1. Disruptive Trends Shaping the Business Landscape
Insights From Multiple Expert Discussions Around The World
21 August 2019

2. Context
This is a selection of insights on the future business landscape gained
from multiple expert discussions around the world. They are designed
to stimulate debate on what will have greatest impact and why.

3. FORESIGHT

4. Inspiration – Looking for new innovation opportunities

5. Prediction – An ideal ambition that is (nearly) impossible

6. Roadmaps – Making things simple - we hope

7. Alternate Paths – The unexpected routes to the future

8. Obscurity – Difficult to see further than the immediate short term

9. Foresight vs. Insight – Differentiating between the predictable and the uncertain

10. A VUCA World – Adopted from US Military and now business mainstream
Volatile
Uncertain
Complex
Ambiguous

11. The Common Aim - Connecting the inside-out and outside-in perspectives

12. MACRO DISRUPTIVE GLOBAL TRENDS

13. Everything Connected
Over 1 trillion sensors are connected to multiple networks: everything that can
benefit from a connection has one. We deliver 10,000x more data 100x more effectively
but are increasingly concerned about the security of the information that flows.

14. Imbalanced Population Growth
A growing population adds another billion people but it is also rapidly ageing:
a child born next year will live 6 months longer than one born today. While
migration helps to rebalance, increasing dependency ratios challenge many.

15. Key Resource Constraints
Economic, physical and political shortages of key resources increase and
drive increasing tension between and within countries. As we exceed the Earth’s
natural thresholds, food and water receive as much focus as oil and gas.

16. Shifting Power and Influence
The centre of gravity of economic power continues shifting eastwards, back to
where it was 2000 years ago. Recent superpowers seek to moderate the pace of
change but the realities of population and resource locations are immoveable.

17. Adaptation to Climate Change
As the impacts of 2oC and 3oC of global warming become more apparent,
organisations focus on adaptation as well as mitigation of climate change.
Operational resilience becomes the key focus for many companies.

18. Accelerating Displacement
Climate change, conflict, resource shortages, inequality and political elites unable or
unwilling to bring about necessary change all trigger unprecedented migration North.
Over the next 50 years, as many as 1 billion people could be on the move.

19. Rising Youth Unemployment
With unemployment rates over 50% in some nations, access to work is a rising
barrier. Especially across North Africa, the Middle East and southern Europe,
a lost generation of 100m young people fails to gain from global growth.

20. Truth and Illusion
The Internet has democratised knowledge and changed the nature of who we trust
and why. As confidence in large organisations declines the search for trustworthy
alternatives evolves. What we believe is changing how we behave.

21. THE FUTURE BUSINESS LANDSCAPE
Purpose of
the Company
Digital
Business
Future
Organisation
Future
Consumer

22. FUTURE CONSUMER

23. The Composite Consumer
Flexible digital identities allow consumers to connect with each other even
as they connect with brands. Loyal relationships will be made not just with
individual customers but also with families, couples, and groups of friends.

24. Continuous Proof of Loyalty
Brands have to consistently demonstrate their loyalty to consumers
as customer mobility and switching between brands increases.
Global, regional and local affiliations blur and drive wider consolidation.

25. Values over Value
As there is a move from affluence to influence, companies cease focusing primarily on
persuading customers to buy products. As people are defined more by what they do
than what they own, aligning business models to customers’ values is the priority.

26. Millennial Shopping
Millennials and Gen Z are the majority of shoppers and they want
different experiences. Although digitally informed and researched,
shopping in physical stores with friends is the still the preferred option.

27. Agelessness
A person’s physical age becomes less important as society adapts to the
new demographic landscape. New opportunities arise for creators and
consumers of all ages, though benefits are often only for the wealthy.

28. Human Touch
As service provision and consumption becomes ever more digital, automated
and algorithmic, those brands that can offer more emotional engagement
and human-to-human contact become increasingly attractive.

29. PURPOSE OF THE COMPANY

30. Companies with Purpose
As trust in business declines, structures and practices of corporations come
under more scrutiny. All companies are called on to improve performance on
environmental, social and governance issues and ESG reporting is compulsory.

31. A Problem of Focus
Corporations were originally established with clear public purpose –
but today many corporate purposes focus solely on profit. Instead of
being part of society, numerous organisations have grown apart from it.

32. Balanced Purpose
Leaders propose that companies adopt a social purpose that takes precedence
over, or is balanced with, its commercial purpose: Purpose should be intrinsic to
the core of the business and not just driven by shareholder interests.

