Organizational challenges of global trends

According to a November 2007 McKinsey global survey, in which 1317 senior executives from 93 countries participated, organizational change is seen as a crucial factor in building or maintaining competitive advantage.

The 3 global trends that appear to matter the most are: (i) the intensifying battle for talented people, (ii) shifting centers of economic activity and (iii) increasing technological connectivity.

Top business trends likely to have the most effect on business over the next 5 years

1. Competition for talent will intensify, become more global – 47%

2. Centers of economic activity will shift globally, regionally – 34%

3. Technological Connectivity will increase – 34%

4. Ubiquitous access to information will change economics of knowledge – 28%

5. Demand for natural resources will grow, as will strain on environment – 25%

6. Population in developed economies will age – 22%

7. Consumer landscape will change, expand significantly – 20%

8. Role, behaviour of business will come under increasing scrutiny – 19%

9. Organizations will become larger, more complex – 18%

10. New global industry structures will emerge (e.g. private equity, networked

Top organizational challenges by given business trend

1. Trend: Ubiquitous access to information will change economics of knowledge, n=363

Challenge: Ensuring information, knowledge, wisdom are shared across business as quickly and as effectively as possible, 51%

2. Trend: Public sector activities will baloon, n=56

Challenge: Finding right cost base, pricing model for products and services, 44%

3. Trend: Demand for natural resources will grow, as will strain on environment, n=334

Challenge: Managing operations in a way that is environmentally sound, 41%

4. Trend: New global industry structures will emerge, n=229

Challenge: Creating, capturing value from networked businesses, 40%

5. Trend: Consumer landscape will change, expand significantly, n= 274

Challenge: Managing complexity of tailoring products or services to different local conditions, preferences, without diluting the brand, 36%

6. Trend: Population in developed economies will age, n= 271

Challenge: Recruiting next generation of workers, 30%

7. Trend: Technological connectivity will increase, n=443

Challenge: Developing ability to change organization, operating model quickly enough to keep pace with technological change, 28%

8. Trend: Role, behaviour of business will come under increasing scrutiny, n=234

Challenge: Improving enterprise-wide risk-management processes, 27%

9. Trend: Growing competition for talent, both technical and managerial, n=644

Challenge: Dealing with shortages in specific skills, 26%

10. Trend: Organizations will become larger, more complex, n=235

Challenge: Increasing speed of decision making, response to external changes, 25%

11. Trend: Centers of economic activity will shift globally, regionally, n=461

Challenge: Managing an organization with operations at different stages of growth, market development, 20%

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