After enduring nearly two years of economic uncertainty and ongoing supply chain disruptions, business leaders are shifting their focus in 2022 to a key challenge: improving competitiveness.
The good news is the global outlook is encouraging, with the OECD projecting 5.7% global growth in 2021 and 4.5% in 2022. There is no guarantee, however, that every organization and enterprise will experience that growth, let alone surpass it. As Stéphane Garelli, a former managing director of the World Economic Forum and a professor at the Institute for Management Development and the University of Lausanne, said recently, to sustain competitiveness “we need ideas, not numbers.”
Anders Bjarklev
Anders Bjarklev
Leading consulting firms offer business strategies from sustainability to greater deployment of artificial intelligence (AI). For such competitive strategies to be the most effective, however, business leaders should also evaluate the thinking that permeates their organizations. Without the right mindset, strategy can go astray, and execution miss the mark.
5 Ways of Thinking to Improve Competitiveness
In my conversations with leaders in business and education, I have found five essential ways of thinking can stimulate innovation and enhance competitiveness:
· Diversity. Top of the list is a mindset of diversity and inclusion. The business case for diversity has been well established to improve innovation, engagement, and financial performance. While homogenous teams may have less conflict, a heterogeneous team often excels in decision-making and innovation — both of which can greatly enhance competitiveness. Over the past year and a half, large companies, in particular, have been making progress, such as greater transparency around diversity policies. However, much more can be done, starting with examining the attitudes and mindsets within teams, departments, and the entire company. Specifically, leaders need to ask themselves how welcoming their organizations are of diverse people and whether they are truly open to all viewpoints, perspectives, and backgrounds. Otherwise, no matter how much these companies talk about diversity, nothing will truly change — and a competitive advantage will be lost.
· Compatibility. Organizations cannot limit themselves to one market, country, language, or culture. To scale across borders and, ideally, around the globe, organizations need to exhibit a “compatibility mindset.” In other words, they must appeal to the needs, tastes, and desire of customers everywhere. As a Danish entrepreneur, I know this all too well, given the small size of my home market: less than 6 million people. As Anders Bjarklev, President of the Technical University of Denmark (known in Danish as DTU) told me in a recent conversation, “The key is to merge some of the global into your local scene.” Bjarklev puts this thinking into action at DTU, which ranks as one of the top universities in Denmark and in the top 10 percent of all universities internationally. (I am a DTU board member.) He sees it as imperative to embrace a student body that goes beyond those from Denmark to provide exposure to people from other countries and cultures and encourage cross-cultural thinking. “It benefits everyone in the system,” Bjarklev added.
· Proximity. When I was a medical student in the early 1990s, I joined a research group to study molecular biology and a rare condition that can happen during anesthesia. One evening, the group’s leader invited everyone to his home for dinner. Seeing a notepad by the telephone imprinted with the professor’s name, I was struck in that moment by just how fortunate I was to be in the same room with this brilliant man; conversing with him and having him listen to my ideas was an incredible opportunity. Looking back, I see this as a practical manifestation of an important part of Porter’s Cluster Theory—what Harvard Business School Professor Michael Porter has described as the “enduring competitive advantages” that are derived “increasingly in local things—knowledge, relationships, motivation.” When individuals work together and in close proximity to a leader or role model, the result is a secret sauce of innovation, creativity, and problem solving that can yield a competitive advantage.
· Respect. The flipside of proximity is to break down the hierarchy that separates those at the top from everyone else. Showing respect is a great way to inculcate this thinking, because it acknowledges that the best ideas can emerge everywhere, such as among frontline workers who are closest to the customers. Educator and author Esther Wojcicki includes respect in her “TRICK” model for developing students (and adults), along with trust, independence, collaboration, and kindness. As she sees it, respect can be a huge motivator, encouraging people’s aspirations by seeing themselves as truly capable, while also enhancing their grit to persevere and succeed.
· Curiosity. As Socrates said, “Wonder is the beginning of wisdom.” Indeed, a curious mindset is the prerequisite to lifelong learning. Stefaan van Hooydonk, founder of the Global Curiosity Institute (and former chief learning officer of Cognizant), has defined curiosity as “the driver for success for adults and … the gel that creates positive connections between people.” Curiosity helps stimulate the kind of higher order thinking that leads to breakthroughs and novel ideas. For companies that must continuously evolve or die, curiosity is the saving grace.
As we head toward a new year, competitiveness will be top of mind for organizations everywhere. But rather than jump to what they should be doing, leaders would do well to pause and consider how they are thinking. With the right mindset, strategic actions will become even more impactful for improving competitiveness in 2022 and beyond.
