South African companies are missing an opportunity to leverage disruption and innovation to their favour, while closing their eyes to the negative consequences of not taking the potential impact seriously.
The latest survey by Grant Thornton, released on Monday, shows that 63.4% of companies in South Africa believe disruption and innovation will have little to no impact on their operations.
The second-quarter International Business Report also reveals that 18% of South African business executives indicate that they are not taking any steps to address disruptive innovation, 35% said it will not be applicable to their business and 10% have no idea if they will be affected or not.
“Too many businesses still think they do not have to think of disruption and that is alarming. Technology disruption, such as three-dimensional printing, robotics, digital medicine and nanotechnology, has the ability to affect entire industries.
“Although there is more awareness these days, there is not enough attention given to it at a strategic level,” said Grant Thornton advisory services director Michiel Jonker.
Of the 64% of respondents indicating that they had a business risk strategy in place, just more than half say their risk plan factors in disruption.
“This means that almost 50% businesses still do not consider disruption as a serious risk, or even a potential Black Swan, during risk strategy formulation,” he commented.
Companies seemingly have difficulty in developing foresight and innovation, and disruption is not part of business risk registers and strategies of companies across industries.
However, this means that companies are also missing out on the opportunity to disrupt their own industry with new technologies, developments and innovations.
“It is imperative to embrace the fact that while disruption or radical innovation could pose a threat, it also offers exceptional opportunities to forward-thinking businesses.
“In the end, the challenge for every business is to disrupt itself. Those who refuse to do so will be disrupted by others or new players in the market. At a macro level, the economy needs creative destruction in all industries to spur the next economic growth period,” he concluded.