CEOs have a major question to address: how can you put your company back on track to growth, and at the same time create long-term, sustainable value for a broader set of stakeholders?
To tackle that question, you must first acknowledge that your new growth strategy cannot be built on the same assumptions and principles that drove results in the pre-pandemic era. Success will no longer be measured with profit and operational metrics alone. To rebound to sustainable growth, you need to reframe your strategic agenda not as a return to business as it once was, but as a new platform from which to create and protect value.
The CEO Imperative series, part of the Imperative Collection, addresses critical issues and actions to help CEOs reframe the future of their organizations. Here, we’ll outline why you need to initiate a purpose-led reimagination of your strategy to navigate a path to growth in the post COVID-19 business environment. We’ll also identify the cornerstones on which such a purpose-led strategy should be built: trust, trade, technology, sustainability, with a fifth connecting element that stabilizes these foundations – people at the center of it all.
More than a year since the pandemic began, many countries are still affected by restrictions that are significantly curtailing business activity. But even in those countries and industries where economies are beginning to rebound, the pandemic has left an indelibly changed business environment. COVID-19 has shifted how businesses are viewed by their customers, employees, investors, and regulators, as well as wider society.
Over the past year, several transformative forces have intensified and converged to ignite a burning platform that’s forcing businesses to redefine how they create, deliver, and communicate value. These include:
- Geopolitics. A rapidly changing geopolitical, trade and regulatory landscape, with many governments moving to a more interventionist policy position.
- Environmental concerns. The increased focus on the climate emergency and environmental impact wrought by businesses themselves, has led many institutional investors to change their portfolio inclusion criteria. Assets under management with a focus on ESG impact (environmental, social and governance) are projected to climb to US$53tn by 2025. The figure already stands at US$37.8tn, up from US$22.8tn in 2016.
- Changing customers. A growing consumer trust deficit has also surfaced, driven by rising customer expectations around business transparency and sustainability.
- Talent. Companies are facing increased competition to attract and retain a skilled workforce, exacerbated by employees campaigning on issues such as health and safety, and issues of diversity and inclusiveness.
- Technology. Continuous technological disruption and convergence, which cuts across industries, is here to stay.
The accelerated impact of these trends has created a strategic imperative for you to re-evaluate your organization’s purpose and create long-term value by addressing the expectations of a broader range of stakeholders.
In this environment, understanding your stakeholders’ demands and delivering value for your employees, customers, shareholders, and broader society will ultimately position your company to better adapt to changing market dynamics and drive greater financial value.
Read the full article at https://www.ey.com/en_us/ceo/the-ceo-imperative-rebound-to-more-sustainable-growth.