20170526 report dynamic capabilities and organizational ...€¦ · § dynamic capabilities have...

©Prof.Dr.JanOliverSchwarz,2017

SurveyandBenchmarkonDynamicCapabilitiesandOrganizationalFuturePreparedness

1


§ Sampleconsistof91multinationalcorporations

§ Thefuturepreparednessactivitiesin16%ofthesurveyedcompaniescanbeperceivedasaDynamicCapability

§ Complexity ofthebusinessenvironmentisassociatedmainlywiththeconvergenceofenablingtechnologiesandtheemergenceofmanyandchangingregulations

§ Amajorfactoraddingtothedynamism inthebusinessenvironmentisseeninthepotentialformajordisruptionsinthenextfiveyears

§ Whilethemajorityscans theentirebusinessenvironment,includingallenvironmentalsegments,leaders arenotseenbythemajorityasthosesensingnewopportunitiesbeforetheyfullyemerge,norhavetheybeentrainedindoingso

§ Abroadrangeofmethods isappliedtoprepareorganizationsforthefuture.However,lessemphasisisbutonanalyzingfuturecompetitormovesandchallengingbasicassumptionsabouttheindustryandthecurrentbusinessmodel

§ Futurepreparednessactivitiesarenotusedonawiderscaletoventureintonewbusinessactivities

§ Identifyinglonger-termfuturetrendsisseenbyalargergroupascontributingtothedevelopmentofnewproductsandservices,leadershipisstrugglingwithmakingdecisionsunderuncertainty

§ Futuretrendsandscenariosdoshapestrategy.Lessdevelopedareleadershipskills inadaptingtoachangingbusinessenvironment

Executivesummary

2


I. Introduction

II. Results

III. DiscussionPoints

Tableofcontents

3


Objectives§ Dynamiccapabilitieshavebeendefinedinmanagementresearchasakeysourceofcompetitiveadvantage,in

particularinindustriescharacterizedbyvolatility,uncertainty,complexityandambiguity(VUCA-world)§ Whileweobserveanincreaseinactivitiessuchastrendmanagementorscenarioplanninginfirmsacross

industries,itremainsuncleariftheseactivitiesaddtothedynamiccapabilitiesofafirm

Aim§ Understandhowactivitieswhichsupportthefuturepreparednessofafirmaddtoitsdynamiccapabilities§ Investigateandbenchmarkanorganization'sfuturepreparednessanditsapproachtocompetingformarkets

ofthefuture

Scope§ Largemultinationalcorporations§ Strategydepartments

ThestudywascarriedoutincollaborationbetweenAarhusUniversity(Denmark)andAMDAcademyforFashionandDesign(Munich,Germany)in2016

Objectives,aimandscopeofthestudy

4


Descriptionofsample:91participants

5

Germany28%

OtherEurope19%

Netherlands9%

France7%

UnitedKingdom

7%

UnitedStates12%

Asia

9%

LatinAmerica

5%

Australia3%

Africa1%

CountriesAutomobiles&Components

6%

CapitalGoods11%

Commercial&ProfessionalServices

3%

ConsumerDurables&Apparel9%

FinancialServices11%

Food&StaplesRetailing

8%Materials

5%

Pharmaceuticals,Biotechnology&LifeSciences

12%

TechnologyHardware&Software10%

Telecommunication&Media

8%

Transportation10%

Utilities7%

Industries


I. Introduction

II. Resultsa) EnvironmentofyourOrganizationb) FuturePreparedness


Tableofcontents

6


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Industrystructure:Manycompetitorsfromunexpectedsources

Marketstructure:Fuzzyboundariesandcomplex

segmentation

Enablingtechnologies:Manyconverging(complex

systems)

Complexity of your environment

Stronglydisagree Disagree Neutral Agree Stronglyagree

Environmentofyourorganization

7

Comments

§ Theentryofnewcompetitorsisnotseenasaseverethreatacrossindustries,inparticularintheCapitalGoodsandUtilitiesindustries

§ Over40%agreethatmarketboundariesarefuzzy,inparticularintheTechnology,Hardware&SoftwareandMaterialsindustry

§ Majorityagreesthatenablingtechnologiesaremanyandthattheyareconverging,especiallyintheTechnology,Hardware&SoftwareandFinancialServicesIndustry


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Regulations(federal,state,etc.):Manyorchangingrapidly

