By Said Puentes (Co-creator of Research Lab & Culture Specialist at The Ideas Factory).
Is market & contextual research still necessary?
In a nutshell, absolutely! Business decisions can no longer be based on hunches; they must be informed by a thorough comprehension of global events and their impacts at the micro levels.
At The Ideas Factory (TIF), we believe in harnessing information to drive sustainable, ethical, and transparent growth for our clients. This article explores the importance of contextual understanding across three key dimensions: Permacrisis, Organisational Culture, and Emerging Technologies.
Permacrisis: Dealing with Constant Instability
The term “Permacrisis,” named Word of the Year in 2022 by Collins Dictionary, captures the prolonged period of instability and insecurity we continue to face. From regional conflicts to global supply chain disruptions, these ongoing crises significantly impact businesses and society.
2024 seems merely to continue a chapter of humanity that started earlier this decade. The ongoing events that destabilise social contexts are not only more frequent but also increasingly impacting the foundations of society significantly.
Here are some examples of events currently affecting supply chains, production and distribution processes, and altering consumption patterns for both organisations and individuals, across digital and analog environments:
Regional instability due to armed conflicts in the Middle East: Israel-Gaza conflict, Lebanon-Israel conflict, conflict between Houthi groups and Israel, United States and England Barria, C (2024, Enero, 11); Eastern Europe Russia-Ukraine conflict, Armenia-Azerbaijan conflict, South America: dispute over the claimed area between Guyana and Venezuela, BBC News Mundo (2023, Diciembre, 6); Uncertainty in Ecuador due to internal conflict with mafias, Paredes,N. (2024, Enero, 01). Furthermore, the expansion of conflict zones results in economic slowdowns and diminished investment confidence, directly affecting people’s lifestyles, increasing inflation rates, and modifying consumption patterns, thus directly impacting the profitability and sustainability of local organisations.
At COP 28 (United Nations Climate Change Conference): A historic agreement was reached to achieve a net-zero balance in greenhouse gas emissions. This signifies a direct commitment by the signatory countries to move away from fossil fuels. This agreement, occurring eight years after the Paris Agreement, aims to triple renewable energy capacity and double average energy efficiency, since currently 80% of gas emissions come from oil, gas, and coal.
Although this might seem distant from the organisational world and brands, this transition will require changes in logistics models for transporting goods, requiring companies to invest in aligning with the carbon emission standards set by the signatory countries, directly impacting operational costs and the final costs of marketed products or services, Perucca, G. (2024, Enero, 9).
Economic concerns continue in 2024, exacerbated by tensions between the United States and China during an economic slowdown.
These frictions are creating polarisation (Eastern Block: aligned with China, Western Block: aligned with the United States, and a third group of non-aligned countries) which, along with supply, logistics, and market destabilisation issues (including current problems with the Panama Canal due to drought), will lead to increased tariffs, difficulties in accessing raw materials and products outside the polarised blocks, and consequently, changes in general consumption dynamics, Hernandez, D. (2023, Diciembre, 11).
Organisational Culture: Adapting to Change
Organisations are an essential part of everyday life in today’s society, to the point that it is hard to imagine life without them. An organisation is a microcosm of society, based on the principle of cooperation necessary to achieve ambitious goals, involving actions that a single person cannot accomplish alone.
Just as societies are sensitive to political, economic, or cultural changes, so are organisations. These effects can propel organisations to success and future adaptability, but they can also hasten their decline.
“An ethical and transparent company is more likely to deliver value and effectively connect with its audiences and customers.”
Companies aiming not only to survive but to thrive in times of global instability must consider the following elements to grow responsibly and sustainably:
Traditional and hierarchical leadership styles are not capable of addressing the complexities and challenges of the current context, calling for more present, committed leadership capable of fostering a cross-functional flow of information and knowledge within teams. The role of leaders is crucial this year, as beyond assigning tasks and monitoring processes, they must guide their teams. This involves three elements:
- Building team stability by understanding each member’s characteristics and needs.
- Establishing trust across the team.
- Fostering team cohesion, ensuring all members are aligned, thus creating a strong organisational culture that not only drives the achievement of goals but also enhances adaptability in times of crisis.
The emphasis on formal qualifications is diminishing as hiring trends shift toward valuing skills. This trend is evident in major corporations like Google and Accenture and within government hiring practices.
This enables organisations to recruit capable talent and develop it internally, addressing the current challenges of securing skilled labour. This has also facilitated the growth of corporate universities, tailored to equip talent with specific skills necessary for their professional advancement.
The current environment opens the possibility for conflicts among employees during election periods, geopolitical crises, labour strikes, and climate change events, producing negative effects both individually and collectively.
These situations could extend beyond 2024, making conflict management skills essential for leaders to ensure team cohesion, a particular challenge since conflict resolution has not been deeply cultivated in most organisational cultures.
Diversity, Equity, and Inclusion remain central to organisational focus; however, integrating these values into business goals, daily operations, and corporate culture presents a challenge. A co-creation approach is suggested to maximise the impact of these initiatives at all organisational levels.
As efforts increase to make resources and technology more accessible, a new challenge emerges that widens generational gaps, affecting team synergy and the effective use of technology for routine tasks. Organisations must make extra efforts to find convergence points and leverage the diverse knowledge across generations.
