UK businesses face a perfect storm in the months ahead. The Brexit transition and pending deal means UK businesses must find their footing in a new—and currently uncertain—era of international trade. And at the same time, the crisis caused by Covid-19 shows little sign of abating, leaving a trail of economic impacts and forcing changes to the way that we live and work forever.
So firms face an almighty challenge; they must fundamentally adapt and find new ways to remain competitive at a time of unparalleled disruption. But how?
Having written about the factors businesses need to consider as they adapt previously, I was interested to see Microsoft’s latest report Creating a blueprint for UK competitiveness. This comprehensive piece of research looks at what it takes to compete in a post-COVID, post-Brexit world.
They partnered with an independent team of economists and researchers, led by Dr Chris Brauer (Director of Innovation at my alma mater, Goldsmiths, University of London). Through extensive qualitative and quantitative research, they uncovered the need for a new model of competitiveness.
Among the report’s recommendations, they focus on the need to shape a new world of work. They outline two potential paths to growth, which resonated with me and the work I’ve been doing this year.
Path 1: ‘Hollow Growth’: cost reduction with missed opportunities
The first path, which the report calls Hollow Growth, is characterised by a focus on cost reduction. While a switch to distributed work presents the opportunity for huge real estate savings, if businesses focus on savings alone, they’ll miss this chance to radically reshape the business.
When it comes to future readiness, hollow growth organisations are notable for:
- rigid organisational structures (which, as I blogged about previously, are a barrier to strategic delivery in a remote-first world)
- minimal support for workers when it comes to adapting and re-skilling for the future
- basing forward plans heavily on the past, for example by sticking to traditional measures of productivity and ignoring less tangible outcomes like agility, resilience and culture
- failure to use technology to optimise individual functions and services
Path 2: Sustainable Growth (or ‘Sustainable Growth’: finding strategic advantages to bring real transformation, over cost reduction)
As a counterpoint to the earlier short-termist approach, the report outlines an alternative, sustainable path to growth. One which:
- focuses on organisational resilience
- nurtures and grows the culture of trust, empowerment and inclusivity—essential to scale distributed ways of working adopts leadership defined by both empathy and decisiveness
Sustainable Growth organisations prioritise real transformation over cost reduction alone. This part of the report chimed with me, reflecting many of the points I’ve made about leadership, strategy and skills for example.
The Sustainable Growth model the report outlines provides a useful model for organisations looking to turn flexible and distributed work into a driver of strategic advantage. With a focus on people and culture, employees are empowered to work flexibly and supported to learn new skills.
Similarly, the Sustainable Growth model takes a more mature and (small ‘a’) agile approach to digital, embedding it into the heart of the organisation. This means tools are transitioned to quickly and systemically, making the organisation fit to respond to new challenges and opportunities when they arise.
But given the uncertain-looking future, companies want and need those cost savings, as does the economy. Can the Sustainable Growth model deliver? The authors certainly think so.
The report paints a powerful picture of the benefits of taking this sustainable path. The Goldsmiths researchers calculate that if, supported by the government, every UK organisation adopted a more sustainable growth model and achieved a small, incremental increase in their competitiveness, it would deliver a boost to the national economy of £48.2 billion.
It’s clear UK businesses will be put to the test like never before in 2021. Competitiveness will be critical in the short term as businesses fight to stay afloat and remain relevant. But a laser focus on sustainable growth is essential for the long term too—yielding a long-term impact on organisational performance that’s positive for people, communities and our planet, as we grow our economy out of crisis.
Written in paid partnership with Microsoft UK.