Results from Our Survey on Strategic Readiness and Disruptive Change
Disruptive change is accelerating, driven by the rapid emergence of new technologies, the blurring of lines between industries, and competition from both traditional and nontraditional players. As a result, corporate lifespans are shrinking. On average, a company drops out of the S&P 500 list and is replaced once every few weeks. If current trends hold, about 75% of companies on today’s list will fade away or get acquired by 2030.
How does the shifting landscape affect enterprise strategy and corporate innovation efforts? To see how organizations assess their ability to anticipate and respond to disruptive change, we recently surveyed more than 800 executives across 20 industries. The results shed new light onto the challenges and opportunities that leaders face in crafting strategies to steer their companies in both the near and long term.
Top-level findings include:
- Fully 85% of respondents say their organizations need to transform in response to disruptive change – yet only 49% say that feel very confident or confident that their organizations are prepared for transformation in 3 to 5 years. That number drops to 42% in a time frame of 5 to 10 years.
- Large companies face an even greater “strategy confidence gap.” 83% of respondents from companies with over $1 billion in revenue agreed with the need to transform, and only 36% say they are confident to do so in a 5 to 10 year time frame.
The confidence gap suggests that organizations lack both the long-term orientation and the tools to plot long-term strategy.
The survey bore this out:
- Only 12% of organizations have a formal growth strategy with at least a 5+ year time horizon.
- The remaining 88% either have no formal growth strategy or it is shorter term.
This short-term bias has implications for the ability of companies to develop disruptive or transformational innovations—the kind that open new markets and attract new customers—and which typically require a longer-term perspective.