All businesses face daily challenges from competitors and changing circumstances, and while they can be a problem, they can also provide an amazing opportunity. These are the 3 biggest challenges for UK businesses in 2018 and how you can benefit from them.
IVE wanted to know what issues were facing businesses so we got IBM Europe’s Rashik Parmar, entrepreneur Jonathan Straight and our own Rosi Lister and Drew Rowlands together to discuss this topic. You can watch the video of that chat below or read on for a summary.
For Rashik Parmar, the single biggest risk to a successful business is complacency. As he explains;
“I think all businesses go through a cycle of idea, exploitation, experimentation, new idea and that cycle repeats. For many entrepreneurs, they come up with an idea, often they have multiple attempts at getting that idea into the market until one lands and often they are so focused on protecting that one idea the risk is getting stuck in exploiting that successful idea and failing to look ahead.”
“Take taxis as an example. As little as 5 years ago, if I were to phone a taxi cab the person on the other end would say it’ll be there in 15 minutes. You knew that was a guess at best and at worse it was a blatant lie, because you had no idea how long it would run. But with the advent of an Uber, the digital representation of that taxi and seeing the traffic pattern gave you confidence in the times.”
“Until Uber comes along, the owners of taxi companies are busy running taxi companies and not contemplating that something could come along and disrupt their business. But once it does, they’re scrambling to replicate that service.”
“But, once that idea is in the marketplace it’s very easy for someone else to replicate it and replication can happen anywhere. With a more interconnected world than ever before, an Uber launching in America can be replicated by Japanese taxi companies before Uber has a chance to launch their service in that territory. Even the disrupter can’t bank their success on the disruptive idea. In fact, often the first to market with a truly disruptive concept can struggle because, once you can see that idea and connect it with other ideas, you can often create a more valuable service or experience for the customer.”
“And that’s with an example of a company that’s relatively geographically limited due to the nature of its service. In many industries, that challenge could easily come from anywhere in the world.”
Business owners might reflexively hit back at that idea with a few challenges. That they don’t have time to try and launch new ideas when all their time is taken up running their existing successful business. Or, that it’s impossible to know what tomorrow is going to bring so how can you plan for it? Both of which have some truth to them. Entrepreneurs are invariably stretched for time but few would blanch at making time to monitor what their competition is doing. They simply need to view this as an extension of that and factor in time to monitor wider technological and business trends and how they might impact their business and create new competitors.
Similarly, you don’t need to know the exact capabilities of technology to imagine how it could potentially change your business. Instead, you just need to know your business, place yourself in your customer’s shoes and consider what improvements to your service a competitor could offer that would cause you to lose customers.
The solution to complacency is easy to articulate, harder to achieve in practice. You need to build a culture in your business that encourages and makes time for innovation. Where staff at all levels feel free to suggest changes to improve efficiency, customer service and other outcomes.
This is, unfortunately, not most UK businesses but we’ll come back to that.
All this talk of not knowing tomorrow rases possibly the biggest scary word, uncertainty. Whether its political uncertainty, economic uncertainty or what shape Brexit is eventually going to take, how can you plan to deal with factors you could never consider?
Uncertainty is strongly linked to complacency in that the biggest effect it has is to limit risk. As Jonathan Straight explains;
“Pursuing innovation requires investment, bravery and foresight. And it necessitates risk. You can’t do something nobody has tried before and be certain it will work. But, in a backdrop where, particularly in this country, you have so many other uncertainties it’s a brave person who sticks their neck out to try something.”
It’s ironic that uncertainty tends to stifle innovation and risk but that failing to innovate leaves a business open to the risk of unforeseen competitors.
So, how do you fix it?
Ultimately, there is no perfect method to do this. We are sadly bereft of a future predicting machine. You can make contingency plans for potential outcomes or try that old Business School classic, a PEST analysis, and these are certainly sensible actions to take.
But identifying potential threats is not the same as acting on them.
