THE CHALLENGE OF THE FUTURE
Events in the environment in which the company operates have a direct effect on the success or failure of that company. Strategic management seeks, as one of its aims, to relate the company to its environment, and to identify in advance the threats and opportunities which environmental change brings. At the outset the unique character of each business should be stressed: the effect of change in factors outside the control of the company will vary not only between industries but also between companies in the same industry.
What causes the effect to vary are not only the obvious things like the nature of business,countries of operation, and size of organisation: there are also the fundamental differences in the attitudes and abilities of various managements. What one manager views as a threat may be seized as an opportunity by another. Some accept the challenge of change as one of the factors which adds a stimulant to the task of management: others try to ignore it, or sit like defying the inevitable movements of the tides of the times. What is of equal importance is not just that the world has changed but that the rate of change has increased.
Change in all directions has occurred much more rapidly in the last twenty to thirty years than in the preceding forty to fifty. And the process continues to accelerate.Throughout history inability to cope has led to extinction. In business terms the company which makes no adjustments usually disappears with even fewer traces. Its only fossilised remains are its managers. The process of adaption began in the twentieth century when the company introduced motorised goods vehicles (‘Gloverley’). In the 1930s it moved its attention to the refuse-vehicle business, building the first all-steel moving-floor dust-carts. Their main product areas are now dust-carts and security vans.This company must owe much of its success over 250 years to its adaptability.
Part of the duty of all managements is to make those strategic moves which ensure that the business grows, prospers, and therefore survives. Although all change is not caused by external events, frequently it is what is going on in the world outside which is its most forceful agency. For the individual, change appears too frequently as a threat. A manager that sticks to the old tried and true course of action may be less often at loggerheads with colleagues, and may feel less at risk than if he or she ‘sticks his or her neckout’. An error of omission is frequently less noticeable than one of commission: sometimes the missed opportunity is known only to the manager himself: everybody knows if he or she takes it and fails.
Modern management calls for a measure of courage, the willingness to take reasonable (but not reckless) decisions which change the current state of affairs. The company whose managers look always inwards to the ‘safe’ path will never be a leader: in many instances it will already have sown the seeds of its own failure. The challenge of the future with its gauntlet of change is faced by every company, large or small. Only those which square up to the situation and pick up the gauntlet can hope to succeed. Those that ignore it, or try to run away, will sooner or later come to grief.
‘Creativity’ is an important word. It is defined as the ‘state or quality of being creative: ability to create’. Both ‘creative’ and ‘create’ have meanings which include words like ‘imagination’ and ‘originality’. Two meanings of ‘create’ are ‘to bring into being or form out of nothing; to bring into being by force of imagination’. It is important to remember that creativity comes from people, although it may be the resources of the business or society which enables the original, imaginative solution to a problem to become something that can be implemented. It is individual creativity, harnessed to achieve specific corporate objectives, which allows the company to innovate. Innovation is the function which enables a company to grow and profit from opportunities which arise from the changing world.
In addition, another function which has already been mentioned is required – adaptability. This is the ability to adjust to new circumstances, particularly to avoid threats arising from the changing environment. Creativity must assist this function also, although more important are probably qualities of corporate self-criticism, flexibility, and the courage to change. Change is an unavoidable factor in modern business life. The chief executive must retain a sense of balance. The external factors which affect performance and progress are, of course, legion. Not only are there many of them, but there are numerous interrelations:for example, technological change may bring about a different economic performance which in turn may change social attitudes.
The classification system chosen for this analysis is illustrated in the below figure.
