Letter from our CEO
What a year. If we ever needed evidence that disruption is the primary challenge facing business and the global economy today, the past year has provided it. Although few could have predicted the acute dislocations that COVID-19 would cause, the ensuing crisis has demonstrated how a single disruptive event can have a reverberating and amplifying effect across geographies, industries, and societies.
Disruption, of course, isn't new, but the pace at which it's forcing change is accelerating. The magnitude of its impact is growing, and the sheer complexity and cumulative impact of the interconnected forces confronting business leaders have never been greater.
The ebb and flow of the credit cycle once drove the fortunes of the economy and of industry, but policymakers and business leaders have become more adept at managing these cycles in recent years. Disruption, which displaces existing businesses, markets, and value networks in favor of newer models and relationships, has emerged as the new economic driver and the primary strategic challenge.
For 40 years, AlixPartners has been helping our clients navigate disruption. During this time, we've seen technological innovations enable new business models and ways of working at unprecedented speed. Consumers are empowered to demand what they want, when and how they want it, constructing and inhabiting self-curated digital ecosystems. In a hyperconnected world, more than a billion people, primarily in Asia, have emerged from poverty, shifting the dynamic center of the global economy eastward. Populations are aging. Inequality is rising. The climate is changing, and the list goes on.
Because of its impact on so many of our clients, we have embarked on a multiyear study of disruption, looking at the forces at work and how they are redefining business. This year, we add an additional layer, with the inaugural AlixPartners Disruption Index. From November 2020 to January 2021, we surveyed more than 3,000 executives around the globe in different industries to gauge their perspectives on disruption and the strategies that they are using to confront it.
With the AlixPartners Disruption Index, we hope to provide more perspective on these challenges and, most importantly, greater insight into what best-in-class leaders are doing to meet them.
Business leaders struggle with disruption not because they don't see it coming, but because the solutions are not simple. Leadership strategies, business processes, and operating models that served them well in the past break down in the face of disruptive change. And the speed and magnitude of approaching disruptions are often difficult to gauge. The tsunami looks like just another wave until it's almost on the shore.
At the heart of this leadership challenge is a clear paradox: companies must not only mitigate the effects of disruption but also take advantage of its opportunities. New and innovative technologies, products, services, and operating models will likely underperform established ones—until, of course, they don't. Justifying necessary investments based on traditional ROI measures can feel like a leap of faith. Juggling the competing priorities of managing incumbent businesses while positioning for the future becomes an existential challenge.
In confronting this paradox, doing nothing is the worst-possible choice. Given the pervasive and overwhelming nature of disruption across industries and geographies, our collective experience at AlixPartners in helping companies in their most critical moments provides perspective to otherwise healthy companies that are confronting disruption.
Leadership is paramount. It is imperative to prioritize what really matters, adopt a sense of urgency and speed, and communicate a vision for the future clearly, consistently, and frequently.
All of this starts with you, as a leader, taking control of your organization's future. How your business fares against disruption is partly down to the external environment—which is beyond your control. But success is also determined by the speed of your response and the quality of your leadership—which are absolutely within it.
I hope this report provides helpful insight into how to boldly tackle the challenges your business is facing and how to begin unraveling the disruption paradox.
Download : 2021 AlixPartners Disruption Index: Confronting The Disruption Paradox
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