20 predictions: Why it should matter to Boards

The world we know today will look profoundly different in the future.

Technological innovation is reshaping every sector and every aspect of daily life. Our relationship with technology will only deepen with time as we increasingly rely on more digital connections for work, home, commerce, health care, education, and social interactions.

As a director governing your organization, ask yourself the following: Is your corporate strategy future oriented? Are you looking beyond regular economic cycles and shorter-term trends? Are you asking the right questions to help management set a strategic direction that establishes necessary safeguards while achieving sustainable returns over the long term? Are you considering the impact of fast-moving technology changes on employee well-being and how we work? Can you foresee new products, services, markets, or business models that will be an outcome of disruptive innovation?

KPMG analyzed modern-day trends to make 20 predictions for the next 20 years that will help boards and C-suite executives anticipate the challenges and capitalize on the opportunities that their industry and organization will operate in. A sample of the predictions range from all financial services becoming invisible and changes to how we produce and consume food, to all-inclusive holidays on Mars and the birth of super humans. Boards in their oversight role need to ensure they sufficiently understand what the future looks like, what the implications of these advances are, so they can discharge their duty effectively in ensuring management and the organization have a robust strategy in place to help navigate the organization into the future.

We grouped the 20 predictions into four strategic areas for board members to explore:

1. Social and People. The way people shop, the food they buy, the cars they drive, the products they desire, the way they interact socially has changed in the past two decades and will be radically different in the future. New technologies will ultimately augment humans, not render them irrelevant. The future workforce will include, if it doesn't already, more bots and more robots. The current workforce composition will evolve to include more freelancers or gig workers. Life expectancy will increase having an impact on workforce demographics. These transitions will require upskilling, reskilling, and micro-skilling. They will also require a review of recruiting practices, benefits programs, and succession planning. Boards are critical in this change management process to assess the opportunities and risks, while safeguarding the company's culture, principles, values and employee well being.
2. Technology. We're seeing exponential advances in technology from automation and artificial intelligence to cloud-based quantum computing and the Internet of Things. Directors must help the enterprise to boost its digital IQ and fully embrace a digital-first mindset and strategy. And in doing so they must understand for example, how sensors are used within an industry, how devices are smart and connected, how data can be combined and shared, and how to manage the related risks that will inevitably arise.
3. Economy and Markets. Financial services will become invisible. As B2B, B2G and B2C (and vice versa) become more invisible, seamless, and frictionless, organizations must respond with agile operating frameworks. Concurrently, the economy will move from a linear to a circular model that will protect the environment by eliminating waste. Products will be designed to last. Institutional investors and eco-conscious consumers will increasingly demand better and more sustainable products from manufacturers, forcing a complete rethink on product design, materials, and components. The director's role in shaping corporate strategy will include responding to changing consumer demands and dynamic market realities will be ubiquitous across organizations and sectors.
4. Political and Regulatory. One of the key priorities for Boards is navigating the changing stakeholder ecosystem and implementing governance models that allow innovation to flourish within the organization. Businesses will play a vital role in the transition to a zero-carbon economy. Stakeholder capitalism - in the not-too-distant-future – will supplant shareholder capitalism with 'purpose' becoming table stakes for corporations. Governments will be more agile in their regulatory review. Regulation may change from a focus at the entity level, to the organization's activities and outcomes. The board will have an important oversight role in ensuring the organization both capitalizes on innovation and responds to agile regulation for long-term success.

Science fiction is closer to reality than you might think. As you look to take your organization purposefully into the future, consider what lies ahead and what you can do to help navigate the path forward.

For more insights and to receive invitations to future webinars and events from KPMG in Canada Board Leadership Centre, contact us.