The ongoing health crisis has initiated an economic crisis and, for the foreseeable future, the only certainty is uncertainty. We expect a much longer and far more transformative era of turbulence in ways that were impossible to imagine at the beginning of this year, and businesses will inevitably face many tough decisions.
Whatever way you look at it, we’ve entered into a New Reality and have a unique opportunity to think differently about how we move forward and shape the future for business and society. As the silhouette of a global recovery starts to come into focus, businesses need to be prepared to be responsive and adaptable in the coming months and throughout the next year. Markets are competitive, technology is accelerating at a frenzied pace, and the challenge of managing skills gaps and innovation is a true strategic imperative.
Consumer behaviors have fundamentally changed over the last few months across all countries, demographics, and industries. Expectations have heightened as priorities have shifted to health and safety first, which have in turn realigned core human values and beliefs. As a result, what was previously considered to be a great customer experience is no longer good enough and almost all businesses have been thrust into reorganizing their approach to customers.
But it’s not just customers that require the attention of the C-Suite. Almost every aspect of every business is susceptible to change, which can either be driven proactively from within the organization, or reactively by external forces. To stay in the driving seat, executives across all functions should be looking to challenge the status quo and uncover new perspectives to strengthen their business approach from every angle.
This means building workforces that are more agile and resilient, with the knowledge and skills to navigate increasingly digital ways of working. It means transforming business operations with strategic investments to grow revenue, while embracing and integrating the latest technologies. It means re-examining internal communication and removing barriers to collaboration, to strengthen and develop your organization’s innovation culture.
It also means keeping an eye on the external environment, leveraging regulatory change to improve business flexibility and reduce risk, while steering your organization through changes and complexity in the business ecosystem, so that you can confidently adapt to market disruptions and new competitors.
In our 2020 CEO Outlook, we interviewed 1,600 CEOs from around the world to understand how thinking has evolved since the COVID-19 pandemic. The study revealed that the world’s chief executives are using this unparalleled moment in history to lead with increased purpose and impact, with a view to both societal and economic benefit. They are protecting their people, building trust-based relationships with customers and communities, and defining a new future of growth and success for their organizations - finding opportunity in adversity.
Our goal is to recognize and act on the shared responsibility and opportunity we have to build better, stronger societies through our work and initiatives we take – to set the example for those around us and to help our clients do the same.
Overall, three key themes emerged from the survey which we characterize as purpose, priority and prosperity.
From the beginning of the year, we found that most CEOs have seen the primary objective of their organization shift from being purely profit-driven to also considering role and purpose of their business in society. Today, purpose helps CEOs understand what needs to be done to look beyond serving shareholders to also meet the needs of employee and community stakeholders.
At the same time, the massively disruptive impact of the pandemic has caused many CEOs to question whether their current purpose really meets the needs of their stakeholders. This increasingly personal and emotional connection to purpose during the pandemic reflects the fact that CEOs face the same health and family challenges as their people and communities when it comes to COVID-19.
COVID-19 is clearly not the only threat we face that has profound economic and humanitarian consequences: climate change is already a significant threat that will continue to increase in the coming decades. CEOs recognize this and are not being deflected from their ESG goals as they look to rebuild their organizations in a way that supports a new and sustainable economy. To move forward, they are looking to double-down on structural shifts that have emerged during the crisis - including less business travel and more normalized use of digital meetings, events and collaboration tools - while at the same time, experimenting radically with how work is done. For many organizations, flexible and remote working kicked-in literally overnight – a feat previously thought unlikely or even impossible in some sectors - which has radically accelerated the adoption of digital technologies in functions where it may otherwise have not been a priority.
As they look to accelerate digital innovation, CEOs are also acutely aware of the people who have to deliver: their employees. Many employees are grappling with significant anxiety about today’s situation, unease about what the future holds, while also having to embrace very different ways of working. Talent risk has risen to be named as the most significant threat to growth ahead of supply chain risk and return to territorialism.
Meanwhile, CEOs are also looking at the future of their operating model. With supply chains having been hit hard by the impact of COVID-19, CEOs are using this opportunity to re-think how their supply chain can become a competitive advantage in the New Reality.
Confidence in global economic growth has plummeted since the beginning of the year due to the pandemic. Meanwhile, CEOs are more confident in the resilience of their own business over the coming three years. A key growth lever is digital acceleration. With commerce increasingly taking place online because of factors such as social distancing, companies are having to rethink what customers want and how to deliver. The challenge now is to focus efforts and investment on the areas that generate most value and to maintain cyber security resilience.
Recovery from the pandemic does not mean a return to ‘normal’. Instead, there is an opportunity to define a new future, and three actions areas will be critical: sustainability, digital and trust.
Firstly, leaders need to ensure that we do not slip back from climate gains made as a result of the pandemic and instead build the foundations of a sustainable, green economy. Secondly, with digital acceleration shaping the future of industries, organizations will need a deep understanding of how customer behavior will shift and how to meet these emerging demands. Finally, while the pandemic has given companies the opportunity to demonstrate how they can make a real difference to society, scrutiny of corporate actions has also never been stronger.
To maintain the trust of employees, customers and communities, CEOs must demonstrate that they live and breathe their organization’s purpose. Our 2020 CEO Outlook shows that chief executives are more than willing to lead by example in these most challenging of times.
We’re here to help you build a better reality.
We define our teams based on your story, and the expertise you need to define your new reality. We’ll help you adapt your current vision - or develop a new one – and assess its consequences, so that you can be confident in the decisions you make, now and for the future.