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Know How to Navigate through a Changing Landscape Innovation is Key to Managing Change During the past five years, there has been an emergence of a multi-polar world. A world no longer dominated— politically and commercially—by North America and Western Europe, but one in which developing Asia, the Middle East, Africa, and Latin America are not only more important as producers and markets, but in which capital and trade flows between these developing regions are becoming much more important. 18 UNIVERSITY OF MINNESOTA “For companies based in North America, the competitive dynamics of this new multi-polar world are being increasingly taken into close account,” says Peter Warwick. Unless companies recognize and develop professionals and business in these markets, they will not be equipped for the opportunities the world will present in the decades ahead. Warwick says the key for developed economies and organizations within them is to embrace this change. Innovation is part of the answer to managing change successfully. Whether companies develop innovations indigenously or apply innovations developed elsewhere, they will need to put more emphasis on innovation than many have done in the recent past. Peter Warwick Executive Vice President Thomson Reuters Thomas Staggs,’82 BSB Chairman, Walt Disney Parks and Resorts The Walt Disney Company Tom Staggs says that while the recent economic recession surely had an impact on companies throughout the world, the more important issue companies face is the need to stay focused on their long-term vision and strategy, while being prepared and able to adapt and thrive in the face of change. “Most established multi-national firms have a pretty good understanding of how to operate in a downturn. It’s not fun, but it’s something that well-managed firms know how to do,” he says. “What you got in the 2008 downturn was an uptick in uncertainty—or at least a greater perception of uncertainty—on many levels, including economic, competitive, and regulatory.” Uncertainty makes it more challenging for companies to focus on their longer-term goals, as it tends to discourage investment in far-reaching strategies. Those companies that were able to look past the uncertainty by managing and investing for the long term came through the downturn wellpositioned for the future. Staggs says Disney has been diligent about maintaining its long-term focus, citing the acquisition of Lucas Film Star Wars, creation of an upcoming theme park to open in Shanghai, a major expansion at its resort in Hong Kong, the launch of several Disney Channels outside the U.S., and the recent redesign and expansion of the Disney California Adventure Park in Southern California. Staggs also notes the increasing ease with which upstart companies are able to enter new markets, putting pressure on established players. He contends that companies need to seize on this competitive pressure as a catalyst to keep them focused on delivering value to their customers and clients and on investing in and sustaining their sources of competitive advantage. “Consumer access to information and choice puts increased pressure on the quality and execution of a company’s products and services,” Staggs says. “Companies and their brands that are not reinforced by consistent quality and great execution (i.e., those that don’t deliver on their brand promise), are at risk.” Another driver of rapid change is technology and the speed and scale of international business it enables. “Obviously, technology is driving waves of change that bring both risk and opportunity,” he says, noting that rapid changes lead to turbulent business conditions. “But this turbulence isn’t necessarily a bad thing. It is a chance for an organization to adapt and learn.” Ultimately, Staggs says, companies must recognize that acceleration in the pace of change necessitates acceleration in the pace of learning and adaptation. “Now more than ever, a company needs to be a continuous learning organization to succeed,” he says. “For established, successful companies, fostering an environment of learning and adaptation isn’t easy, but it is critical to continued success in today’s global environment.”


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