How to Thrive in the 2020s
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.
#HowtobyBCG
An Era of Uncertainty and Volatility
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.
44%
1
3
OF
2x
1/3
30%
Winning the present is challenging enough, but
the more essential task of leadership is winning
the future.
MARTIN REEVES
Chairman, BCG Henderson Institute
Build a 21st-Century Enterprise
Here are six steps leaders can take to reinvent the enterprise as
a next-generation learning organization founded on continuous innovation and sustainable growth.
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.
LEARN MORE ABOUT WINNING THE ’20s
EXPLORE
Create the company
of the future
learn more
The new challenges
of management
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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.
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.
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.
Growth is harder to achieve. GDP growth has declined by more than a third in the
past decade.
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 Age at Which US Public Companies Were Delisted
60
50
40
30
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
31.6
The Profitability Spread
40
30
20
10
0
-10
-20
1950
1960
1970
1980
1990
2000
2010
2020
Average EBIT margin across industries (%)
Top quartile
Bottom quartile
Global Economic Growth Is Trending Down
GDP growth (%)
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2010
2012
2014
2016
2018
EXPLORE
learn more
LEARN MORE ABOUT WINNING THE ’20s
1
2
3
4
5
6
Adopt technologies
for seamless learning
Integrate machines and humans
Embrace new ways of working
Commit to “always-on” transformation
Make diversity a business requirement
Combine business
and social value
1
Adopt technologies
for seamless learning
Integrate machines and humans
2
Embrace new ways of working
3
Commit to “always-on” transformation
4
Make diversity a business requirement
5
Combine business
and social value
6
Adopt technologies for seamless learning
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.
LEARN HOW TO HARNESS autonomization AND EMERGENCE
Integrate machines and humans
Upskill the workforce to focus people on higher–level cognitive skills that technology cannot provide; maximize synergies between machines and humans.
LEARN HOW TO BUILD A “BIONIC” COMPANY
Embrace new ways of working
Reorganize the work around a network of empowered teams
designed for agility and innovation.
LEARN HOW TO IMPLEMENT AGILE AT SCALE
Commit to “always-on” transformation
Build capabilities for ongoing large-scale change to keep up
with evolving technology and competition.
EXPLORE THE NEW SCIENCE OF ORGANIZATIONAL CHANGE
Make diversity a business requirement
Encourage a range of voices and perspectives to better innovate,
take risks, solve problems creatively, bounce back from failures,
and turn challenges into opportunities.
EXPLORE THE LINK BETWEEN DIVERSITY AND INNOVATION
Combine business and social value
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.
LEARN MORE ABOUT TOTAL SOCIETAL IMPACT
MARTIN REEVES
How to Harness
the Power of Purpose
Adopt technologies
for seamless learning
Integrate machines and humans
Embrace new ways of working
Commit to “always-on” transformation
Make diversity a business requirement
Combine business
and social value
New and Unfamiliar Competitive Imperatives
These trends are confronting companies with fundamentally new competitive imperatives that challenge traditional managerial capabilities.
LEARN MORE ABOUT THE NEW
LOGIC OF COMPETITION
LEARN MORE ABOUT THE NEW
LOGIC OF COMPETITION
Companies need to increase their rate of organizational learning, focusing more on
discovery and adaptation than on forecasting
and planning.
learning
Increasingly, competition won’t be between companies but among ecosystems—complex semifluid networks of companies that challenge traditional business assumptions.
ECOSYSTEMS
New opportunities will come increasingly from digitizing the physical world, enabled by the rapid development and penetration of AI and the Internet of Things.
DIGITAL–PHYSICAL
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.
VITALITY
Business leaders will need to consider the broader context—economic, social, political, and ecological—in order to endure in the face of unanticipated shocks.
RESILIENCE
LEARNING
ECOSYSTEMS
DIGITAL–PHYSICAL
VITALITY
RESILIENCE
LEARNING
ECOSYSTEMS
DIGITAL–PHYSICAL
VITALITY
RESILIENCE
A LeAdership Agenda for the Next Decade
How to Get
Agile Right
How to Win the
Next Economic Downturn
How to Get
Agile Right
How to Win the
Next Economic Downturn
How to Harness
the Power of Purpose
How to Cultivate
a Corporate Strategy to
Serve All Stakeholders
How to Cultivate
a Corporate Strategy to
Serve All Stakeholders
LEARN HOW TO HARNESS autonomization AND EMERGENCE
LEARN HOW TO BUILD A “BIONIC” COMPANY
LEARN HOW TO IMPLEMENT AGILE AT SCALE
EXPLORE THE NEW SCIENCE OF ORGANIZATIONAL CHANGE
EXPLORE THE LINK BETWEEN DIVERSITY
AND INNOVATION
LEARN MORE ABOUT TOTAL SOCIETAL IMPACT
A LeAdership Agenda for the Next Decade
#HowtobyBCG
Explore more topics in
the #HowtobyBCG series
How to Get
Agile Right
How to Win the
Next Economic Downturn
How to Harness
the Power of Purpose
How to Cultivate a Corporate Strategy
to Serve All Stakeholder
The Profitability Spread
10
0
-10
-20
1950
1960
1970
1980
1990
2000
2010
2020
2010
20
30
5.5
Average EBIT margin across industries (%)
Global Economic Growth Is Trending Down
4.0
4.5
5.0
3.5
3.0
2.5
2010
2012
2014
2016
2018
2010
GDP growth (%)