Despite an overall increase in business confidence, companies are not prepared for the impact of disruption, a new
survey suggests.

The Suncorp New Zealand Business Success Index  found that while 78% of businesses reported being confident about handling future disruption, 57% said they had no plans to change their products and services to address market disruption in the next five years.

Suncorp New Zealand chief executive Paul Smeaton said the findings showed that despite a growing understanding that taking calculated risks was essential to business success, there was a corresponding reluctance to actually take those risks, which meant many businesses might not be resilient to disruption.

“We know you’ve got to take risks when growing a successful business, but today’s environment is changing rapidly, and businesses need to be thinking about how they will adapt to stay relevant,” Smeaton said.

Economist Cameron Bagrie said the attitudes to disruption showed some businesses were at risk of becoming
“zombie firms”.

“Even when prompted, only 59% see disruption coming to their businesses from digital platforms, 57% from new technology and machinery and 51% from customer behaviour,” he said.

“And astonishingly, only around 2.5% think advances in technology present a risk to their own firm.

“Businesses need to embrace the threats and opportunities of digitisation, artificial intelligence, robotics, and changing consumer habits to address the impact on their business models.”

Overall, the 2018 Suncorp New Zealand Business Success Index proved largely unchanged (down two points from 66 in 2017 to 64), with staff, leadership and management processes again considered to be the most important factors to a company’s success. A largely neutral to positive business community appears to be adopting a ‘wait and see’ approach following the change of government.

Smeaton said he hoped the insights from the Suncorp New Zealand Business Success Index helped provoke a conversation about whether businesses were focusing on the right things and doing enough to stay competitive.

“We are clearly faced with a climate of growing disruption but I also like to think of it as a climate of risk and reward.  These findings show that only 46% of businesses feel confident in their ability to make good risk decisions. We want to help grow that number because there is a strong possibility that for many
New Zealand businesses, doing nothing could be their greatest risk to future success.”