Kearney charts resilience-to-regeneration business struggle

A study from global consultancy Kearney finds almost half (48%) of C-suiters say their current business transformations aren’t working. 

Kearney’s report – 'Regenerate: For a future that works for everyone' – says that, since the pandemic businesses have come to understand they need to be “regenerative”, and not just resilient.

However, it shows that while 99% of business leaders globally acknowledge the need for a shift to regeneration, just 51% of them say they are operating in this way. 

Kearney says that in the APAC region, 43% of businesses report effectively implementing a regenerative culture, with 46% saying they are already operating a regenerative supply chain ‘very effectively’.

Kearney defines a ‘regenerative business’

Kearney defines a regenerative business as one that “embeds new digital models and advanced analytics, while making supply chains and people models sustainable for business and society”. 

This, it says, means “looking beyond resilience and proactively asking where value can be added back into society and the wider world”.

So instead of optimising for efficiency, the next generation of businesses “will regenerate for speed” – using external data plugged into analytical and advanced AI to bring quick and accurate internal visibility.

The findings show that attitudes across the C-suite differ. More than half (55%) of APAC CEOs say their business is very effective at operating regeneratively, with 41% saying there is still a lot of progress yet to be made.

COOs in the region, meanwhile, are less optimistic – with only 48% saying they are effective at operating regeneratively.

The research shows that most C-suites are adopting leadership styles that support regenerative businesses. They focus on action and empowering others to create their own positivity and change. A total of 49% of CEOs say they are currently operating with regenerative leadership ‘very effectively’. 

Firms 'must identify chances for growth' - Kearney

Arjun Sethi, Partner and APAC Regional Chair at Kearney, says: “Businesses must identify new opportunities for growth and impact. Resilience was the watchword of the past few years but now it needs to be regeneration.

“A regenerative business model facilitates fundamental change at the core. Businesses must take a step back and review their business models and assess their products or services and drive maximum value for all stakeholders and the broader ecosystem that they operate in.”

Sethi adds: ““The results of our survey make it clear that businesses in the region want to shift from a merely resilient strategy to a fully regenerative one that is more transformative at its core, whether that requires truly digitising their obsolete global supply chains, embedding analytics into the entire operating model or upgrading the way they develop and inspire diverse and sustainable workplaces. 

“Our research shows that APAC businesses are on the right path toward regenerative models but it is important our leaders do not lose sight of the end goal while on this journey. 

“Becoming regenerative is not just about restructuring and ironing out pain points. It’s important any plan sets the pace for long-term success and adds value back into the world in which you operate.”

Kearney surveyed 775 people – a diverse group of C-suite business leaders from around the world. Respondents are from 19 countries across all regions, with companies that have an annual revenue of $50 million or greater and employ more than 1,000 people.

The report follows a recent paper on business transformation, from Gartner, which shows that only a fraction of business operations is captured by current digital models, and that in most cases supply chain digital models are having no meaningful impact on positive decision outcomes – a phenomenon it dubs a ‘digital-to-reality gap’.