The article was published in The Business Times on 01 April 2016.
The world is changing rapidly and providing new growth opportunities from urbanisation, an increase in disposable income and a technology-savvy population - all of which will create new demand for goods and services.
Getting ready to thrive in this environment of constant change is the aim of business leaders seeking new markets, new customers or new products and services.
Results from the Global CEO Outlook Survey conducted by KPMG International last year seeking top business leaders' views on what they expect over the next three years reflect that aspiration.
One key finding is that they are aggressively looking for growth opportunities, with 89 per cent of the more than 1,200 CEOs polled stating that the organisational priority for them is to develop new growth strategies.
Regardless of which industry or country they are located in, what is clear is that businesses need an effective compass to navigate new terrains.
EXAMINING BUSINESS MODEL
A valuable lesson in corporate strategy may come in the form of experiments reportedly conducted in the 19th century that showed contrasting behaviours among two control groups of frogs.
For one group, the frogs were placed in a container of water that was very gradually heated. Due to the slow process of heating, the frogs apparently did not notice the difference and continued to stay in the container until they died.
Frogs that were not exposed to the gradual heating process and were instead placed into hot water would reportedly jump out of the container immediately, ensuring their survival.
Contemporary scientists now cast doubt on the veracity of the experiments, but the so-called boiling frog syndrome serves as a cautionary tale, highlighting the dangers that companies may find themselves in if they are slow to adapt to a changed environment.
Companies need to keep examining their business models to ensure relevance as what once worked in the past is no guarantee of continued good performance in the future.
Take the example of mega shops that stocked large collections of compact discs (CDs) in the past.
Such shops were popular in the 1990s and 2000s when CDs replaced cassette tapes, promising better audio quality.
Not long after, other new digital formats like MP3s came into the picture and promised increased convenience and choice. Consumers could then pick and buy selected songs they wanted over the Internet as opposed to buying an entire CD album.
New technology became old. Needless to say, many CD shops were shuttered. With the demise of an outdated business model, however, new opportunities also arose. Social media platforms and Internet sites sprouted up to cater to the sale of music content.
While hindsight is 20/20 vision, businesses that could have foreseen the changing tastes of consumers would have been able to switch their operating models and stay afloat.
The proverbial million-dollar question is how.
Core to figuring out how the business environment may change is a relentless understanding of customers' needs and how fresh solutions can be created to better serve their demands as their lifestyles are upgraded.
In the example of the CD sector, businesses quick to see the potential opportunities of the new digital formats could have reconsidered their retail model and adjusted accordingly.
A lesson learnt is that customers and not short-term corporate interests should come first when businesses plan ahead, to enable them to map out their strategies.
Technology features prominently in the disruption of traditional business models but, ultimately, it is an enabler for businesses to create new demand for customers' previously unmet needs.
In deciding whether to disrupt their business models, companies would have to continuously focus on the requirements of their customers now and also anticipate their future needs.
Business leaders undoubtedly have exciting times ahead.
Playing their cards smartly with customers at the centre of their attention, combined with the right plan in place, will make the journey ahead a lot brighter.
The article is contributed by Ong Pang Thye, deputy managing partner at KPMG in Singapore. The views expressed is his own.
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