(Second of two parts)
In the “new normal,” it is imperative for CEOs and business leaders to consider how they should reimagine, redesign and redefine their growth strategy. The COVID-19 pandemic has triggered widespread and systemic disruptions in every country, industry and sector, and has resulted in significant economic downturns globally. However, as countries begin the road to rebuilding and recovery, there arises an opportunity for companies to likewise transform and redirect their energies to purpose-driven growth.
In the first part of this article, we discussed the current environment and some of the considerations as discussed in a recent article on ey.com, The CEO Imperative: Rebound to more sustainable growth. We began the discussion on some key themes that CEOs may wish to consider as they lead their organizations into post-pandemic recovery. We started off talking about the importance of trust and sustainability. Now we will discuss other aspects, such as trade, technology and people.
TRADE IS VASTLY DIFFERENT
When the pandemic began spreading, it exposed underlying vulnerabilities in the areas of trade, supply chains and logistics. This situation has been compounded by turbulent geopolitical conditions that further hamper how CEOs can manage their global business operations in the face of complexities they cannot control. Examples include the tensions between the US and China, post-Brexit complications between the UK and EU, and unrest and severe COVID numbers in parts of Asia and East Asia.
With the heightened uncertainty, CEOs and business leaders are under constant pressure to revisit their supply chains, talent development and other enterprise resilience considerations. Where previously globalization was considered inevitable to drive business growth, several countries seem to be becoming increasingly nationalistic as they close borders to both trade and travelers to limit the spread of the virus in their respective demesnes. Some governments are also encouraging the reshoring of investments into certain key activities and for domestic companies to invest in self-sufficiency, particularly in the areas of basic pharmaceuticals, vaccines, energy and industrial materials.
Given this, CEOs may need to put a greater emphasis on managing supplier risk. Numerous organizations are already trying to find ways to shorten their supply chains by identifying more near-shore or even on-shore sources. As supply chains become increasingly fragmented and geographically diverse rather than globally integrated, CEOs need to consider how to make supply chains more resilient to weather geopolitical events as well as the limitations created by the pandemic. This will be particularly important when economies reopen. Companies with a purpose-led growth strategy can more agilely adjust to new opportunities, including possibly reducing or consolidating asset portfolios and exploring new technology-driven directions to growth. With a clear purpose, CEOs can better decide whether to transform/develop existing assets to support entry into new market opportunities, or whether to acquire assets for faster entry.
WILL TECHNOLOGY SWING THE BALANCE?
When the pandemic struck in 2020, many companies were caught off-guard and found themselves scrambling to not only acquire sufficient technology assets to support a dramatic and unexpected business transformation, but many also had to hastily evaluate whether their digital infrastructure was strong enough to support the business. Having to suddenly transition to remote working also made many companies re-evaluate their operational agility and resilience. Moving forward, companies will need to consider whether their post-pandemic operations will return to traditional on-site work conditions, retain remote working, or develop a hybrid of both. Regardless of the format, future working conditions will make it even more imperative to be purpose-led — which means leaders will also need to identify how to effectively and consistently inculcate their purpose into their people and align them to the company’s long-term goals.
Because of what happened last year, which is still happening today, CEOs are now considering data and technology investment as priority areas for the coming year. Many have been suddenly forced to consider how technology and innovation can support their business — and many are also suddenly seeing the benefits of incorporating digital throughout the enterprise.
One very important consideration to investing and upgrading technology, however, is to evaluate the human-technology interface in one’s operations. There has been increasing public awareness of the ethical, privacy and security risks of technology, and many customers still do not trust companies with their personal data. CEOs will need to not only consider whether they need to upgrade the technology competencies of their people, but also how to build up the trust of their customers in their digital ecosystem while ensuring the safety and security of their digital systems.
PEOPLE AT THE CENTER
One thing that remains true regardless of whether we look at the “old” or “new” normal is the reality that people are still central to any strategy. This is particularly true for purpose-led growth strategies where actions need to constantly be measured by their impact on people — not just on employees, but also customers, stakeholders and partners. Even businesses that are almost wholly digital still need the right people, talent, and competencies to thrive. Human values will always be needed to underline and drive ethical, purposeful innovation. This is a critical consideration in today’s environment when the pandemic may be forcing some organizations to consider taking shortcuts to ensure business viability.
CEOs and leaders need to understand the value of empathy towards people, not only putting themselves into the shoes of their employees and customers, but also sincerely engaging with people by applying emotional intelligence, compassion as well as adherence to shared values. They also need to understand the experience and motivations of their clients and customers, and how their personal and consumer behaviors have changed due to the pandemic.
WHAT WILL YOUR NEW GROWTH PARADIGM LOOK LIKE?
As the world continually moves toward eventual resurgence and recovery, CEOs and business leaders need to understand that new opportunities to build a sustainable future will likewise arise. focusing on building trust, emphasizing sustainability and ESG considerations, understanding new trade challenges, evaluating technological opportunities and always keeping people central to every action plan, companies can be prepared for a strong, purpose-led drive to recovery. Certainly, the time is ripe for organizational reflection.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Marie Stephanie C. Tan-Hamed is a Strategy and Transactions Partner of SGV & Co.