Statistics show that in the 20th century, 50% of companies in the labor market changed every 25 years. This means that, for example, of the top 100 companies that existed in a certain industry in 1975, 50 companies no longer existed 25 years later, in 2000, and were replaced by others. It turns out that companies had a 50/50 chance of surviving for 25 years.
It is said that today, these 25 years have come down to 15 years. That is, 15 years from now, half of the companies operating in the market, be it a hotel, restaurant, financial institution, training center, or otherwise, half of them will no longer exist in 15 years. New companies will emerge and replace them.
The main question is: In which category will your company find itself—will it exist or disappear?
This article from Flowmaster’s team addresses precisely this issue, and at the end, we will give you specific advice on what you can do to increase your company’s chances of survival and success.
Today there are three main risks and, consequently, three main tasks that must be accomplished if you want your company to exist in 15 years.
Like in fairy tales, we can imagine these risks as a three-headed dragon. The next 15 years are the dragon, and if we cut off all three heads, we will win. What are these three risks?
- Effective use of technology. In other words, achieving better results with fewer people. The use of technology, process automation, robotisation, etc., is the crucial key to increasing productivity. It turns out that you must be able to achieve the same or better results with fewer employees.
- You must be able to attract and retain new, “Gen Z” and “Gen Alpha” employees. If you cannot attract and retain these people, you will surely perish in the next 15 years.
- Ensuring the flexibility (Agility) of management processes and the company.
Thus, if you fail to use technology, you will perish; if you fail to adapt to the new generations, you will perish; and if you fail to make management processes flexible, you will also perish. Therefore, it is very important to consider this trio in more detail.
Let’s start with technology. Its effective use, or doing more work with fewer people, involves incorporating Artificial Intelligence into work processes. Setting up robots and automated production processes, automating back-office work, whether financial or HR management, encouraging and setting up remote work—this is a small list of what modern companies need. Many companies cannot manage this today.
Virtual reality and online spaces, such as online stores and meta-stores, will become even more important. It will become possible, for example, to conduct training in a virtual space. In short, we must ensure that our company has a specific plan for the effective use of technologies. The outcome is clear: if you fall behind this train, you will perish in 15 years. Unfortunately, many companies today do not realize the importance of ChatGPT, the metaverse, and integrating computer games into work processes—this problem is somewhat connected to the third head of the dragon: the lack of flexible management.
The second head of the dragon is the demands and interests of the Gen Z and Gen Alpha employees, which if the company fails to adapt to, it will simply disappear. One of the best ways to attract these young people is to offer modern internship programs.
Many millennial managers in companies believe that the younger generation are bad employees who don’t want to work. The fact is that the younger generation should not adapt to the older generation, but the other way around. The future is in their hands. Sooner or later, they will become both our employees and our customers.
Therefore, if you don’t start “gamifying the job” in a timely manner, don’t create a flexible working environment, and don’t give employees the opportunity to pursue other parallel activities, your company will not make it to the next round.
The third risk lies in the company’s inflexibility. That is, if management realizes that something needs to be changed and done, but cannot implement the changes fast enough and flexibly, this will create big problems. Unfortunately, this reality is also observed in many companies.
Many managers are “used to doing things the old way,” are in their comfort zone, and cannot easily adapt to changes, or there is a problem with the hierarchy; a lot of time passes before a decision moves up and then back down, strategic processes are ineffective, and so on. These problems will consume quite a few companies.
What is the solution?
- Less long-term strategies
- Greater readiness for change from top management and ordinary employees
- Flexible systems
Large weekly meetings, job descriptions, departments, etc., no longer have a place in modern management. However, these changes will face a lot of resistance because there is no readiness from either top managers or often from employees.
Accordingly, the final question is, what should we do?
We should start a conversation in the company in these three directions: where we are and where we want to be. In order for this conversation to be sufficiently self-critical, you must involve external experts—people who are not part of your company, do not receive a salary from you, and who can boldly say that certain things are obsolete, archaic, and do not meet today’s and future demands.
We often have to talk about this in companies during training and workshops. We manage to talk in a way that company managers understand where the problem is, although, despite talking to them, some have the readiness to understand, and others do not.
Once we have involved external experts and discovered the cracks, we must set specific goals and assign responsible individuals who should be equipped with teams to help them succeed in their work. In addition to teams, financial and time resources are very important; simply appointing a responsible person means nothing—they must have the method and means to finance new projects.
Irina Mamulaishvili
Aleksandre Jejelava
