Deloitte’s Shift Index aims to understand the long term transformations in the global business environment by tracking 25 metrics over more than 40 years. These metrics provide a comprehensive picture of the evolution and impact of advances in digital technologies and changes in public policy over that time span. The first Shift Index report came out in 2009 and has been updated three times since.
The 2013 version consists of five separate reports, each focused on a different topic. A few weeks ago I wrote about one of them, The burdens of the past, which dealt with the growing gap between individuals and institutions in their adoption of knowledge-sharing technologies. I now want to discuss another 2013 report, Success or Struggle?, which caught my attention with its provocative opening line: “Companies are broken and many don’t know.”
“The news today paints an upbeat picture on many fronts. Corporations report record profit levels. . . All aggregate signs point to positive outcomes for the time being,” notes the report, and then adds: “Yet, other metrics tell a different story, one of increasing pressures and stress for companies, executives, and employees. An increasing topple rate indicates that US companies are struggling to maintain their leadership positions as revenues and market share prove vulnerable. . . These pressures are felt by executives charged with pursuing profitable growth and workers who must stay relevant as technology and business models change.”
This contrarian report confirms my own anecdotal observations that many companies are feeling lots of pressures and stress despite their reasonably high profits and stock valuations. Fierce competitors keep appearing from all corners of the world. Advances in technology are eroding the prevailing business models in industry after industry, - including IT, media, retail and banking. Many of these companies have adopted a defensive posture in response to such unpredictable markets, - focusing on increased productivity and lower costs, which leaves little room for creativity and innovation. It’s a jungle out there, might well be a fair description of our current business environment.