Just 10 days in and the financial news headlines for 2023 do not make easy reading. Rampant inflation, the end of ‘easy money’, energy shortages, workforce challenges and a war in Europe…the list goes on.
According to AlixPartners’ annual Disruption Index Report 'disruption’ itself is the new economic driver, and how you and your board respond will define you as either market ‘leaders or laggards’.
The standout takeaway is that ‘a bias for action sets growth leaders apart’. Bold decision making, optimism and a focus on driving standards are seeing high performing companies outpace their rivals.
Recessions are well known for spawning innovation. Half of Fortune 500 companies were launched in times of economic difficulty, and closer to home, 12 of the UK’s Unicorns launched in the aftermath of the 2008 global crisis. From increased M&A activity, to a reduced competitor landscape, to obsessive focus on creating ‘must-have’ value, to new go-to-market models (subscriptions anyone?), economic uncertainty presents opportunity.
So what does a growth mindset look like? The Disruption Index suggests that their growth cohort is characterised as follows:
77% are driving disruption not just responding to it
72% are concerned their executive lacks agility to meet the challenges
62% are worried that they are not adapting fast enough
57% are changing business models this year
57% are increasing their technology investments this year
Here at The Pragmatiko Partnership we’ve seen a shift in focus among our clients as they face the next chapter in this ‘Age of Disruption’. Savvy boards know that navigating short term calls, like cost reduction over backing long term investment, is challenging to get right at the best of times. In the teeth of a recession, it becomes business critical.
So how do you double-down on smart, scalable growth opportunities?
1. Prioritise high margin customers and prospects. Cash is king - especially in a recession.
2. Focus on your core competencies. Ensure you are bringing properly differentiated, ‘must-have’ value to your customers. Average will not cut it.
3. Be customer-obsessed. Listen hard, anticipate, respond and innovate to meet to their rapidly changing needs – and in real time.
4. Communicate. Make the most of quieter channels and cheaper media to cut through and stand out in your market.
5. Invest in your staff. Retaining talent and maintaining motivation are your two biggest assets when the market returns. Use lay-offs as a last resort.
What are you waiting for?
The full Alix Partners Disruption Index Report is available HERE.
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