Dependenceongovernmentfundingandpoliticalaccess- High:sensitivetopolitics

andthefundingclimate

Complexity of your environment

Stronglydisagree Disagree Medium Agree Stronglyagree


8

Comments

§ 50%ofparticipantsagreeonthemayorroleofregulationandtheconstantchanges,addingtocomplexityinthebusinessenvironment,foremostintheFinancialServicesindustry

§ Governmentfundingandpoliticalaccessarenotcriticaltomorethan50%,inparticularintheConsumerDurablesandApparelindustry


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Accuracyofpastforecasts- Low:resultsdiffergreatlyfromforecasts

Marketgrowth:Rapidandunstable

Dynamism of your environment



9

Comments

§ Nearly60%reportthatpastforecastwereaccurate,inparticularintheFood&StaplesRetailingandMaterialsindustry;onlyroughlyover20%reportlowaccuracyofforecast(e.g.ConsumerDurables&Apparelindustry)

§ Over60%disagreethatmarketgrowthisrapidandunstable,foremostintheConsumerDurables&Apparelindustry,notaddingtothedynamicsofthebusinessenvironment


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Growthopportunities:Haveincreaseddramaticallyinthepastthreeyears

Potentialformajordisruptionsinthenextfiveyears- High:severalsignificantbusinessshocksareexpected,without

knowingwhichinparticular

Dynamism of your environment



10

Comments

§ Noclearpictureifgrowthopportunitieshaveincreaseddramaticallyinthepastthreeyears;thisseemstobeinthecaseinthePharmaceuticals,Biotechnology&LifeSciencesandTelecommunication&Mediaindustries

§ Over50%expectmajordisruptionswithinthenextfiveyears,foremostintheCommercial&ProfessionalServicesandTelecommunication&Mediaindustries,lesssointheFood&StaplesRetailingandMaterialsindustry


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Industryriskiness:Veryrisky;afalsestepcanmean

myfirm’sundoing

Industrymunificence:Verystressful,exacting,hostile;veryhardtokeepafloat

Environmentdominance:Adominantenvironmentinwhichmyfirm’sinitiative

countsforverylittleagainstthetremendous

competitive,political,ortechnologicalforces

Hostility of your environment



11

Comments

§ 50%perceivetheirbusinessenvironmentnotasrisky,differenttakeintheCommercial&ProfessionalServices,Food&StaplesRetailingandFinancialServicesindustry

§ Over60%disagreethattheirindustryisveryhostile,exceptiontheCommercial&ProfessionalServicesindustry

§ 50%donotperceivetheirenvironmentasadominantoneinwhichowninitiativesarenotverypowerful,TechnologyHardware&Softwareindustrytakeaslightlydifferentperspective


I. Introduction

II. Resultsa) EnvironmentofyourOrganizationb) FuturePreparedness


Tableofcontent

12


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Reach:Wesystematicallyscanourentire

environmentincludingourcurrentbusiness,adjacentbusinessandfarawayfields

Scope:Wesystematicallyscanallenvironmentalsegments(technology,political,competitor,

customerandsocio-culturalenvironment)

Sources:Besidesnewsmediaetc.,wealsoscanculturalproducts(e.g.,

novels,movies)fortrends

Perceiving(Sensing)


Futurepreparedness

13

Comments

§ Over60%statethattheyaresystematicallyscanningtheirbusinessenvironmentwhilereflectingabroadscope,interestinglylessintheConsumerDurables&Apparelindustry

§ Maybenotsurprising,70%statethattheyarenotincludingculturalproductsintheirscanningactivities,buttoanextent,theCommercialandProfessionalServicesindustryisanexception


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Timehorizon:Wesystematicallyscanall,theshortandmediumtolong-term

(mediumbeyond4years)

Sensors:Oursensorsensurethatwedetect80%ofalltrendsthatwillshapeourindustryinthenext5- 10years

Perceiving(Sensing)


Futurepreparedness

14

Comments

§ Over50%statethatshort-,medium- andlong-termtimehorizonsareconsideredinscanningtheenvironment;thisdoesnotapplytotheConsumerDurables&ApparelandFood&StaplesRetailingindustries

§ Alsoover50%stateconfidenceintheirabilitytodetect80%orrelevanttrendsshapingtheirindustry,inparticularintheMaterialsandTelecommunication&Mediaindustries


