Being “future-ready” is always a work in progress. There is a need to constantly improve or risk sliding backwards. It is hard not to worry when confronted with inflation, an energy crisis, US and China decoupling, and a war in Europe. Future-ready companies are the ones capable of delivering today while building for tomorrow. The economic challenges are very real, and the uncertainty of the macro-environment is scary – but curtailing all corporate development is what smart companies carefully avoid.
Easy money is no longer around, so companies need to prioritize where to invest. Spending must be disciplined, but this doesn’t mean blindly scaling back every innovation. As Andy Grove, former CEO of the US technology giant Intel, said: “Bad companies are destroyed by crises and good companies survive – but great companies are improved by them.” So, who is the most future-ready and likely to thrive in the coming year?
In this year’s final round-up of IMD’s Future Readiness Indicator, we cover fashion and consumer brands, technology, and, for the first time, global pharmaceuticals. In this article, we will focus on technology and pharma. Additional information about all three sectors can be found on our website at The Center for Future Readiness.
Each industry is deploying a slightly different playbook to win but the overarching theme is inescapable: corporate behaviors among the most future-ready companies are universal. Two major themes jump out. One, diversify in product market or service offering, and two, put purpose at the center to drive business development.
Tech stocks have been plunging amid hiring freezes and, in some cases, massive layoffs. Even Amazon and Meta are not immune. The entire crypto market is in meltdown. “Peloton equals Pets.com,” the former US Secretary of the Treasury Larry Summers said recently, likening the tech sector’s current woes to those of the dotcom bust of the early 2000s.
Yet, some are standing stronger than others. The Future Readiness Indicator measures a company’s strategic preparedness – think of it as a balanced scorecard. We evaluate the health of a company’s ongoing business because investing in the future requires a healthy cash flow. Executive teams also need to see beyond their day-to-day operations., which means diversity of thought is required on the management board. We take note of gender and nationality as well as the industry backgrounds of a company’s top leadership. We measure a company’s growth prospects, look at investors’ expectations, and examine the intensity of a company’s investment in startups or new ventures. Finally, we measure the trajectory of new product rollouts.