Our Perspective

In today’s world, Adaptation is a business imperative. Discover how to build an adaptive culture to realise opportunity in the face of constant change. ​

 

 

Key takeway:

In times of business stability, there’s lower incentive to change. But when a crisis emerges, the things that made a business successful in the past may no longer be relevant.

COVID-19 has become a catalyst for change, accelerating the next decade of innovation.


More than 90% of US business leaders believe that COVID-19 will fundamentally change the way they do business over the next five years, according to McKinsey’s recent survey of over 200 organisations1. And while the majority see it as incredibly challenging, they also agree it will provide opportunities for growth.

In this way, COVID-19 has created a burning platform across every sector – an unanticipated ‘disruptive dilemma’ trigger point, as Subculture co-founder Michael Maness would define it. His research uncovered a Universal Arc pattern that repeats across businesses, institutions and even societies - from a ’divergent idea’ through growth, and then eventually into stagnation, decline and demise2.

Digital disruption accelerated the momentum of movement through this arc over the past few decades. But according to Maness, “with COVID-19, we’re seeing that arc become a rollercoaster. It’s moving fast, and you have to prepare to ride it3.”

The initial impact of COVID-19 has proved to be a test case for this framework. We saw businesses hold true to their purpose, with leaders focusing efforts on both employee and customer experience. They empowered their teams to seek out innovative ways to get products and services to market safely, and solve for shifting customer needs. 

In some cases, the restrictive nature of containment policies necessitated the removal of legal or regulatory barriers to keep essential services running. For many businesses, COVID-19 became a catalyst to embrace new technologies and rethink flexibility and convenience for clients and employees alike. Others began to rethink traditional business models and look for new ways to diversify their revenue streams, while also lowering costs.

 

when you have a sense of urgency and you don’t have a choice, it’s incredible what you can do.”

Adaptive business owners haven’t waited for the pandemic to abate to innovate. In the words of one of our clients, “when you have a sense of urgency and you don’t have a choice, it’s incredible what you can do.”4 Examples of innovation include the rapid move to reimbursed telehealth consultations for medical specialists, or digital signatures for contracts.

This report explores how any disruptive change – from digital transformation to a global pandemic – demands a more adaptive business response. 

There is little doubt that the rapid change we have seen in 2020 will continue, and we may need to operate within its constraints for some time. However, constraints can inspire creative solutions – providing the momentum for positive change. 

 


The Universal Arc

What is the Universal Arc? How can it be explained?

Almost all businesses follow a 'Universal Arc' of creation, momentum, growth and stagnation. Learn how you can spot the changes that are happening in your industry and lead your teams through the different stages of the arc. Michael Maness is Co-Founder at Subculture and Harvard Business School's first ever innovator-in-residence. He brings his hands-on expertise in innovation to explore why it fails or thrives in business cultures.

There is little doubt that the rapid change we have seen in 2020 will continue, and we may need to operate within its constraints for some time.

Turning challenge into opportunity

In a previous paper detailing thriving through change, we analysed the impact of four core truths in business today. These drivers of change have only accelerated as a result of COVID-19.

  • Digital technology is now essential to operate in a remote working environment
  • Customer needs are taking centre stage – with businesses having to adapt to new ways of providing products and services safely
  • Urgent regulatory change has further dissolved barriers to market entry, opening the door to new competitors
  • A business’ value is no longer determined by its historical success, so much as its ability to adapt to changing market conditions.

 

 

The Adaptive framework

How do some organisations respond quickly to opportunities, turn setbacks into solutions and thrive through uncertainty?

In every sector of the market, the rules of engagement have changed. Every business is vulnerable to the rapid changes we are all experiencing – no matter their size, or how long they have been in operation. Successful companies are the ones constantly adapting and evolving. They’re not just playing the game, they’re changing it. ​

Additional information

The information on this page has been prepared by Macquarie Business Banking, a division of Macquarie Bank Limited AFSL & Australian Credit Licence 237502 for general information purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.

1

Innovation in a crisis: Why it is more critical than ever, June 17 2020 McKinsey. Data source: McKinsey Innovation through Crisis Survey, April 2020 n=200+

2

ACCE Webinar: Divergent Leadership, Michael Maness October 2017

3

COVID-19: surfing the wave of disruption (video), Michael Maness, July 5 2020

4

A catalyst for positive change, Macquarie Bank, June 2020