New research from The Economist Intelligence Unit, presented by American Express, examines ten core business challenges from two perspectives: business views and market data. To collect business views, we surveyed 1,675 senior executives across ten major markets on aspects of business, including talent, technology, and supply chains. The market data represents over 1,200 comparison data points collected from national, international and specialist data sources. We then analyzed where business views were aligned—or not—with the market data to reveal the real challenges and how a different focus could point to opportunity.
Globally, The Business Reality Check found that:
A human touch matters
The rapid pace of technological change is dizzying, and keeping pace is the top priority for business leaders. Still, a human focus in business remains vital. In many countries, employee engagement is low, skilled workers can be hard to find, and organizations are structurally complex. These “soft” challenges around talent and internal complexities require a human touch—technology or capital investment alone cannot solve them.
A broad approach to address both the human and strategic dimensions of digitization can help executives capture the full potential of new technologies. Market data reinforce that companies can get the biggest bang for their buck by critically assessing which technologies to commit to, and addressing any resistance workers may have to the changes involved.
The customer remains king
Keeping up with fast-shifting customer demands is a major challenge. Demographics are changing rapidly, and in today's hypercompetitive, data-driven economy, consumers increasingly demand more personalized offerings. Companies can use technology to understand their customers better, but they must first earn their trust in how they collect and use customer data.
Case in point: consumer trust in business declined by an average of 1.5 percentage points from 2016 to 2017 in the ten countries included in the Business Reality Check (according to the Edelman Trust Barometer). To combat this drop, integrating customer opinion into product development (open innovation) is one way businesses can learn what customers want—and also build trust.
Managing talent is tougher than many believe
While market data indicates that talent management is a top business challenge, executives may undervalue this obstacle. A sharpened focus on employee engagement, with a particular eye on combating resistance to change among workers, may help solve internal challenges.
According to the Business Reality Check, only 23% of executives see talent management as a key challenge (rank 8th out of 10), even though market data suggests it’s a top-three barrier to doing business. This gap is mostly due to different perspectives on resistance to change in the workplace, and how it can hinder strategy execution and innovation. Business leaders can tackle this resistance by focusing on change management and including workers in strategy development, in addition to promoting engagement through wages and other tangible benefits.
New risks are emerging in cross-border business
Business leaders are scouring the globe for the next growth market and are focused on improving their ability to manage cross-border risks, rather than avoid them. Less than a quarter of business leaders are seeking to avoid cross-border regulations, for example, by reducing their global footprint.
As business leaders continue to look outward, there are emerging risks that need to be managed. Data and technology will permeate operations at an increasing pace for global firms, and international data flows are the next frontier. Business leaders concur with the market data in seeing cross-border regulations regarding data flows as a top concern.
To compare your own challenges and uncover opportunities for your business, visit the Business Reality Check.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
