Commentaries | Mar 30,2019
Aug 29 , 2020
By Asseged G. Medhin ( Asseged G.Medhin, deputy CEO of Global Insurance Company. )
All forms of business in the internet age are significantly challenged by the wave of change and could not resist its force. If they remain idle for a moment, they will be dealt a fatal blow, writes Asseged G.Medhin, deputy CEO of Global Insurance Company.
In the contemporary world, corporate agility will be an ever-critical element to how organisations survive in the world. It is an important factor that requires a board of directors, executives and managers to adopt fundamentally new ways of thinking.
They have to shift away from the old linear, industrial model toward a more collaborative and holistic view of the world and their role in it. There must be a significant shift in how decisions are made in corporations toward agility as opposed to a more traditional organising and governance style.
What do we need to consider to be prepared for the next wave of change? How should we organise to remain perpetually agile?
These are questions that need to be answered in the realm of change. Granted, they need to have been answered before. But there is urgency to the present, which requires foresight reinforced by hard work.
What will be the consequence of it now?
The answer can be summed up in two words - information age. At any time within the past three decades, we have stood in a moment of unprecedented change in the global corporate world. A failure to adapt to this, which affects how goods and services are produced, distributed and delivered, will mean that the agile business will run circles around the dinosaur organisations.
Today, many organisations find themselves recovering from massive layoffs and profit losses. Corporate human resources are being challenged to deliver like never before, and at the same time being forced to transform the way they operate to meet new challenges. It hardly seems the time to be discussing radical new models of corporate infrastructure.
The best answer to this “why now?” question is thus that business cycles have not gone away. But our experiences within those cycles has changed. As the economy recovers and then expands, forward-thinking leaders cannot afford to make strategic management decisions the same way they did during the last cycle.
What is changing is that there used to be wait times. The business cycle was more linear and predictably paced. In the Internet age, time and the manner of doing business are significantly changed to a cyclical direction, and the pace is situational. All forms of business in the internet age are significantly challenged by the wave of change and could not resist its force. If they remain idle for a moment, they will be dealt a fatal blow.
Traditional managers who suffer from myopia are the primary obstacle on the road to change. They lack the energy to adapt constantly and boldly throw away strategies and plans that are not working out properly.
Companies led by agile managers know how to staff up (and down), not only over the course of the annual budget but overnight. They know how to partner with others for technological support. They understand the need to offer a workspace for employees instead of just providing a desk with what may be needed at a given time. They embrace iterative solutions and strategic thinking.
Critically, they also understand that human capital is still a business's most precious strategic asset. It is one of the things that the Internet age has not changed. They work to improve the agility of their employees and to improve their creativity. They know that success comes through their human capital.
This is a crucial point to remember since labour demand will always outmatch supply, and with today’s highly educated and technologically-adept workforce, there will be a talent surplus. This gap will not be filled by rigid, archaic, traditional business setups of past decades. In fact, this may, to a certain extent, explain why younger age groups are more mobile than their predecessors.
Let us now put ourselves in the shoes of business leaders. If our firm fails to attract talent or become an employer of choice, it will be unable to compete for that surplus talent. The solution is to be agile now and create an attractive enough work environment that responds to the talent that is out there. Without this, the nation is doomed.
Leaders of companies should be vigilant and agile toward change and the process of business dynamics for this reason. Organisations that want to thrive in the future will have to plan for several kinds of cycles, not just the obvious general business cycle of the old guard. Leaders should be agile and need to learn how to operate effectively within this environment.
Studies show that it takes anywhere from 18 to 30 months for large-scale organisational change to go from planning to being implemented. This is to show that such changes do not happen on a whim but take time as well as energy.
When we refer back to changes in the business landscape in Ethiopia over the last three years, we can observe many developments, especially in the financial sector and public enterprises. The financial sector alone has exhibited a dramatic move from where it was 10 years before in terms of governance talent acquisition, technology, liberalisation framework and product development.
The names and brands of banks and insurance firms are now recognisable, and their numbers are increasing at a meaningful rate. Millions have been banked and are making use of mobile banking and interest-free banking, and insurance services are taking root. These are all positive developments that need to be built on to realise long-term sustainability.
Partly, this stems from the increased agility that is being shown by the current regulatory policy, which is more accepting of the notion of financial liberalisation. This, too, is something to celebrate.
PUBLISHED ON Aug 29,2020 [ VOL 21 , NO 1061]
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