33. Long-Term Perspective
The primary interest of the board is on its long-term success in
achieving the purpose for which the company was incorporated:
Innovation and exploring new opportunities is key to sustained growth.

34. Integrated Reporting
Integrated reporting is adopted by an increasing range of
companies who want to the ability to tell a story about the
bigger picture – previously overlooked in quarterly reports.

35. A Greater Purpose
Directors act within the planetary boundaries and social foundations:
The future purpose of corporations becomes to produce profitable
solutions to the problems of both people and the planet.

36. DIGITAL BUSINESS

37. Increasing Value of Data
As organisations try to retain as much information about their customers
as possible, data becomes a currency with a value and a price.
It therefore becomes openly traded within new marketplaces.

38. Outdated Perspectives
There is a fundamental difference between the economics of production
of physical vs. digital products (atoms vs. bits). Many companies seek alternatives
to the principles that were established during the first Industrial Revolution.

39. The Rise of Intangibles
In 1975 17% of the market value of the S&P500 was based on intangibles:
By 2015 this had flipped to 84%. Many leading companies increasingly
focus on innovating to build IP, brand value and other key assets.

40. Speed to Scale
Digital firms face few limits in their ability to scale – the bigger they are the bigger
they are likely to become. Greater connectivity shrinks the time to 1bn customers
and a $10bn valuation. Revenue / employee is up to 20 times traditional leaders.

41. Growth Opportunities
With faster change and the 4th Industrial Revolution building traction, many see
a major impact on jobs - creating new ones but rendering others redundant.
Several view capturing opportunities to be a significant driver of growth.

42. Reinventing Roles
Will the shifts ahead drive mass unemployment or can the evolutions that replaced
blacksmiths with car mechanics be repeated? Technology will have a fundamental
impact on roles that are currently part of our social fabric, many of which are reinvented.

43. Data as an Asset
A firm’s data is seen as an asset and as a liability. As it is increasingly traded,
Integrated Reporting will include data as a ‘capital’ alongside financial, social,
environmental and human capital. Annual reports reflect this.

44. Acting Beyond Regulators
As data flows freely across borders, effective national regulation around its use is difficult.
Led by the EU, more regional initiatives have greater impact; however, industry attempts
to limit this as self regulation is maintained for all but the most challenging issues.

45. FUTURE ORGANISATION

46. Organisation 3.0
New forms of flatter, project-based, collaborative, virtual, informal organisations
dominate - enabled by technology and a global mobile workforce.
As such the nature of work and the role of the organisation blurs.

47. Supply Webs
The shift from centralised production to decentralised manufacturing drives
many to take the ‘smaller and distributed’ approach: Global supply chains are replaced
by more regional, consumer-orientated supply webs and networks.

48. The Nimble Organisation?
Traditional firms are going out of business quicker: Over the last 30 years
the ‘average lifespan’ on the S&P500 has dropped from 35 years to 15.
Growth companies today make decisions through collective wisdom.

49. A Change in Structure
There is a shift from vertically integrated to horizontally specialised firms – from
product to platform and from sector to ecosystem: Firms move from being a
nexus of contracts with standardised rules to mechanisms of coordination.

50. Reskilling and Upskilling
As some sectors and countries gain from new technology, others will correspondingly
lose out and fall behind. A response to this will drive both the call for more
reskilling and upskilling as well as an inevitable surge in migration.

51. Sometimes Nomads
Elective migration, cheap travel, international knowledge sharing and
increasingly transient working models create connected nomads who mix
the traditions of home with the values and customs of their host location.

52. Smaller ‘Big’ Companies
The employment pool expands with ‘on and off-balance sheet talent’. In 2008 the world’s
ten most valuable companies employed 3.5m. Today, the top ten companies are worth
twice as much, but only have 50% of the employees. By 2028 they employ only 1m.

53. The Freelance Economy
The majority of us will be independent ‘free agents’ available for work as
projects require. In 2018 36% of the US workforce were freelancers – this
will rise to 50% by 2030. Up to 60% of freelancers are professionals.

54. Projects Not Jobs
The future organisation is increasingly flexible, permeable, flat and virtual.
Companies shift from being employers to become the bodies that create
or coordinate projects that an increasingly freelance population delivers.

55. Future of the Company
The whole notion of an organisation has to be updated:
The future of the company is as much in flux as the future of work itself.
Innovation to drive long-term growth in a digital world is critical.

56. QUESTIONS

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