some financial institutions—and sometimes they just fade away. Look at Sears, which was easily the largest retailer in the United States for decades but which failed to react soon enough to the rise of Walmart, to the advent of online retailing, and to a host of other changes in the market and has been facing the prospect of a slow-motion collapse for almost a decade. The company recently announced that it and its sister company, Kmart, will shutter 78 more stores this summer.
Based on an intimate look at almost half of the world’s largest companies, Heidrick & Struggles identified a small group that they dubbed “superaccelerators.” Heidrick were surprised by two things. First, their exceptional success is not a case of choosing the right industry sector or geography. The superaccelerators are not all tech companies, and they come from all geographies and include sectors thought of as stable or low margin. Second, Heidrick found that many companies are trying to do the same, sensible things: put customers first, adopt clear management structures, and so on. What differentiated the superaccelerators from the also-rans was their ability to mobilize, execute, and transform with agility—being able to adapt and pivot faster than their competitors. That was what made the difference.
To see the potential for innovation in our ever more digital world, all you have to do is type “the Uber of” into your browser. You will be prompted to turn the phrase into “the Uber of everything,” “of insurance,” “of food,” “of private jets,” “of dog walking,” and on and on. “The Airbnb of” will lead to suggestions of “food,” “cars,” “office space,” “car rentals,” “stuff,” and more. Those possibilities don’t even touch on all the digital conveniences in a world where, as Apple puts it, “There’s an app for that.” But there’s a downside, too, as the pressures of rapid change leave a trail of broken institutions that are less capable of maintaining a superior level of performance in a changing environment. Finding the failures isn’t as simple as typing a few words into a browser, but it doesn’t take much looking to generate a long list. In 2010, cultural flaws at BP led to the largest marine oil spill in history, when the Deepwater Horizon drilling rig in the Gulf of Mexico exploded, killing 11 workers and injuring 16. The well gushed oil for 87 days, generating tens of billions of dollars in losses. Barclays Bank suffered its own disaster in 2012, when an overly aggressive sales culture led employees to attempt to manipulate Libor and Euribor (the average rates at which banks lend to each other).
The mix of opportunity, challenge, and abject failure has been driving a key question for Heidrick & Struggles research agenda: How can companies thrive in a fast-paced, digital world where profound long-term and short-term forces collide in unpredictable ways? A recent, major effort built on years of research into effectiveness at four levels of organizations provided some surprising insights, which is shared in this report.
To read the full report, click here.