The Age of Continuous Reinvention

As existential threats converge, many companies are taking steps to reinvent themselves. What will it take to succeed?

For clarity on the nature of challenges and the opportunities associated with meaningful business reimagination, we can look at it from the perspective of three themes:

• • The Reinvention Imperative
  • Existential Changes
  • Reinvention Playbook

The Reinvention Imperative: 

The anxiety of CEOs about the long-term viability of their business model drives an enduring imperative to reinvent. The state of the economy with its pressures and threats contribute to the need for reinventing business models. Technological disruption, climate change and other accelerating global megatrends continue to compel CEOs to adapt steps to change how they create, deliver and capture value. The intensification of worries is due to the fact that global economy is expected to contract in the coming years than improve, due to multiple factors including geo-political tensions. As the pressure to adapt rises, more and more companies tend to prioritize big moves to support business model reinvention. Top companies not just focus on their business model, but also on the operating & technology models and apply them in combination. Another sign that the need to reinvent is rising is a notable increase in the factors that influence business model change. Changes associated with technology, customer preferences and climate change has a far larger impact on the way they create, deliver and capture value. Today “interconnect” is key. You need to consider what stakeholders need – not just customers, but also suppliers, business partners, visitors, regulators and society at large. When you run an organization or supervise its management, the task at hand is to envision the future ecosystem in which you intend to operate.  Beyond the understanding of which type of companies will perform what roles, you have to develop a clear view on how value pools are going to shift

Existential Change:

Two mega trends, Climate change and Technological Disruption, are poised to spur further reinvention. With Technologies such as AI (Artificial Intelligence) opening new opportunities and posing new challenges, reinvention is critical. Today If a person has an idea for an application and provides inputs to AI, the codes are automatically created and in just a few hours you can have the release of the app with the needed UI/UX.  Climate change is one of the key factors that forces companies to reinvent. Many companies have work in progress to innovate climate-friendly products and services. Upskilling and or reskilling the workforce is an important part of ensuring a transition to a net-zero economy. The accelerated decline of natural ecosystems makes nature loss an increasingly urgent challenge that’s interrelated with climate change. Organizations are looking at nature-positive business models that not just mitigate risk and strengthen financial results, but also benefit society. Technology disruption especially with AI, Gen AI, all of which has the hallmark of technologies that can significantly change how companies operate is approaching a critical juncture seemingly poised to transform business models, redefine work processes and overall entire industries. Gen AI is adopted for improving product quality and improving trust with stakeholders. Despite the enthusiasm. Gen AI is only one type of AI and has yet to achieve anything close to its potential. As the momentum of Gen AI surges, some experts are voicing concerns on the potential unintended consequences that could emerge as it grows. Cyber security risk for example. There could be an increase in the spread of misinformation about a company. The pace of innovation and the inevitable delay in establishing norms and regulations is cause for concern for managing this advancing technologies.. The key is to think of the risk dimensions of generative AI beginning with strategy, amd consider how they will affect virtually every employee of an organization. Set clear risk-based priorities to focus on biggest risks and create rigorous internal controls around data privacy and how AI models are trained. Monitor regulatory landscape constantly to stay abreast of developments in data privacy, AI Bias and how AI should be governed.

Reinvention Playbook:

In order to jump start continuous reinvention the essential actions that companies can take are:

1. 1. Turn barriers into opportunities
   2. Recalibrate expectations for climate priorities

Many constraints today are sector specific. Infrastructure challenge inhibits reinvention in energy, power, utilities, transportation and logistics. As you reinvent you need to flag the existence of reinvention obstacles. Decarbonizing the business model has been on Board room tables for the last several years currently and is a moderate to high constraint for many organizations to get clearance from the Board. The good news is that many perceived constraints on reinvention squarely falls in the realm of influence of the CEO of a company.  It is critical to build alignment between leaders and employees around priorities for change and build a culture of trust. The right move for each company will differ depending on their strategy, operating model, industry context and competitive landscape. The value of looking beyond the four walls of an organization and embracing the business ecosystem is immense. A flexible, agile and highly innovative company is on the winning path to the future. A collaborative ecosystem offers the best way to tackle complex far-reaching challenges such as climate change. Soon or later something fundamental in your business changes, Whether that is technology related, intense competition or regulatory driven. Companies are going to face inflection points that precipitate full scale changes in the way business is conducted. There is a growing need to put in place the early-warning and risk-sensing systems to help spot these hazards. 

All this calls for a growing premium on leadership effectiveness to maintain energy, challenge the status quo and increase momentum. That will be the mark of a reinvention – minded leader.  As we enter the age of continuous reinvention, you have unparalleled opportunities to reshape organizations and thrive on disruptions and transform aspirations into realities.