New Business Paradigms

A year ago, the outlook was not at all rosy for Mexico; 2019 had gone down in history as a year without growth and the uncertainty generated in the country had precipitated domestic and foreign investment to the lowest levels in recent years. But the worst was yet to come; in 2020, the Covid-19 pandemic would cause an 8.5% drop in GDP, an unprecedented decline in the modern history of Mexico.

When confronted with a precipice, the proverb resounds: “Learn as if you were going to live forever; live as if you were going to die tomorrow!” Thus, we should ask ourselves if we are really learning from this crisis for the long term and applying its lessons to the present.

The most obvious lesson is to adapt: as organizations, we must adapt to increasingly volatile, uncertain, complex and ambiguous events (VUCA), redefining our vision and strategy to face the challenges and take advantage of the opportunities that every situation brings us. If this crisis has taught us anything, it is that companies need to adapt their business models to constant disruption and innovation, as well as to the new ways of working and consuming, with their implications on productivity, technology and logistics.

I would like to share with you four areas that are going to redefine business paradigms in the immediate future and that we at EGADE Business School have identified and studied in recent years: purposeful leadership, developing conscious businesses, impactful entrepreneurship and innovation, and digital evolution and transformation.

• True leaders are not guided by profitability alone, because now they are expected to contribute to the generation of shared value and the transformation of the environment. Purposeful leadership involves a mindset that promotes respect for diversity and encourages inclusion. Purposeful leaders recognize employees for their merits. They promote concrete plans and actions to ensure that their organizations have a greater impact on their communities and to avoid adversely affecting the environment. Organizational leaders face the task of relaunching the economy, for which they must deploy a global, humanistic and entrepreneurial vision, with strategic thinking to reimagine, reinvent and rebuild.
• Linked to purposeful leadership are conscious companies. It is undeniable that market capitalism, democracy and globalization are going through a crisis of legitimacy, immersed as we are in an unprecedented environmental and social decline. Under this model, companies for decades privileged shareholders' benefits over any other objective, forgetting their main purpose as agents of transformation and generation of shared value in their societies. The socially conscious paradigm promulgates business practices that elevate the humanistic sense of organizations, prioritizing the purpose of the organization, its positive impact on communities and the transformation of society.
• The main source of growth in the current knowledge economy comes from innovation; yet many companies remain anchored in the recipes of the XX century. There is an urgent need for companies and their employees to develop a continuous attitude of impactful entrepreneurship and innovation, promoting innovation and creativity to breaks paradigms. The concept of entrepreneurship does not focus exclusively on the creation of new businesses, but embraces the impact of entrepreneurship in all its facets, as well as the most appropriate environments to generate value.
• A shock such as that of Covid-19 obliges us to recognize that the present and future of organizations will depend, to a large extent, on the transformation of processes, products, services, culture, structures and business models, among others, to generate more value for customers and other stakeholders, with the support of digital technologies and the appropriate innovation processes. Therefore, we must understand the need to evolve and transform ourselves digitally, in full alignment with our business strategy.

Faced with the challenges of 2021, our ability to adapt as organizations, as societies and as individuals will be tested again. Almost no one expects a rapid recovery or a return to pre-pandemic conditions; on the contrary, but new business paradigms will help us to respond to uncertain environments and this time we cannot be taken by surprise.

Article originally published in Forbes.