The Shift Index: Implications for ExecutivesThe gap between potential and realized opportunities |
The findings of our Shift Index research highlight the stark performance challenges for companies. What’s more, the data suggest that unless firms take radical action, the gap between their potential and their realized opportunities will grow wider.
Until now, companies were designed to get more efficient by growing larger. As stability gives way to uncertainty, however, institutions must increase the rate at which they learn and innovate, which in turn will boost their rate of performance improvement.
Today, we see institutional innovations propelled by individuals, especially the younger workers, who put digital technologies such as social media to their most effective use. Findings from our research indicate a correlation between the growing use of social media and the increasing knowledge flows between organizations.
Worker passion also appears to be an important amplifier. When people are engaged with their work, they seek ways to connect with others who share their passion and who can help them get better faster. In this case, management can play an important role: identify those who are adept participants in knowledge flows, provide them with platforms and tools to pursue their passions, and then celebrate their successes to inspire others.
Performance pressures will continue to increase well past the current downturn. As a result, beneath these surface pressures are underlying shifts in practices and norms that are driven by the continuous advances in the digital infrastructure:
- Wireless subscriptions have grown dramatically, creating a rich medium for connectivity and knowledge flows
- Institutional boundaries are becoming permeable as employees harness the tools they have adopted in their personal lives to enhance their professional productivity
- Talent migrates to geographies and institutions potentially because that is where they can improve their performance more rapidly. In 2009, the growth gap between the top 10 ‘creative cities’ and bottom 10 cities was 24 percent
- Companies appear to have difficulty holding onto passionate workers. The current evolution in employee mindset and shifts in the talent marketplace require new rules on managing and retaining talent
Leaders must move beyond expense cuts and instead decide which assets, metrics, operations and practices have the greatest potential to generate long-term profitable growth. They must keep coming back to the most basic question of all: What business are we really in?
It’s not just about being lean; it’s also about making investments in the future. One of the easiest ways companies can achieve the performance improvements promised by technology is to jettison the distinction between “creative talent” and the rest of the organization. All workers can improve their performance by engaging in creative problem solving.
The Big Shift framework puts a number of questions on the leadership agenda:
- Are companies organized to generate and participate in a broader range of knowledge flows?
- How can they best create and capture value from such flows?
- How do they measure their progress navigating the Big Shift in the business landscape?
We hope that the Shift Index will help executives answer those questions in these difficult times and beyond.
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
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The Shift Index
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