Brother - The butterfly effect on business

The butterfly effect on business

For business owners, the coronavirus pandemic kick-started a time of rapid change – and made them realise that the ripple effect of global events should be top of their priority list

Business resilience in numbers

£5 trillion

87%

47%

The amount wiped from the global economy in terms of growth by the coronavirus pandemic in 2020, according to IG

The number of business leaders who said that managing cybersecurity risk will be high priority in the next two years, according to Deloitte

The number of business leaders stating that environment, social, and governance (ESG) risk will be high priority, according to Deloitte

The number of JP Morgan’s 255,000 employees who will continue to work from home full-time

10%

The number of consumers who plan to be more cautious in their spending, according to EY’s Future Consumer Index

58%

How businesses can respond to a changing world

The coronavirus pandemic offered a powerful illustration of how rapidly the world can change – and how businesses have to readjust their priorities to keep up. In Deloitte’s most recent Global Risk Management survey, companies highlighted the importance of cybersecurity risk in the post-pandemic, work-from-home world, with 87pc saying that cybersecurity risk will be a high priority over the next two years.

Four ways to manage the ripple effect

Thinking carefully about everything from the political environment to emerging technologies can help companies stay ready, says Phil Jones. Here are four of his tried-and-tested tips.

Know the risks

Watch the horizon

Jones says: “At too many companies, the risk register doesn’t exist, or isn’t updated. If risk comes higher on the agenda, it’s easier to mitigate.”

“I’ve always found it very helpful to use what I call a scanning horizon, where I take a series of concentric circles and chop them into segments like technology, or consumer, or digital, looking for trends that might affect my business.”

Watch for ripple effects

Don’t buy tech for tech’s sake

“Don’t just wait, think about what the ripple effect of events might be. It’s a good way of starting to think a bit wider.”

“Think clearly about what you need to achieve. If you’ve got to reduce your operating cost model, a piece of technology or some cloud solution might be the way to help you get there.”

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Just 12pc of businesses said they were highly prepared for the coronavirus’s impact, according to a Gartner survey conducted in March 2020. And for the next few months, the changes will keep on coming, says Phil Jones MBE, managing director at business technology solutions provider, Brother UK. “We're going to see a radical amount of change in the next six to nine months,” Jones predicts. “People are going to change where they live, what they do, and how they want to live their lives.” To prepare for this brave new world, businesses need to spend more time thinking about the future, Jones believes. “For many of the businesses I meet, everyone's pretty busy dealing with what’s right in front of them. But businesses need to think widely – including what the ripple effects of other massive global events might be – everything from cybersecurity to climate change. Once you’ve got that wider thinking, you can better configure your direction of travel.”

The number of consumers who say that they will buy from companies who have a positive impact on society, according to EY’s Future Consumer Index

56%

Meet the Brother Business Responders

We’ve assembled a crack team of experts to help take your business to the next level in these challenging times. They come from disciplines as wide-ranging as well-being through to futurology, and you’ll see them offering advice throughout this campaign. They are: Phil Jones, managing director, Brother UK Emma Sinclair, entrepreneur and co-founder of Enterprise Alumni Chieu Cao, employee well-being expert and founder of Perkbox and Mintago Erica Orange, US futurist and founder of The Future Hunter Gwen Buck, policy adviser at The Green Alliance

‘There may be less reliance on very, very slick just-in-time supply chains’

Phil Jones, managing director, Brother UK

And more changes are coming, believes Phil Jones. “People have realised that work as they knew it can now be done almost anywhere: it’s the death of distance. That will create lots of implications for employers about where their offices are and what the role and function of an office is.” The pandemic also highlighted weaknesses in the supply chains which keep the world working, says Jones, with soaring shipping costs, and chip shortages closing car plants, for example. Jones says: “Clearly, the past 12 months exposed weaknesses in our global supply chain. As we pick up, we may find we tend to build slightly back into how we used to work, which means there may be less reliance on very, very slick just-in-time supply chains. There’ll be a little bit more buffer in the system.”

The pandemic means that businesses need to put future-proofing and business resilience at the very top of their agenda, says Professor David Denyer from the Cranfield School of Management. Professor Denyer explains: “A common theme exposed by Covid-19 has been just how interdependent our systems and society have become. Increased globalisation and more interactive and interrelated technology have created ideal conditions for the ‘butterfly effect’, where a small change in one part of the world cascades throughout the system, causing catastrophic problems. No one had a playbook for dealing with a global pandemic.” Businesses must embrace the changes forced on them and look outside their own four walls, says Chieu Cao, CEO and founder at Mintago. Cao says: “The global pandemic has forced many businesses to digitalise, with remote working becoming the norm. Discomfort is a catalyst for growth.” As part of this, businesses can no longer afford to ignore issues such as climate change. Ruth Murray-Webster, author of new book The Disruption Game Plan, says: “The pace of change is accelerating. There’s been lots of talk about sustainability and the ‘triple bottom line’ for years, but this time it feels like it’s for real – businesses that don’t focus on profit, people and the planet in equal measure will do less well than those that do in the future.”

