When it comes to key dimensions of business, winning companies have something in common: executives with strategic foresight and the wherewithal to act on it.
What sets leaders at top companies apart?
January 24, 2024
New PwC research, visualised in the chart above, reveals that top-quintile companies in a performance index developed by PwC are more likely to have leaders with the foresight to recognise and act on opportunities and threats in three critical dimensions: business ecosystems, managed services partnerships and new technologies. Given the huge performance benefits those top companies enjoy, leaders everywhere should consider how best to develop that foresight—and the wherewithal to act on it. Start with four guiding principles.
- Look for weak signals and anomalies. Seemingly random or incoherent information can be a harbinger of significant change. To search for these so-called weak signals, start paying closer attention to edges and peripheries: emerging markets, fringe consumer groups, sectors where new entrants are pioneering business models. Also pay attention to unexpected events, behaviours or outcomes—for example, a change in financial performance that can’t be easily explained by normal business operations or market conditions. Some of these anomalies may signal the emergence of, say, a potentially disruptive revenue model.
- Use technology for insight. AI can help leaders analyse data, recognise patterns and perform predictive modelling. It can also collect and organise information from such diverse sources as industry news, patent filings, investments and innovations by traditional competitors and new entrants, research publications, clinical trials, and search trends. Non-technology executives looking to make the most of AI should first acquire a foundational understanding of AI concepts and terminology—and its potential applications in their industry.
- Countering bias. Humans are naturally inclined to cognitive biases—mental shortcuts and prejudices that influence their judgment and decisions—but leaders can turn to process-based remedies to help their companies ‘de-bias’ decision-making. For example, processes that lead to the formation of an ‘outside view’ are useful to countering the planning fallacy (in which planners inadequately adjust predictions despite previous projects regularly taking longer than anticipated). Similarly, a ‘pre-mortem’ process, to articulate how an effort might fail, is useful to counter unrealistic optimism, and presenting countervailing views through an ‘A team / B team’ approach is useful for countering confirmation bias.
- Embrace transformation. More than three-quarters of survey respondents at top-quintile companies say that transformation was already a priority three or more years ago, compared with about half of respondents at other companies, suggesting that leaders at winning companies acknowledge the need for reinvention earlier than their peers—and take action sooner.
Continue reading about how leaders at top companies are securing a performance advantage.
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