MANAGEMENT

APAC Execs Worry Their Companies Are Not Prepared for Increasing Disruptive Pressure

CEOs and other C-suite executives throughout Asia Pacific expect their companies to face increasing disruptive pressure in the coming 18 months, according to a new study from Heidrick & Struggles.

The firm's survey of 558 senior executives from the APAC region found that fully 80% of respondents agreed that their companies are facing more disruption1 today than they did 18 months ago—and 83% expect this pressure to increase in the coming year and a half.

Yet fewer than half of respondents (44%) believe their company is well prepared to face the marketplace disruptions they anticipate.

"These findings suggests that many executives in the Asia Pacific region feel their companies may lack the organizational capabilities and talent to adapt and respond to disruption," said Steve Mullinjer, regional leader for Heidrick & Struggles in Asia Pacific and the Middle East. "Competitive advantage will be gained by those companies that bring together leadership, talent and an ability to accelerate performance even in uncertain times."

Among those APAC executives who do believe their companies are well prepared to respond to disruption, the top factors stated for their confidence are "the caliber of our people," followed by their companies' "superior understanding of customer needs," and an "ability to change strategic direction quickly."

When executives were asked which factors might most likely cause disruption for their company in the coming months, the most frequent source cited was "increasing customer expectations for service, convenience, or cost." Technology—in the form of "new, tech-enabled business models" and "the speed of technological change"—also figured as a prominent concern.

A multiyear research effort by Heidrick & Struggles into the factors that encourage and inhibit a company's ability to accelerate performance in a variety of operating environments identified four capabilities that matter most: the ability to Mobilize, Execute, and Transform with Agility. These factors provide a useful structure for understanding strengths and weaknesses in businesses throughout the region.

The ability to mobilize: A strength throughout APAC

Mobilizing an organization requires that leaders inspire aligned action based on a compelling ambition and purpose and a simple set of strategic priorities. For the most part, executives in APAC believe their companies do this well.

Nearly three-fourths of the executives (74%) said that their company's customers regard their products and services as consistently excellent, and two-thirds (66%) say that their top team makes bold decisions when needed.

Execution: Underlying talent concerns

Nearly two-thirds of the executives (65%) agreed that their company harnesses and streamlines resources to consistently deliver excellence in execution and continuous improvement.

Yet only half (51%) feel their organizational structure is easy to understand and navigate. Even more troubling: fewer than half (49%) said their company's people always deliver what they have committed to, and fewer still (42%) said that their organization attracts the best talent in their market.

These findings are striking given how regularly "the caliber of our people" was cited as a success factor among executives who feel their companies are poised to weather disruption.

Transformation: A significant strength

At its heart, business transformation implies a change in the way that people in a company think, and in the way that its resources are organized and allocated. Therefore, it was notable that 58% of the APAC executives agreed that their company experiments and innovates to create new growth engines and to reinvent existing businesses ahead of the market.

Similarly, more than two-thirds of respondents (68%) agreed that their company encourages innovation and disruptive thinking.

Nonetheless, insular thinking appears to be a challenge for some companies. Just over half say that their firm breaks down silos to work as one organization (54%), but another one-quarter disagree or strongly disagree.

Agility: Spotting opportunities and threats and recovering from setbacks quickly

Agility was the organizational capability in which APAC executives noted the most areas of concern. Fewer than half (46%) agreed with the statement, "We adapt and pivot at a faster pace than competitors to create competitive advantage."

Fewer still (43%) said that their company spends enough time preparing for the future.

On a more encouraging note, well over half of respondents said that their company quickly makes changes based on learning from past successes and failures (57%), that their ability to be flexible and responsive is one of their strengths (60%), and that they view difficult situations as positive opportunities to emerge stronger (68%).

 

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