Remote work continues to be an effective work model. However, as managers push for more regular office attendance, employees are becoming acutely aware of the associated costs. Nowadays, commuting can be seen as prohibitively expensive and sometimes less productive due to various distractions that disrupt workflow.
Organisations should consider additional benefits such as transportation subsidies and pet care to encourage more regular office attendance.
The growing penetration of Artificial Intelligence (AI) is becoming a significant concern among employees. According to a Gartner study, 22% of workers are worried about being replaced by new technologies in the coming years—a valid concern as the deployment of AI in the corporate sector is expected to increase from 10% to 70% between 2023 and 2025.
Job roles are evolving, requiring employees to adapt and enhance their skills. While AI presents growth opportunities, positive outcomes depend on organisations’ ability to communicate transition plans effectively and establish clear paths for employee development.
Company trials of four-day workweeks have proven successful: What was once seen as a radical departure from the traditional workweek is now part of large-scale studies in terms of performance, negotiation, and labour preferences.
A recent survey indicated that Job offers with the same economic benefits but one less workday per week are considered the main attraction for job seekers, which is particularly interesting given the challenge of attracting and retaining skilled personnel.
This implies that organisations need to be clearer: About scheduling, creating time slots for individual concentration, collaboration, and feedback.
Only in this way can organisations benefit from four-day work weeks, which have demonstrated increased employee performance and commitment while allowing for the examination and improvement of work processes.
AI is expected to reach its peak impact on organisational structures this year, followed by a potential period of disillusionment. This downturn is anticipated because the technology’s applications may not fully meet organisational needs and will likely require a thorough reassessment of ethical and regulatory standards to ensure companies can capitalise on AI effectively, Vera, F, (2023, November, 19).
Emerging Technologies: Leveraging Innovation
Technological advancements, particularly in artificial intelligence and digital transformation, offer opportunities to enhance decision-making and operational efficiency. By integrating these technologies, organisations can better understand and respond to the rapidly changing landscape.
Below we will mention the elements that will influence everyday life, as well as the organisational landscape, affecting brands, consumers, and digital audiences alike:
The scope and regulation of Artificial Intelligence (AI) will dominate tech-related discussions. Proper usage can offer considerable benefits, but misuse could compromise privacy, diminish transparency in online transactions, and violate ethical information usage standards.
Consequently, brands and organisations must strategise on engaging their target audiences without breaching access restrictions, Colprensa (2023, Diciembre, 25).
Cybersecurity is a critical concern due to high concerns about cyberattacks, which increased in number and scale during 2023, The Editor (2024, Enero, 8).
The creation of the AISEG (AI Smart Electromagnetic Generator) marks the beginning of nations’ commitment to sustainable energy objectives for the future. This is the first generator capable of producing energy without the need for fuels and without emitting pollutants, employing an AI-assisted electromagnetic mechanism.
This innovation not only signifies technological progress but also underscores the growing importance of sustainability in societal and organisational discussions, González, D. (2023, December, 23).
AI continues to penetrate various fields of human activity, reaching a milestone with the magazine Nature naming an AI system, Chat GPT, as one of its ten most significant researchers of the year, a first for a non-human entity, Mediavilla, D. (2023, December 13).
The International Monetary Fund has expressed concerns about AI’s potential to exacerbate inequality, particularly as it reduces the demand for human labour, potentially phasing out many jobs. According to a Goldman Sachs report from 2023, AI could replace approximately 300 million full-time jobs worldwide. The most vulnerable will be those in countries lacking the infrastructure or skilled workforce to leverage AI’s benefits, placing lower-income and older workers at considerable risk of obsolescence
The International Monetary Fund has expressed concerns about AI’s potential to exacerbate inequality:
- It reduces the demand for human labour, potentially phasing out many jobs. According to a Goldman Sachs report from 2023, AI could replace approximately 300 million full-time jobs worldwide.
- The most vulnerable will be those in countries lacking the infrastructure or skilled workforce to leverage AI’s benefits, placing lower-income and older workers at considerable risk of obsolescence. (2024,January 16).
- Investment in strategically important geopolitical sectors is on the rise, enhancing the prospects for expanding public cloud services. This development is expected to accelerate cloud service capabilities without compromising stability, Vargas, D. (2023, December, 8).
Organisations and brands must acknowledge their immersion in a globally unstable and uncertain context defined by ongoing permacrisis.
To navigate and thrive in such a dynamic environment, companies must prioritise responsible and sustainable growth. This involves adopting ethical practices and fostering a strong organisational culture that promotes trust, unity, and adaptability among their teams.
Moreover, organisations and brands need to be proactive in adapting their strategies to keep pace with rapid technological advancements, particularly in Artificial Intelligence, which is reshaping daily life and setting the stage for the future of business.
At TIF, we understand the importance of contextual understanding in driving informed decisions and sustainable growth. By addressing the challenges of Permacrisis, fostering resilient organisational cultures, and leveraging emerging technologies, we help our clients navigate the complexities of today’s world.
Don’t let circumstances make decisions for you—act now and ensure your organisation is prepared for what lies ahead.
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