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Leaders:Ourleadersareabletosensebusinessopportunitiesbeforetheyfullymaterializeandtochallengethestatus-

quointheindustryandinourfirm

Trainingleaders:Managershavebeentrainedinhowtosensenewbusinessopportunitiesandhowtochallengeestablishedbusinessmodelsinthe

industryandinourfirm

Perceiving(Sensing)


Futurepreparedness

15

Comments

§ Whilealittleover30%statethatleadersaretheonesensingnewbusinessopportunitiesearly,over40%statethatleadershavenotbeentrainedindoingso

§ Bothleadershipquestionshavehighdegreeofmediumorneutralanswerswhichallowtheassumptionthattheroleofleadersinsensingnewbusinessopportunitiesisnotentirelyclear

§ Nospecificindustryresultscanbereported


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Methods:Wesystematicallyutilizearangeofformalmethods(suchas

scenarioanalysisandroadmapping)tocreatealternativefutureoutlooks

Competitors:Weapplymethodssuchasbusinesswargamingtounderstandhow

competitionmightchange

Prospecting


Futurepreparedness

16

Comments

§ Over50%statethatawiderrangeofmethodsisusedtogeneratefutureoutlooks,thisappearstobethecaseinparticularintheCapitalGoodsandMaterialsindustry

§ Less,around40%,statethatbusinesswargamingisappliedtoanticipateandunderstandthecompetitivedynamics,inparticularintheTechnologyHardware&Softwareindustry,considerablylessintheConsumerDurables&Apparel


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Systemsthinking:Wecontinuouslyanalysethekeyfactorsthatinfluenceour

currentandtargetmarkets,andusemethodsthatpermittouncover

systemiceffects(suchascross-impactanalysisorsystems-dynamicsanalysis)

Numberofalternatives:Multiple.Weoftenconsidermultiplefuturesandhavesystematicwaysfordefiningstrategiesinenvironmentswithdifferentlevelsof

uncertainty

Prospecting


Futurepreparedness

17

Comments

§ Lessemphasis(30%)isputonembracingsystemsthinkingorapplyingtoolssuchascross-impactanalysis;thisappearslesstobethecaseintheMaterialsindustry

§ While40%state,thatmultiplealternatives/futuresareconsidered,assuggestedinScenarioPlanning,also30%statethatthisisnotthecase,focusingononealternative

§ MultiplealternativeareinparticularlessinvestigatedintheAutomobile&Componentsindustry


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Readinesstolistentoscoutsandexternalsources:Theorganizationisopen

(Bringingexternalinformationintothecompanyandmaintaininganexternal

networkisencouraged)

Willingnesstotestandchallengebasicassumptions

Prospecting


Futurepreparedness

18

Comments

§ Morethan50%statethatthereiswillingnesstolistentoexternalscouts,lessinConsumerDurables&Apparelindustry,butinparticularsointheTelecommunication&MediaandMaterialsindustry

§ However,thewillingnesstochallengeandtestbasicassumptionsisoverallalittlelower,againinparticularlessintheConsumerDurables&Apparelindustry


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Ourexplorationsactivities:Bothcontinuousandissue- drivenscanning

thatcanbetriggeredbottom-upandtop-down

Explorationcapability:Wehaveinthepastrepeatedlyexplorednewmarketsthatweredistanttoourcurrentbusinessandtypicallyfeelthatwehavehadan

informationadvantageoverourcompetitors

Probing


Futurepreparedness

19

Comments

§ Nearlyequallydivided:explorationactivitiesaretriggeredtop-downandissue-drivenorbothbottom-upandtop-downdrivenbycontinuousissue-scanning

§ Only30%statethatinthepastnewmarketwereexploredandthatacompetitiveadvantageinregardtoinformationexisted,e.g.Utilitiesindustry,quitetheoppositeperceptionintheFinancialservicesindustry


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Dedicatedunit:Wehaveadedicatedunitthathasthemandatetoexploreand

developnewmarketsthatcanbecomeasignificantcontributortoouroverall

revenues

Scopeofprobing- high:ouractivitiesforexploringnewmarketsoftentaketheformofventureinvestments,alliances,acquisitions,mergers,andsubstantialinvestmentsinassetssuchasfactories

Probing


Futurepreparedness

20

Comments

§ Themajoritystates(roughly50%)thatadedicatedunitintheirorganizationisexploringanddevelopingnewmarkets,thisappearstobeinparticularthecaseintheCapitalGoodsindustry,theoppositeintheConsumerDurables&Apparelindustry

