How can organisations thrive in a complex world of risk?
In this regional analysis of Boyden's global report, Strengthening the human-centric core of Industry 5.0: How can organisations thrive in a complex world of risk?, we highlight findings and trends in Europe with sector insight from Boyden partners.
Findings show European respondents are well placed to succeed through Industry 5.01 benefiting from, in comparison to other regions:
Digital advances are the top driver of structural change within European organisations, identified by 43% of respondents, compared with third driver in the global average. In terms of cultural shifts, innovation is one of the top two drivers in Europe, after organisational agility, identified by 40% of respondents, compared with for example, 25% in North America.
European respondents are the second most confident in their organisation’s growth potential, with 80% very confident or confident; this compares with 59% in North America, 65% in Asia/Pacific, and 85% in South America where a higher proportion, 50% of all respondents, are very confident.
The top three drivers of growth are the same as the global average, (i) innovation; (ii) digital transformation and (iii) human capital, with digital transformation ranking higher than human capital in Europe.
However, risks are high. At the organisational level, the most pressing internal risks are ‘staying on top of digital transformation,’ ‘cybersecurity,’ ‘supply chain resilience’ and ‘rising business costs’. From an external perspective, European and Asia/Pacific respondents are significantly more concerned about ‘geopolitical risk’ than others. Europeans are also particularly concerned about ‘supply chain disruption,’ and together with South America and Asia/Pacific, are more concerned about ‘global economic volatility’.
Consumer & retail: human capital is the top driver of growth, and 70% are ‘extremely likely or likely’ to increase hiring into 2023. Marketing & sales is the top priority for strengthening executive expertise, while at board level it is ESG-DE&I. Digital advances are the top driver of structural change; organisational agility the top driver of cultural shifts.
Together with industrial, this sector is the most concerned about supply chains: the top internal risk is supply chain resilience, while the top external risk is supply chain disruption. In common with industrial and healthcare & life sciences peers, driving change is the most valuable soft skill for leaders.
Financial services: the top driver of growth is digital transformation, while digital advances are the top driver of structural change, together with industry transformation and global growth. This sector will make a greater investment than any other in leadership development of high potentials, with 93% extremely likely or likely to do so; also, the most likely to conduct board assessments, with 38% extremely likely or likely to do so. The most likely sector to increase its engagement of interim managers.
Cybersecurity and hybrid working are joint top internal risks. Externally, top concerns around geopolitical risk and inflation are shared with other sectors. The most valuable soft skills for leaders are the abilities to influence and to lead hybrid teams.
Healthcare & life sciences: digital transformation is the top driver of growth, innovation is the top driver of cultural shift and industry transformation is the top driver of structural change. One of the top sectors to increase hiring into 2023, with a need to strengthen executive expertise in ESG-sustainability, and at board level, risk/legal/compliance skills.
Geopolitical risk and global economic volatility are the top external risks, while effective internal communication is the top internal risk. The most valuable soft skill for leaders is the ability to drive change.
Industrial: innovation is the top driver of growth, with industry transformation the top driver of structural change. Organisational agility is the top driver of cultural shifts.
Together with consumer peers, industrial respondents are the most concerned about supply chains; supply chain disruption is the top external risk, while supply chain resilience is the top internal risk. One of the top sectors to invest in hiring, it is the most likely to hire globally-focused executives. Distinctive in identifying ESG-DE&I for strengthening skills at executive level. The most valuable soft skill is the ability to drive change.
Professional services: drivers of growth are innovation and human capital. Distinctive in identifying competing for the right talent as the top driver of structural change. The top driver of cultural shift is innovation, and uniquely, multi-generation teams. Needs to strengthen executive expertise in R&D, and at board level, expertise in finance. The most concerned about recruitment challenges through 2023.
Global economic volatility and geopolitical risk are the top external risks; staying on top of digital transformation is the top internal risk. The most valuable soft skill is the ability to inspire teams.
Technology: top driver of growth is digital transformation, while the top drivers of structural change are jointly digital advances and hybrid working. Uniquely, respondents identify customer needs as the top driver of cultural shifts. The most likely to retrain or redeploy executives and hire more diverse talent. Greater expertise in finance is needed at executive level, supply chain skills at board level. The most concerned about retention challenges through 2023.
Top external risks are jointly geopolitical risk, industry competition and national economic volatility; the top internal risks are jointly rising employee costs and employee burnout. The most valuable soft skill is digital & innovation savvy.