Covid-19 is not the most disruptive force, says AlixPartners

28 April 2021 Consultancy.uk 3 min. read

What is the most disruptive force in business today? Turns out, it’s not Covid-19 – according to a new AlixPartners survey. The rate of digitalisation – and other changes to business and society – appear to be furrowing more brows than the global pandemic. 

Management consultancy AlixPartners surveyed 3,000 business executives worldwide, for an idea of what keeps them awake at night. As it happens, the pandemic is an immediate challenge that most businesses have to manage, but the majority are confident in their ability to survive.

Instead, the rate of technological change, environmental concerns, constant threats from new business models, seismic regulatory shifts, data privacy issues and changing consumer behaviour have executives worried. These forces were certainly accelerated by the pandemic, but were unfolding at a global level long before 2020. 

Top disruptive forces for businesses today

According to AlixPartners CEO Simon Freakley, businesses now find themselves a touch overwhelmed by the scale of change. “The reality is that it’s not any one disruptive force confronting business. A multitude of interconnected and self-reinforcing factors are combining to challenge executives.” 

“This constant bombardment by disruptive forces leads to concerns over losing control. Business models and strategies which have proven themselves successful over the time are fast becoming obsolete.” 

Indeed, nearly two-thirds of surveyed businesses – spanning defence, financial services, automotive, telecom, media, retail and other industries – report being extremely impacted by at least two forces at the same time. The pandemic and all its repercussions have only served to strengthen these impacts, and cement their permanence. 

Businesses are grappling with multiple disruptive forces

Multiple problems prompt a multitude of solutions – and respondents to the survey have taken an average of three actions in response to disruptive forces. Front and centre is digital transformation, which has been put on a fast track since Covid-19. More than 50% of executives have upped their investment in advanced technology. 

“Amongst these technology investments, bringing data and analytics to the center of all activities has become an urgent task across all industries. For consumer-facing businesses, using these technologies to recalibrate in the face of rapidly shifting and unpredictable behaviors is essential,” explained Freakly. 

Other strategies include entering new markets, reviewing costs, finding new revenue streams, strategic hiring, focusing on values, strategic mergers and acquisitions, a shift to remote working, and collaborating with cross-industry-competitors – all demonstrating the range of disruptive factors at play.

Top strategies in response to disruption

All things considered, the researchers suggest that disruption is here to stay – and is in fact a driving force of modern-day economic growth. According to Freakley, the strategies listed above are undoubtedly effective means to keep pace with, but have their limits when it comes to managing the scale of disruption. 

Cultural change

What businesses need – in conjunction with tech investments – is a change of culture. The biggest barriers to transformation usually boil down to the personal and professional attributes of people – be it their lack of necessary skill or an inertia to behavioural change. 

“Attracting top talent has long been front of mind for business leaders. A highly disrupted business environment brings a new focus to this issue as meeting the challenge of disruption requires a change of not just skillset but also a change of mindset,” noted Freakley. 

“The most successful organisations in the face of continued disruption will be built upon best-in-class digital tools and techniques married to agility of thought, speed to action, and a relentless focus on execution,” he concluded.