§ Only30%describetheirapproachtoprobing(ventureinvestments,etc.)ashigh,e.g.theMaterialsindustrywhiletheConsumerDurables&Apparelindustryonaveragedoesn’tfollowsuchanapproach


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Impact:Byidentifyinglonger-termfuturetrendsorissuesearly,westartbuildingnewknowledgeinourfirmthathelpsustodevelopnewproductsorservices

Newproductsandservices:Longer-termfuturetrendsorscenariosoftenarethestartingpointforthedevelopmentofnewproductsandservicesatourfirm

Learning


Futurepreparedness

21

Comments

§ Over40%agreethattheidentificationoftrendsleadstonewknowledgethatinrerunsupportsthedevelopmentofnewproductsandservices,foremostintheCapitalGoodsandMaterialsindustries

§ Further,40%statethattrendsandscenariosarethebasisfornewproductsandservices


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Decisionmaking:Facedwithuncertaintiesinourindustry,ourleadersoftendonothesitatetotakestrategic

decisions

Trainingleaders:Ourleadershavebeentrainedinmakingdecisionsunder

uncertaintyandperceiveuncertaintyinourindustryalsoasasourceof

opportunities

Learning


Futurepreparedness

22

Comments

§ Theleadership-questionsinthissectionrevealthatroughly50%ofleadersstrugglewithtakingstrategicdecisionswhenconfrontedwithuncertaintyintheirindustryandthatroughly50%oftheleadershiphavenotbeentrainedindecisionmakingunderuncertainty

§ Acrossindustriesthisappearstobealessdevelopedissue


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strategy:Inshapingthestrategyofourfirmfuturetrendsand/orscenariosplaya

vitalrole

Shifting:Identifiedtrendsand/ordevelopedscenariosregularlysupportinshiftingresourcesofourfirmintonew

strategies

Transforming


Futurepreparedness

23

Comments

§ Over50%agree(roughly20%stronglyagree)thattrendsandscenariosplayavitalroleinshapingthestrategyofafirm

§ Asmallernumber,40%,statethattrendsandscenariossupporttheshiftingorreallocationofresourcesintonewstrategy,foremostintheMaterialsindustry,lessinConsumerDurables&Apparelindustry


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Leadersatourfirmareabletoadapttochangesintheenvironmentandto

reconfigureresources

Trainingleaders:Leadershavebeentrainedinadaptingtochangesinthe

environmentandreconfiguringresourcesaccordingly

Transforming


Futurepreparedness

24

Comments

§ Whileitisstatedthatleadersareabletoadapttochangeandtoreconfigureresources(40%),only30%statethatleadershavebeentrainedtodoso

§ TheabilityofleaderstoadaptandtoreconfigureresourcesappearstobehigherintheFood&StaplesRetailingindustry,whilelowerintheConsumerDurables&Apparelindustry

§ Trainingleadersinthiscontextappearstobealowerpriority


I. Introduction

II. Results


Tableofcontent

25


HowmanycompaniesinoursampleexecutefuturepreparednessactivitieswhichcanbeperceivedasaDynamicCapability?

26

DynamicCapability

16%

84%

Assessmentoffuturepreparedness activities

Thedynamiccapabilitylens explainswhysomefirmsare“adeptatanticipatingandexploitingopportunitiesenabledbyadvancesintechnologyandrapidchangesintheirmarketspace,whileothersstruggleorgooutofbusiness.”1 Dynamiccapabilitiesare“thefirm’sabilitytointegrate,build,andreconfigureinternalandexternalcompetencestoaddressrapidlychangingenvironments.”2

1Day,G.S.&Schoemaker,P.J.H.2006.Peripheralvision:detectingtheweaksignalsthatwillmakeorbreakyourcompany.Boston:HarvardBusinessSchoolPress;2Teece,D.J.2007.Explicatingdynamiccapabilities:thenatureandmicrofoundationsof(sustainable)enterpriseperformance. StrategicManagementJournal,28(13):1319-1350.

Comments

§ Thefuturepreparednessactivitiesin16%ofthesurveyedcompaniescanbeperceivedasaDynamicCapability

§ Noclearindustrytrendcanbeassessed


Prof.Dr.JanOliverSchwarzMunich,GermanyMobile:+49(0)1702112139Email:[email protected]

Contact

27

20170526 report dynamic capabilities and organizational ...€¦ · § dynamic capabilities have...

Documents