Relationships the key to corporate success in 2020, says major new report

Knowledge workers will be companies' most valuable source of competitive advantage in 2020, whether in outward-facing functions such as sales or inward-facing ones such as knowledge management.

According to respondents to a major new survey on the company of the future, the value of price competitiveness to customers is expected to decline relative to other factors, such as personalisation of products and quality of customer service.

This is one highlight of Foresight 2020, a far-reaching new research report launched by the Economist Intelligence Unit, sponsored by Cisco Systems. The research is based on a survey of more than 1,650 executives and a series of in-depth interviews with senior executives, and includes essays on eight key industries.

Respondents to the survey believe that employees' ability to communicate, to solve problems and to lead will be more important to their organisations' future success than functional and technical capabilities. "The focus of management attention will be on the areas of the business, from innovation to customer service, where personal chemistry or creative insight matter more than rules and processes", says Andrew Palmer, the editor of the report.

"Customers are looking for a higher level of interactivity and personalisation," said Rob Lloyd, Senior Vice President of  Cisco U.S. and Canada Operations. "To be successful, companies have to invest in workers and technologies that can drive collaboration and interactions inside and outside the company across the entire value chain of customers, partners and suppliers."

Other key findings from the study:

- New sources of productivity gains. Although increased automation of processes remains a prominent focus for productivity growth, particularly in non-services industries, respondents expect to focus more energy on improving organisational structures and communication as sources of enhanced productivity. 

- More collaborative relationships. A majority of executives believe that high-quality relationships with outside parties will become more important as a source of competitive advantage between now and 2020. Customers and suppliers will become more involved in product development, cross-functional and crossborder teams will work together more frequently and partnerships with other organisations will proliferate.

- Shifts in IT spending. A big shift in IT investment is expected over the next 15 years. Today, such investment is focused mainly on general IT infrastructure and on financial management and reporting. By 2020, executives expect spending to shift to communications and collaboration technologies that enable knowledge management and customer service.