Dr. Conchita L. Manabat l August 23, 2023 l Business Mirror
“IT is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.” -Charles Darwin
THE recent past has been a turbulent period. The unprecedented pandemic, the Russian adventurism in Ukraine, the Fitch downgrading of US government debt, the continuing Philippine incidents with China on claims over the Philippine sovereignty in the West Philippine Sea, climate change, and more have kept all aware that things are never the same. Amidst these developments, one thing is crystal clear–Change.
Change. Re-invention. Innovation. Transformation. Call it what you will, the phenomenon of change is inevitable, eternal, inescapable, and imperative. As one futurist said, change is “not merely necessary to life, Change is life itself”.
The world of business—A changing panorama
THE world of commerce and business has experienced change, perhaps more so than any other spectrum of life. Advancements in science and technology, intense global competition, access to unprecedented levels of information, and the impact of the pandemic have irredeemably transformed the way business is conducted.
What has changed?
Too much has changed. And being engulfed in these changes, it is often hard to see the ‘big picture’ of change clearly. Allow me to venture on some core changes that businesses have grappled with:
Ubiquitous technology – The omnipresence of technology is the most visible change in business. Advances in information technology, telecommunications, web-based tools, connectivity, convergence, and artificial intelligence have transformed the marketplace. A business that has not adapted to technological changes cannot exist for long.
Economic power
TRADITIONALLY, productivity and profitability were assumed to move together. When a company increased its productivity, increased capacity, it earned more profits. However, the fierce competition for global economic leadership has changed the way business, trade and everything are done. Those who have strong hold on critical goods have evolved to some sort of “cartel” where the supply is “managed” and so, the prices and profits. Alignment of nations/economies for “common goals” has been the order of the day.
Globalization
FREE trade, the interdependence of the world economies and presence of businesses with global reach have not only intensified competition but also enhanced risk. What happens in one part of the world, now significantly impacts the other. Global and local knowledge have become increasingly relevant, for a business to survive.
The “commoditization” of everything—The commoditization of products, and technologies is history. In our midst is increasingly a marketplace where services, skill sets, human resources, knowledge, and even, innovation are getting commoditized. Differentiation and climbing the value chain require incessant reinvention.
Change thyself–Adjusting the sails
THE business world has changed and it will continue to change at a faster pace. In this environment, the survival and growth of corporations will be driven by their capacity to change and constantly and consistently adapt to the environment.
“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination”, a country song says. So it must be, for businesses to survive in the world.
“Adjusting the sails” or constant adaptation to the external environment is not easy for any entity. Companies must constantly clarify their core purpose, vision and destination in the changing landscape. Based on the changing environment, companies must re-assess the structure, strategies, processes and collective behavior. Most importantly, companies need to propagate a corporate culture that embraces change and encourages innovation. And finally, large-scale change programs are successful only when they are led from the ‘top’, by committed change agent leaders, and are implemented with purpose and passion.
In the dynamic marketplace, what leaders can most give to organizations is the capability of reinvention, the corporate culture of change. A change driven leader empowers his/her company to navigate the seas, adjust its sails and reach its destination. It is then that one can truly create the desired change.
*** Conchita L. Manabat is the President of the Development Center for Finance. A past President of FINEX and past Chair of the International Association of Financial Executives Institutes, she serves as the Chair of the IAFEI Advisory Council. She is a member of the Consultative Advisory Groups (CAGs) of the International Auditing & Assurance Standards Board and the International Ethics Standards Board for Accountants.