We’re beginning to see what the next generation of successful companies will look like.
Read the full article at: www.bain.com
It’s hard to beat a thoughtful, well-researched and well-written Bain article. In this one, three Bain partners offer studied conclusions about what companies will be doing and how they will be doing it in 2027. They offer substance to be considered.
And, reflecting the current business trend toward customer intimacy the authors discuss, this article is packaged to appeal to the individual reader with her/his unique reading and learning style. You enjoy reading on a screen? Like interactive presentation? Just scroll on down. Want to hold paper in your hands? You can print the PDF. Love graphics? Prefer video? Got you covered. It’s all about you.
It’s the perfect framework to drive home the main point of the article: that business is shifting its focus from keeping shareholders happy to keeping customers and employees happy.
“The prevailing paradigm that has underpinned business for the past 50 years is under review. The simplest version of that paradigm is that firms exist first and foremost to deliver returns to their shareholders’ capital—and the sooner they deliver it, the better.” The authors call this the “shareholder primacy” era.
This contrasts to today’s trends where “younger employees, along with many older ones, also want to work for a company that pursues a higher purpose in addition to profits…Jack Ma, founder and executive chairman of Alibaba Group, puts it clearly: ‘Customers are No. 1, employees are No. 2, and shareholders are No. 3.’ Even Jack Welch, the shareholder primacy era’s greatest maestro as CEO of General Electric, has more recently reflected, ‘Shareholder value is a result, not a strategy…Your main constituencies are your employees, your customers and your products.’ ”
The effect? A “profound shift in eras, which, over the next 10 years, will result in the biggest change in business since the 1970s. The fundamental goals of strategy will not change: Companies will still win by achieving a lower or better cost position, delivering superior customer experiences, or controlling an industry standard. But virtually every element of how firms pursue these strategic goals will look quite different.”
The article goes on to identify and discuss five areas of difference: “scale and customer intimacy; professional managers vs. mission-critical roles; assets vs. ecosystems; capital gets a reset; and Engine 1, Engine 2.” At the end of each difference is a summary, “What this could look like in 2027.”
This is good stuff. It is difficult to think there is an engaged business leader (or business person) who wouldn’t find these insights highly valuable.
Contact us and we can help you prepare for, manage, and potentially capitalize on the likely changes coming to the business world.