The year began with a new US president promising big changes—and doing his best to do just that—and ending with most CEOs across the globe exhausted after dealing with one big issue after another. Diversity. Cybersecurity. Activism. Mega-mergers. The list goes on.
With 2017 drawing to a close, at this point one can only guess which changes in business, technology, and politics will truly last, from a leadership perspective. But we decided to try anyway, with our top 10 countdown of lasting disruptions. Here are half of them, as Korn Ferry experts see them:
10. Cybersecurity as a people issue
Gone are the days when a company’s information security team was considered the sole protector of its data and digital assets. With hacks becoming more sophisticated and frequent, organizations are finding they must communicate regularly with all employees about best practices for cybersecurity. And in the wake of large-scale breaches such as those at Equifax and Uber, where leadership failed to disclose the incidents for weeks (or in Uber’s case, at all), companies are also realizing the value of employing leaders who can develop and implement effective communication and response plans. “It’s much more than a technology issue; it really is a people, talent, and culture issue,” says Jamey Cummings, a senior client partner in Korn Ferry’s Global Technology practice. “You can’t just put some tools in place and check boxes on compliance and think you’re going to be OK.”
9. The existential crisis of brick-and-mortar stores
As customers increasingly continue to shop online, retailers announced more store closings in 2017 than in any other year on record. And with more closings expected, companies are finding opportunities for cross-collaboration. This year, Kohl’s introduced in-store Amazon smart home boutiques and began accepting Amazon returns, while struggling J.Crew began selling its clothes at Nordstrom stores. But retailers are mainly looking at how to step up their e-commerce game—particularly Walmart, which this year unveiled free two-day shipping and partnered with Google to allow customers to buy products via voice in an effort to compete with Amazon Prime. “For retailers, it comes back to the underlying story of do you compete with Amazon or do you join Amazon?” says Denise Kramp, Korn Ferry’s North America retail sector leader. Kramp says more consolidation, cross-collaboration, and store closures are expected in 2018.
8. Tough questions on trade
For decades, the United States has led the rest of the world in promoting free trade, but that’s all changing. Promising to bring jobs back to America, President Trump jettisoned the controversial Trans-Pacific Partnership in his first few days in office and has repeatedly threatened to back out of the North American Free Trade Agreement (NAFTA) if Canada and Mexico don’t give in to US demands. Across the pond, serious talks are ongoing about the United Kingdom’s future trading partners in a post-Brexit world. As 2018 kicks off, the future of free trade will continue to be a major issue for global leaders. It’s a divisive issue: In America, 52% of people say free trade agreements between the US and other countries are a good thing for the US, while 40% view them as a bad thing, according to an April survey by Pew Research Center.
7. A laser focus on board diversity
Bowing to pressure from institutional shareholders and employees, companies are getting serious about ensuring that their boards are diverse from a gender, ethnicity, and thought perspective. “The reality and statistics show that when leadership teams and boards are diverse in composition and thought, performance is quite strong,” says Tierney Remick, vice chairman of Korn Ferry’s Global Board and CEO Services practice. The latest examples include mutual fund managers BlackRock, Vanguard, and State Street, which have taken up shareholder proposals to add more women and minorities as directors.
6. Tech’s “show me the money” moment
It’s no longer enough to say that technologies such as virtual reality, AI, and the blockchain represent big opportunities for your business. 2017 was the year when companies asked themselves how they could build viable business models with real outcomes around these technologies—a trend that will continue into 2018. “[The technology is] getting more real, getting more understandable, and you’re seeing the critical move away from proof of concept to delivering sustainable value,” says Vinay Menon, a member of Korn Ferry’s Global Technology Market practice. “People are looking at this technology and asking ‘Is this about more revenue or saving costs or increasing customer experience?’”