Business stares down big challenges in 2022 - 360
Christo Karuna and Michael Mintrom
Published on December 15, 2021
After two years of pandemic-related disruption, businesses will need to address ongoing challenges to operations and culture.
By Christo Karuna and Michael Mintrom, Monash University
For decades, experts have claimed that business leaders must navigate a world of increasing volatility, uncertainty, complexity and ambiguity if their enterprises are to survive. They termed this the V.U.C.A. world.
The pandemic brought everyone into the V.U.C.A. world, disrupting global supply chains and presenting new challenges to businesses. Supply chains were already vulnerable, but the pandemic provoked a crisis expected to continue well into 2022, leaving many in-demand goods more scarce and more expensive.
Businesses are starting to reconsider their use of lean systems and just-in-time inventory management. To meet customer demand, businesses are having to create robust supply mechanisms to find ways to reduce bottlenecks in industries such as car-making, pharmaceuticals, and semiconductors. This can be expensive, but is increasingly necessary.
Businesses now see the importance of safeguarding their supply chains. The current crisis will change the operating context for businesses for years to come, and effective use by businesses of data analytics will be even more critical for competitive advantage.
Being forced online has left customers impatient with slower, face-to-face services of the past, changing expectations everywhere, from restaurants to car dealerships to universities. Our phones have gradually become the new High Street, a trend which accelerated in the past two years.
Hybrid working is here to stay for millions of workers. Large employers like Salesforce in San Francisco have allowed their staff flexibility in working from wherever they like, despite investing in office space and design.
Shared workspaces have become an important by-product of disrupted work arrangements. Businesses have realised downsizing their office space and reducing days in office for their workforce creates a more sustainable, cost-friendly work environment.
A typical employer can save more than US$11,000 a year for every half-time telecommuter, the result of a combination of greater productivity and reduced real estate, turnover and absenteeism.
The ‘great resignation’ of 2021 has shown employee wellbeing is an important component of establishing a post-pandemic work environment. Seeing the need to create positive workplace cultures, businesses are fostering environments for employees to thrive. Businesses understand the merit in building employee resilience in the face of adversity.
To thrive in a post-pandemic V.U.C.A. world organisations will need to be more agile. A recent MIT Sloan study showed company employees spoke more negatively about their company’s lack of agility during the first six months of the pandemic than in the preceding year.
Delivering agility will require a shift from hierarchical and rigid organisations to flatter and more responsive ones, where communication happens often, facilitated effectively and quickly with advances in technology.
Freelance and remote workers, already used to working this way, have shown they can be delegated the authority to make quick decisions. An employee who can work flexibly in this environment becomes even more valuable to an employer, helping maintain key organisational relationships.
Organisational agility goes a long way towards building resilient business systems to deal quickly with disruptions caused by unforeseen events such as COVID-19, and enables organisations to sustain a competitive advantage.
Businesses have embraced ‘purpose and meaning’ as guiding operational principles. When ingrained into the mindset of an employee, these principles drive a high-quality workplace culture that maximises value while minimising costs.
Purpose drives meaning in the workplace which in turn increases employee engagement, according a 2016 PricewaterhouseCoopers study.
The same report found 79 percent of 502 US business leaders surveyed believed that purpose was key to business success and to an organisation’s existence. From the 1,510 employees surveyed, 83 percent valued meaning in their day-to-day work.
Purpose and meaning are even more important in the post-COVID-19 environment. Millennial and Gen Z employees — adults under 38 — are increasingly conscious of choosing to work for organisations that they believe care about societal welfare.
Managing risk in a V.U.C.A. world requires strong mechanisms for accountability and governance.
Sustaining high levels of success over many years is rare for businesses. The past two years have brought greater volatility, uncertainty, complexity and ambiguity for businesses everywhere.
Many business leaders might wish for a return to how things once were, but profound changes of the pandemic have revealed the need for new ways of doing business.
Successful leaders in 2022 and beyond will build workplace relationships that promote a sense of belonging, even as they are supported by increasingly flexible contracts.
Originally published under Creative Commons by 360info™.
Dr Christo Karuna is a Senior Lecturer in the Department of Accounting at Monash University. He is founding coordinator of the International Consortium for Values-based Governance (ICVG) based at Monash University.
Professor Michael Mintrom is the inaugural Director of Better Governance and Policy at Monash University. His books include Public Policy: Investing for a Better World (Oxford University Press).
The authors declared no conflict of interest in relation to this article.