Instead the key to dealing with uncertainty is to build agility into your business. To deal with uncertainty, your business needs to be able to take calculated risks and deal with them if they fail. Your processes and procedures need to be able to change if they have to change and staff need to be able to change with them. A workforce that resists change is going to frustrate any attempts to adapt to shifting political and economic factors no matter how creative and innovative the leadership is.
Which brings us to the biggest challenge for UK businesses, finding the right staff.
Jonathan Straight puts it bluntly:
“If you asked most people in business what their biggest challenge is, it’s getting the right people.”
This is a complex issue with a number of factors. Many industries, tech and creative in particular, are facing big skills shortages in key roles. But the skills gap is broader than that, with more than 70% of UK businesses reporting that young people are entering the work force lacking key soft skills including communication, time and self-management, decision making, problem solving, and taking responsibility. We would group many of these skills as a lack of creativity.
The solution to dealing with complacency and uncertainty is a creative workforce. One that can adapt to change. One that can envision a potential future challenge or opportunity. One that can come up with the ideas to deal with a challenging competitor. But a lack of a truly creative workforce is one of the biggest challenges facing UK businesses right now.
As IVE Business Director Drew Rowlands reports;
“There was a Nasa scientist called George Land who developed a test for creativity. He found that only about 2% of adults qualified as ‘creative geniuses’ but an astounding 98% of 3-5-year-olds scored as creative geniuses on the same test.”
Clearly, some of the reason for this is down to our education system. Again, Drew observed that;
“With regards to creative education, I think we’ve gone backwards. There is a stigma against so called creative subjects such as arts subjects that they’re somehow less rigorous than ‘academic’ subjects. My personal hang up is the language, we have become obsessed with an academic core and foundation. But if you look at the dictionary definition of academic, it is purely theoretical, no practical application. That would suggest science and maths have no practical application, which is clearly nonsense. Or vice versa, that English or music or drama have no canon of knowledge that needs to be learnt. So the language we use in education is flawed massively.”
“We should be talking about theoretical and applied learning. When you starts to use language like that, you begin to break down the perceived barriers between creative subjects and others. In terms of solutions we should be embracing the idea of applied learning. You learn knowledge but also have experiences to apply it.”
On this point, Rashik and Jonathan clearly agree with Drew.
“I think there’s just an innate lack of curiosity amongst many people in the workforce,” added Jonathan.
“I think this goes way back to how we educate people, what expectation we teach them to have of the work place, and the soft skills the probing, the ‘how do I do this better?’ It’s not there in many cases and I think that’s a fundamental tragedy of the UK.”
“I think the common ground between entrepreneurship and creativity and innovation are very close and if we want our workforce to be entrepreneurial, as I believe they should be, whether they’re on their own or in companies, and we want them to think outside the box to provide solutions, they need to be creative and understand creativity. I suppose there’s a small number of people who are inherently creative but for the rest of the workforce it needs to be taught, it needs to be explained and it can be taught so we should get on with it”
“the key word was experiences. When you look at curiosity, when you look at creativity, it comes from a diversity of experiences. We hear stories of people who live 5 minutes drive from the sea, but never see the sea are examples of the tragedy of curiosity in a developed modern nation. Having those experiences and being able to share them in a way which allows us to reimagine the possible, is critical.”
Clearly, there is much to be done at an education level to better prepare a workforce equipped for the challenges of an uncertain future. And this is work IVE is engaged in. Our Creativity for Teaching programme equips teachers with tools to nurture and encourage that creative ability in their pupils, to keep the 98% of creative genius 5-year-olds from becoming the 98% of uncreative adults. We also work to encourage a diversity of cultural experiences through our role as an Arts Council Bridge organisation.
But solving issues with education does nothing to help businesses now. Instead, businesses need to bite the bullet and invest in training their workforce to be the people they need, creative, flexible, resilient to change and forward looking. And they need to shape their culture to encourage these traits. Fortunately, we can help their too, with a series of training options to develop the creative potential of staff and business leaders.
If you want to help build flexibility, adaptability and, most of all, creativity into the culture and people in your business then please, get in touch with IVE today.
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