Businesses struggle to embrace regenerative models

A new Kearney survey found 56% of C-suite executives express dissatisfaction with current business transformations. While the concept of regenerative business gains traction, only 43% effectively implement these models, highlighting the need for a transformative shift in corporate strategies worldwide.

A new survey by global consultancy Kearney revealed 56% of C-suite executives admit that their current business transformations are not yielding desired results. Despite the worldwide shift from a focus on resilience during the Covid-19 pandemic to the concept of “regenerative” business models, only 43% of businesses are effectively operating in this manner.

“Regenerative business” refers to companies that embed new digital models, advanced analytics, and sustainable supply chains and people models, seeking to add value back into society and the wider world. This approach moves beyond mere efficiency, focusing on regenerating the entire business system, from supply chains to customer experiences and organisational cultures.

Kearney’s survey, titled “Regenerate: For a future that works for everyone,” gathered insights from 800 C-suite leaders globally. The findings underscore a pressing need for businesses to adopt a long-term approach to becoming truly regenerative, regenerating for speed and using external data, analytical tools, and advanced AI to navigate the evolving landscape effectively.

The study revealed a significant gap between the aspiration for regenerative business models and their effective implementation. While 99% of global business leaders acknowledged the importance of becoming regenerative, only 43% reported that their companies were operating effectively in this manner. Moreover, just 40% of businesses have successfully implemented a regenerative culture, and 45% are operating a regenerative supply chain.

Attitudes within the C-suite vary, with 48% of CEOs believing their businesses are very effective at operating regeneratively. However, 58% of COOs believe there is room for further progress.

The research also indicated a shift in leadership styles, with almost half (47%) of CEOs integrating the regenerative model into their leadership strategies.

The retail sector emerged as a leader in embracing regenerative practices, with 53% of businesses in this industry operating regeneratively. These businesses are leveraging technology to limit waste of energy and materials. Similarly, the energy sector is making strides, with 46% of leaders reporting effective implementation of regenerative practices, focusing on systematic changes to their business models and supply chains.

Commenting on the findings, Alex Liu, managing partner and chairperson at Kearney, emphasised the need for fundamental change within businesses. He stated, “Unexpected is the new expected, there is no normal as we navigate these necessary self-disruptions. More is needed and more is possible.”

Abby Klanecky, partner and chief marketing and client services officer at Kearney, emphasised the importance of a long-term vision. She highlighted that becoming regenerative is not just about restructuring but about adding long-term value to the world in which businesses operate.

Theo Sibiya, partner and managing director: Africa at Kearney, stressed the significance of African organisations adopting regenerative practices, moving beyond familiar norms to reengineer activities along the entire value chain.

As businesses navigate this paradigm shift, the challenge remains to bridge the gap between aspiration and implementation, fostering a future where regenerative practices are not just a goal but a global standard.

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