How to Win the
Next Economic Downturn
31.6
Gain legitimacy from investors, customers, and the public, and earn “the right to operate,” by delivering total societal impact, the capacity
to create social as well as economic value.
Combine business
and social value
50
How to Cultivate
a Corporate Strategy to
Serve All Stakeholders
10
1
30
LEARNING
A LeAdership Agenda for the Next Decade
OF
LEARN HOW TO HARNESS autonomization AND EMERGENCE
ECOSYSTEMS
1980
Leverage AI and advanced analytics to create integrated learning loops in which machines use continuous feedback to act, learn, and adapt on their own—without the bottleneck of human intervention.
30
2016
1970
ECOSYSTEMS
Adopt technologies
for seamless learning
LEARN MORE ABOUT WINNING THE ’20s
Commit to “always-on” transformation
1990
2000
5
MARTIN REEVES
RESILIENCE
LEARN MORE ABOUT THE NEW
LOGIC OF COMPETITION
Adopt technologies
for seamless learning
Make diversity a business requirement
1
Embrace new ways of working
4.5
learn more
3.5
1990
RESILIENCE
1/3
5
3
DIGITAL–PHYSICAL
Global Economic Growth Is Trending Down
#HowtobyBCG
A LeAdership Agenda for the Next Decade
Growth is harder to achieve. GDP growth has declined by more than a third in the
past decade.
How to Win the
Next Economic Downturn
1970
1950
10
2010
4.0
1990
learning
LEARN HOW TO BUILD A “BIONIC” COMPANY
EXPLORE THE LINK BETWEEN DIVERSITY
AND INNOVATION
5.0
GDP growth (%)
2018
30
The Profitability Spread
LEARN MORE ABOUT TOTAL SOCIETAL IMPACT
How to Get
Agile Right
2014
2010
3.0
2010
EXPLORE THE NEW SCIENCE OF ORGANIZATIONAL CHANGE
How to Get
Agile Right
VITALITY
VITALITY
EXPLORE
-10
Bottom quartile
Encourage a range of voices and perspectives to better innovate,
take risks, solve problems creatively, bounce back from failures,
and turn challenges into opportunities.
Average Age at Which US Public Companies Were Delisted
Reorganize the work around a network of empowered teams
designed for agility and innovation.
1950
30%
2010
LEARN HOW TO IMPLEMENT AGILE AT SCALE
DIGITAL–PHYSICAL
2012
Adopt technologies
for seamless learning
2x
Embrace new ways of working
Build capabilities for ongoing large-scale change to keep up
with evolving technology and competition.
learn more
2.5
2010
The odds of failure are increasing. One out of three public companies will cease to exist in their current form over the next five years—
a rate six times higher than 40 years ago.
Integrate machines and humans
Make diversity a business requirement
3
New and Unfamiliar Competitive Imperatives
Upskill the workforce to focus people on higher–level cognitive skills that technology cannot provide; maximize synergies between machines and humans.
Here are six steps leaders can take to reinvent the enterprise as
a next-generation learning organization founded on continuous innovation and sustainable growth.
3
Chairman, BCG Henderson Institute
Winning the present is challenging enough, but
the more essential task of leadership is winning
the future.
10
1970
How to Cultivate
a Corporate Strategy to
Serve All Stakeholders
Average EBIT margin across industries (%)
5.5
-10
Explore more topics in the #HowtobyBCG series
Company lifespans are shrinking. Only 44% of today’s industry leaders have held their position for at least five years, down from 77% a half-century ago.
How to Harness
the Power of Purpose
6
2005
EXPLORE
2000
4
1
Integrate machines and humans
1980
2018
Integrate machines and humans
Companies can’t rely solely on exploiting existing business models. “Vitality”—the capacity to generate new ideas and continuously reinvent the business—will be an essential attribute.
LEARN MORE ABOUT WINNING THE ’20s
4
LEARNING
1995
3.0
4.0
The keys to competitive success in the new decade will be different from those of the past. Here are six steps to create a company equal to the challenges of the 2020s.
Commit to “always-on” transformation
2
Combine business and social value
Combine business
and social value
LEARN MORE ABOUT THE NEW
LOGIC OF COMPETITION
How to Thrive in the 2020s
0
New opportunities will come increasingly from digitizing the physical world, enabled by the rapid development and penetration of AI and the Internet of Things.
Embrace new ways of working
40
Commit to “always-on” transformation
6
LEARN MORE ABOUT TOTAL SOCIETAL IMPACT
40
How to Harness
the Power of Purpose
20
LEARN HOW TO HARNESS autonomization AND EMERGENCE
Make diversity a business requirement
1985
DIGITAL–PHYSICAL
How to Get
Agile Right
Business leaders will need to consider the broader context—economic, social, political, and ecological—in order to endure in the face of unanticipated shocks.
Accelerating technological change, social polarization,
political gridlock, geopolitical power shifts, and increased
public scrutiny of business all point to an era of protracted uncertainty and volatility.
ECOSYSTEMS
20
Companies need to increase their rate of organizational learning, focusing more on
discovery and adaptation than on forecasting
and planning.
Embrace new ways of working
2010
The new challenges
of management
EXPLORE THE NEW SCIENCE OF ORGANIZATIONAL CHANGE
Commit to “always-on” transformation
An Era of Uncertainty and Volatility
Integrate machines and humans
2014
The Profitability Spread
Make diversity a business requirement
EXPLORE THE LINK BETWEEN DIVERSITY AND INNOVATION
#HowtobyBCG
GDP growth (%)
1960
LEARN HOW TO IMPLEMENT AGILE AT SCALE
60
2020
Global Economic Growth Is Trending Down
Winning in the 2020s confronts managers with fundamentally new challenges. They must focus less on forecasting, planning, and direct decision making and more on nurturing the organizational capabilities necessary to evolve and grow sustainably over time.
-20
5.0
1975
0
MARTIN REEVES
Build a 21st-Century Enterprise
44%
The gap between winners
and losers is growing. The profitability spread between
top- and bottom-quartile companies has nearly doubled over the past 30 years.
LEARN HOW TO BUILD A “BIONIC” COMPANY
These trends are confronting companies with fundamentally new competitive imperatives that challenge traditional managerial capabilities.
Adopt technologies for seamless learning
Combine business
and social value
2
-20
Create the company
of the future
How to Cultivate a Corporate Strategy
to Serve All Stakeholder
How to Win the
Next Economic Downturn
Increasingly, competition won’t be between companies but among ecosystems—complex semifluid networks of companies that challenge traditional business assumptions.
2000
4.5
20
0
VITALITY
1960
1980
Talent is a scarce commodity. 30% of the skills that companies need are lacking or seen as not critical in today’s talent pool.
Average EBIT margin across industries (%)
Explore more topics in
the #HowtobyBCG series
Top quartile
How to Harness
the Power of Purpose
RESILIENCE
2020
2.5
2012
2016
3.5
5.5
2010