‘No one had a playbook for dealing with a global pandemic’

When trying to future-proof, it pays to focus on your customer, says Phil Jones. “Always walk in the shoes of your customer and keep an eye on what their expectations are – what we call the ‘expectation economy’. “Let's just say that somebody can order groceries and have them delivered the next day within a time slot that’s convenient for them. But if you were a business saying, ‘Yes, you can order from me, but it will be with you in the next 48 hours. I can’t tell you when, you’ve got to sit in all day.’ That is no longer the expectation, post-pandemic.” Political changes, natural disasters and legislative changes can hit businesses very rapidly, Jones says, and it pays to be prepared.

So...how can your business manage the butterfly effect?

‘The trick is really just having a little bit more pre-mortem thinking time, rather than post mortem thinking’

Phil Jones, managing director, Brother UK

“You've got to think about all of these things, because the politicians can legislate something which could rock up on your doorstep quite quickly. Brexit is a great example of that. I’ve always found that a PESTEL analysis (political, environmental sociological, technological), is helpful – certainly every three months. The trick is really just having a little bit more pre-mortem thinking time, rather than post mortem thinking.” Keeping pace with change will require business leaders to think laterally, says futurist Erica Orange, executive vice president and chief operating officer at The Future Hunters. Orange says: “Diversification will be an important strategy to hedge against an uncertain future and the rapid pace of technological change. Differentiation is not only key for competition, but for survival. Any entity that thinks linearly will struggle for relevance, significance and survival. “Today, for instance, there is no longer ‘industry’. All of it is overlapping. How do we categorize Amazon? Is it in retail? Data analytics? Education? Entertainment? Every industry must become defined in new ways – as will every business within every industry.”

Technology can help businesses keep pace and adapt to a changing world, but it pays to identify the ‘pain point’ first, says Phil Jones. “For me, it’s always about saying, ‘What is the pain that we’re experiencing?’, then trying to resolve that pain, rather than saying: ‘technology is the answer, what is the question?’” says Jones. Future-proofing is vital, but companies should choose technology very carefully, agrees Emma Sinclair MBE, co-founder of Enterprise Alumni. “It is, of course, almost impossible to predict how a new project will grow and behave, or how a team or company will want to leverage new technology in the long run. “This creates a need for tech with large feature sets and fantastic user experiences, in addition to a high degree of flexibility, so companies don’t have to migrate from one tech platform to another in the future. Starting small and working in bitesize chunks absolutely makes sense – but buying cheap technology that solves a problem for today only is a waste of time and resources, in my opinion.” New, fit-for-purpose technology can also help businesses look after employees, says Chieu Cao. “Employee well-being technologies can not only help a business streamline communication, but also look after its staff.” And having a productive and sustainable workforce is vital for being ready for the business butterfly effect. Business leaders can’t afford to ‘go it alone’ when it comes to futureproofing, says Phil Jones. “You need to have a shared understanding of the future with other people within your business. Don’t keep it to yourself. Having that common understanding allows everybody to get behind the main effort.

How technology can help

What will the next big ripple event be?

“The way people want to own and/or have control over their own data is one of the changes most likely to impact businesses. The recognition that AI and machine learning are biased and that many automated processes are therefore flawed, means realising that from recruitment to credit, the algorithms building our future need to be inclusive, transparent and fair.”

Chieu Cao, CEO and founder at Mintago

Emma Sinclair MBE, co-founder of Enterprise Alumni

“A growing talent shortage is an immediate concern. We may not have enough AI-trained job-seekers to meet the economy’s need for them, and that shortage is holding the tech back on multiple fronts. The supply/demand disparity in AI algorithm experts is hurting both individual businesses and the economy and is forcing companies to move more slowly on AI implementation.”

Erica Orange, executive vice president and chief operating officer at The Future Hunters

“What Covid has demonstrated clearly is that we need to stretch our imaginations when we think about the future – and not just either/or scenarios, but multiple possible futures which take account of a broad range of uncertainties. Climate change will continue to bring disruptions that are deeply connected and deeply unpredictable – without imagination we risk grossly underestimating their impact.”

The world is changing. Brother is here to help your business adapt, act and thrive, and take on the challenges. Find out more at

As 2020 has taught us, the future is indeed unpredictable. However, the best way to model the future and stay ahead is to understand the key business drivers and dependencies. Here, our experts share the seismic changes they think all businesses need to prepare for.

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