‘Change is the only constant’, we’ve often heard it said, and the fourth annual Barometer on Change commissioned by Moorhouse certainly supports that sentiment. Well over two-thirds (69%) of board members and their direct reports at FTSE 250, UK multinational and public sector organisations describe an increase in both the pace and pressure of change in 2015 – that’s up 11% on 2015, and the highest since the benchmark was first published in 2012. Moreover, a staggering four in five anticipate this to increase still further over the next three years.

What makes these findings particularly interesting is the fact that, for the previous three years, the proportion of respondents claiming the pace and pressure of change was on the rise was itself actually declining (from 72% in 2012, to 65% in 2013, to 58% in 2014). It’s interesting because it indicates a growing confidence in the stability of the recovering UK economy, and a willingness of firms to begin investing seriously in jockeying for the best start out of the gate. Businesses can look to change for many reasons, but one of the most compelling is to keep ahead of, or take advantage of changes in their market. And there has been no shortage of those in the past few years, from the emergence of challenger banks in the financial services sector, to the wide reaching Five Year Forward View in healthcare, to the land-grabs for quad play in the technology, media, and telecoms sectors, to the poll-beating results of this year’s General Election. Constant evolution, or sometimes even complete reinvention, are absolute necessities for those that intend to grow their businesses.

This year’s Barometer confirms that 81 per cent of those organisations which spent £25m or more on business transformation initiatives this year have experienced growth in the same period, more than half of them have grown between 5 and 25 per cent. And, perhaps just as tellingly, nine in ten of these are predicting further growth in the next three years. Given such stark correlations, it would seem logical to expect more and more organisations to embrace change as a route to success, yet just 16 per cent of those surveyed described their firms as change-embracing. So why the disconnect?

Ironically, it may be indirectly due to the increasing pace and pressure of change previously discussed. For leaders to be able to create and sustain a culture that is ‘pro-change’, they need to be able to secure employee support for the required transformation, and this has to begin with a clear strategy that is both well-articulated and widely understood. However, in the last year the proportion of companies describing their strategy as ‘very’ or ‘extremely’ clear has dropped from 77 to 69 per cent – the lowest for three years. The challenge is clearly to be able to hold fast to a consistent and compelling vision despite the buffeting by the winds of short-term external factors, whilst at the same time retaining the flexibility and agility to recognise that strategic priorities may need to be realigned. A lack of clarity in the organisation’s strategic vision represents a concerning potential barrier to growth, since any transformation project’s success is dependent on new processes becoming successfully embedded as ‘business as usual’.

That said, rarely in the public or private sector do we see such promising potential for a return on our efforts. As 2015’s Barometer quite clearly indicates, those organisations that have continued to back their assertions of agility in the face of changing market conditions have outmanoeuvred and left behind their competitors. And if the future belongs to the fleet-of-foot, the days in which a wait-and-see attitude seems prudent are severely numbered.

As major organisations accelerate the pace at which they prepare themselves for ever-more transformation in the coming years, we should expect an increasingly competitive climate. True differentiation is going to require agility to stay ahead of the competition – not as a buzz-phrase to wave at stakeholders, but as manifested in a corporate culture that innately embraces change initiatives that are aligned behind a clear and inspiring strategic vision. Accordingly, this year’s Barometer shows a significant increase in spending on change initiatives over the last year: cumulatively by more than £1bn, with the average spend on business transformation initiatives reaching £25.4m, an increase of nearly 25 per cent.

This level of investment suggests the right kinds of larger, more strategic transformations are coming to the fore, but leaders need to start asking themselves some tough questions. Should profits be used for payouts or for reinvestment? Should they seek growth through improving existing products and services, or via new untapped markets? Most important of all, whatever they decide to do: can they execute flawlessly? Failure to do so – or at least to learn and grow early from that failure – risks not only that project’s benefits, but the support and understanding that will be necessary to underpin all future endeavours.

By Richard Jones, Partner, Moorhouse