Comparing North American companies against their peers across the world is a complex matter. Especially in terms of change adaptability. In developing countries, change adoption is a way to secure future survival. Change programs happen more frequently and entrenched in normal business operations.
When we refer to change, it is not just implementing a system or automating a process. It refers to making fundamental changes to business models and operations supported by changes in strategy, people, process and technology to achieve a step change in business results.
Here are some reasons for change adversity in the North American business environment:
Legacy Systems and Processes:
North American companies, especially well-established businesses, may have a long operational history with legacy systems and processes that are deeply ingrained. Changing these systems are costly and complex, leading to resistance to change.
Regulatory Environment:
Developed countries like those in North America often have more mature and stringent regulatory frameworks. Complying with these regulations can be challenging and costly, which may discourage companies from embracing change that could potentially disrupt their operations.
Risk Aversion:
North American business culture often prioritizes risk management and shareholder value. The fear of taking risks and the emphasis on short-term financial performance can lead to a reluctance to invest in change initiatives that might not show immediate returns.
Investor Expectations:
Companies in North America often face pressure from investors and shareholders for consistent quarterly results. This focus on short-term profitability can discourage long-term investments in change and innovation.
Corporate Culture:
Some North American companies may have deeply rooted cultures that are resistant to change, especially if they value tradition and stability. Changing entrenched cultures can be challenging and long-term effort.
Competition and Market Dynamics:
Developed markets in North America are highly competitive, which make companies wary of taking actions that could disrupt their market position. In contrast, businesses in developing countries may face different competitive dynamics that encourage them to be more agile and open to change.
Resource Availability:
Some businesses in developing countries may have fewer resources and face more immediate market pressures. This can necessitate adaptability and a willingness to change to survive and compete, compared to North American market realities.
Innovation Ecosystem:
North America has historically been a hub for technological innovation, and many companies in the region may rely on their historical success and dominance in certain industries. This can lead to complacency and less motivation to change.
Globalization:
Many North American companies operate globally and face complex challenges in adapting to change across multiple markets with varying regulations and cultural norms.
Market size:
North American companies have access to significant markets, both in financial and consumer size. This leads to complacency where products innovation starts lagging other markets.
It’s important to emphasize that these trends are relevant to other developed markets, such as Europe. In recent years, many North American companies have been at the forefront of innovation and digital transformation. In a large part, many companies have been slow to embrace change, focusing on maintaining the status quo. Becoming more change agile, must become an agenda item for CEOs, to ensure North America retain its legacy as a hub for innovation.
