Three Trends That Will Change How You Manage

Globalization, digitization and politicization

20/01/2015 Barcelona

IESE Insight
Photo: CEOs need to create the ideal conditions for experimentation to occur on a large scale / Illustration: Rebeca Luciani

When asked about the leadership challenges they face, CEOs typically emphasize the heightened levels of uncertainty and ambiguity regarding the future state of the world and the need to adjust their strategies as conditions change. The real question is: What is driving this uncertainty?

Technology is certainly one disrupter but there are other forces, economic as well as geopolitical. The years since the global financial crisis have been marked by tit-for-tat currency and trade wars — most recently between Russia and the West — the rise of China and stop-start recoveries for Europe and North America. For CEOs, this makes choosing the right strategy for the right market a highly complex affair.

In their article Three Trends That Will Change How You Manage,” IESE professors Fabrizio Ferraro and Bruno Cassiman recommend using strategic arbitrage, business model experimentation and organizational orchestration to deal with the challenges posed by globalization, digitization and politicization — the three vital trends they believe most impact a company’s performance today.

Building on research in the field of strategic management by themselves and their colleagues in the Strategic Management Department at IESE, the authors call upon corporate leaders to transform their roles with regard to the following:

The CEO as Arbitrageur. CEOs need to change the way they allocate resources in order to beat competitors through arbitrage principles.

The CEO as Experimenter. CEOs need to create the ideal conditions for experimentation to occur on a large scale, develop a keen understanding of their competitive landscape, articulate possible futures, identify the critical (hidden) assumptions that would catalyze those futures, and react nimbly to test those assumptions.

The CEO as Orchestrator. CEOs need to organize multiple actors, activities, structures, processes and identities, pursuing competing logics simultaneously. This requires CEOs to orchestrate “hybrid organizations,” capable of bridging and melding the very different worlds of science, technology, medicine and art with the world of business.

For each of these areas, the authors offer plenty of real-life business examples and they pose a series of questions for corporate leaders to ask themselves to help shape their corporate identities and strategies.

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