Successfully Navigating the Fourth Industrial Revolution Requires Agility
Agile organizations treat disruption and adversity as opportunities. They grab the initiative and turn the environment into a critical supporter of their vision. In contrast, organizations that cling to the status quo and fail to take smart risks face extinction. The disparity between those that thrive and those that stumble grows when the pace of change accelerates. The average tenure of a firm on the S&P 500 index has shortened from thirty-three years in 1965 to twenty years in 1990. It’s expected to continue shrinking, with some analyses indicating that nearly half of today’s index may turn over in the next ten years.
Evolutionary fitness of organizations is determined by their ability to effectively respond to environmental changes. Extinctions generally follow a familiar pattern. Environmental signals—both positive and negative—are undetected or ignored. Leaders fail to recognize the new reality and accept it for what it is. No viable strategic vision for the new environment is developed. Instead, a myriad of tactical activities is deployed, without amounting to a coherent strategy. Existential risks remain hidden until it’s too late.