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Are we ready for the future business world?

The Turkish Society for Quality (KalDer) organized the 13th of its “In Search for Excellence” (MAS as a Turkish acronym) symposia in Izmir on June 12-14.
The main theme of this successful symposium was “New World, New Approaches”; and I had the opportunity to share my views as panelist of the panel discussion on the “Future Business World”.
It was a nice opportunity for me too to be able to support the KalDer Movement, which we have been supportive of since the very first day as the Sabancı Group companies, in this fashion, and to be able to draw a connection between the competitive environment of the future, and KalDer’s “Total Quality” and “Excellence” approaches.

I shared my views under 4 main headings:
Opportunities/challenges rapid changes in the world create,
How can we effectively manage and benefit from this volatility in the business world?
What are the opportunities for Turkey, and how can we seize them?
How should leaders prepare themselves and their teams for the future?

Let's further elaborate on these items;

Opportunities/challenges rapid changes in the world create:

What are the opportunities?

  • Strong growth is continuing, showing a trend of "polarized" growth" (rapid-growing "developing economies" and slow-growing/stagnant "developed economies". However, there are serious risks and pressure for austerity.
  • Two "New Markets" have formed in line with global consumer profiles;
    • The rising middle class particularly in rapid-growing countries, and
    • New consumer classes forming as a result of growth in less-developed countries
  • Growth associated with clean technology (environment-friendly products, energy efficiency),
  • Demographic facts: "growing and ageing population" and increasing healthcare needs,
  • The rapidly growing field of information technologies, and the radical change in the social structure and business models associated therewith... A restructuring of e-commerce and marketing.

What are the challenges?

  • The constantly high level of political and economic risks (elevated levels of public debt);
  • Increasing regulations;
  • Unemployment and protectionist practices it triggers;
  • Demographic facts (bottleneck in qualified labor force).
In a nutshell, Economic uncertainty and the volatility caused by risks induce executives to be more sensitive to risks, and investors to act more cautiously.

How can we effectively manage and benefit from this volatility in the business world?

There are major changes in the business world, but the formula of success remains the same:

  • Customer – "Listen well, create new value"
  • Competition – "Follow closely, create a difference"
  • Technology – "Renew continuously, lead the way"

What is new in this period?

  • Devising long-term strategic plans/scenarios to manage volatility and risk

    Currently, the average span for planning/projecting in companies around the world is four years, but in a period like this one, it becomes critical to make projections for at least 10 years into the future, and to prepare sector-specific scenarios. For instance, there are many alternative scenarios regarding how the electric car market is going to materialize in the years to come. Managing volatility by making projections for these scenarios will determine the "survival" of automotive companies.

  • The need for sustainable profitable growth – but how?

    There I told the audience that there is a dilemma between profitability (efficiency/optimization) and growth (entrepreneurship/investing in the future), and that both have to be managed simultaneously to achieve "profitable growth". I said that, in other words, managing the dilemma means developing new business lines while investing in the core business, as well as achieving innovation and efficiency at the same time.

  • Seizing the opportunity of "continuous renewal" in a volatile world

    Most organizations achieve growth through the conventional approach based on "existing business, existing market growth". However, this approach is not valid for the long term since it is no longer sustainable to deliver the same service/to the same customer in the same market. Offering existing customers new business models, and entering new markets through new competencies, and repeating this cycle, in other words the "continuous renewal" approach, enables sustainable profitable growth.
    Success factors for continuous renewal, on the other hand, include raising entrepreneurial executives with a focus on renewal, and organizing new initiatives separate from the "core business".
In short, "moving to more flexible and entrepreneurial models of management/managers" from conventional management approaches seems to be imperative to survive in the future.

What are the opportunities for Turkey, and how can we seize them?

"For a volatile/dynamic future and a Rising Turkey ready for this” the most important opportunities are expanding our industry, and generating more efficient, innovative and large-scale businesses. While expanding our existing industry, we need to position ourselves in new business lines and technologies.

What do we need to achieve this?

  • Turning the young labor force into qualified labor force (a general overview of the education issue)
  • Realizing key infrastructure reforms (transport, tax/legal system, employment)
  • Generating added value and increasing savings (efficiency) to reduce the current account deficit. (You can find my detailed opinions on this topic in my article on "current account deficit".)

What are our current advantages on this journey as a country?

  • Regional advantage (the MENA market),
  • Our relatively developed industry;
  • Strong and stable economic growth.

How should leaders prepare themselves and their teams for the future?

I summarized my advice to leaders against the backdrop of the issues I mentioned above under the following headings:
  • Strategy and business model… Start over, and create new ones from scratch.
  • Profitability or growth? Manage both at the same time!
  • In order to manage the increasing risk… Devise long-term scenarios.
  • Combine different competencies on your teams… Take strength from diversity!
  • Increasing sources of information… Expand your information radar!
Although it is hard to say something elaborate and definitive in the "Future Business World" where volatility and uncertainty prevail, there is one thing that I will always underline: "The overall formula of success, i.e. the customer/competition/technology rule, remains the same." It is imperative to leverage the change induced by technology in a proactive manner… In addition to that, it is more important than ever to make projections today about the new opportunities and challenges the "environment-society-economy" interaction will lead to in the long term.

Kind regards,

Mehmet N. Pekarun