The only certainty is uncertainty, says Standard Life chief
The global business world is changing and changing fast. David Nish CA, CEO of Standard Life, discussed how companies need to adapt to this new regime at a recent ICAS event.
A new paradigm is developing for business. Too many leaders are making the mistake of seeking stability as a prerequisite for action, rather than understanding and exploiting uncertainty and ambiguity to drive strategic progress.
These were some of the messages from Standard Life CEO David Nish CA during his recent ICAS Business Insights talk in London.
David said: "You have to take it as given that uncertainty is now there, full scale, all the time. There is no such thing as stability in today's world. There are too many variables and dynamics that are in play.
"Many companies have been used to operating believing they can influence their narrow markets; this is no longer the case."
'Asset bubbles and a savings glut'
The Standard Life Chief Executive said that rising income inequality, low interest rates and a shortage of safe assets for investment across the world are part of this growing uncertainty and change.
He said: "There's a lot of talk about asset bubbles around the world at the moment. Stock markets are at all-time highs. Interest rates are at all-time lows. Are there enough good quality investment opportunities? Is capital available or do we have a savings glut chasing down returns? Does real revenue growth exist?"
India, David said, can be portrayed as the 'hope for the planet': "India provides a huge scale investment opportunity, particularly as it starts to develop its infrastructure."
Taking a long-term view
David said that companies need to understand their context – and place – in the societies and markets that they operate in.
He added: "Companies who succeed are ones who actually hold on to the long-term, irrespective of the pressures they are going to bear in holding on to that. You need to connect better with and really understand your end customer, markets, and the people who influence your business."
Transforming Standard Life
David spoke about the process that Standard Life has recently completed to transform the company. As part of this, the company asked its people to answer the question: 'Why does Standard Life exist?'.
About 4,500 contributed statements to define the organisation's purpose and strategic focus, which the company used to create a statement of Standard Life's "Why?".
David said: "It's our people's description of us; what's important to us, how we want to act, behave, what we're trying to achieve. It doesn't have any financial numbers in it.
"It's all about helping us to sustain Standard Life over the long term; we are 200 years old in 2025. Organisations with a strong 'Why' have a hope of taking on this world, and all the challenges it throws at you."
Investing in people
Standard Life was floated in July 2006 and is now worth £9.4bn. David said: "I remember when I joined Standard Life, we had several challenges to demonstrate the organisation could/should survive. The view was we didn't have propositions, we didn't have performance, and we didn't have a focus.
"A lot of what we had to do was a fight to survive. But then once you do that, you really appreciate what you've actually got in the organisation. And that's really what we've tried to build upon, which comes back to our heritage and, most importantly, our people.
"You have to invest in people continually. There's only one asset a company has, deep down – its people."
Watch on demand
Watch Standard Life CEO David Nish's ICAS Business Insights talk on transformation in the wake of global uncertainty.