In today’s difficult economic conditions, companies that strongly prioritize and focus on what is within their control can maintain and earn the trust of their people, customers, investors, and other stakeholders.
Leading companies in the face of uncertainty keep their operations simple, focus on what they can control, and determine strategy by asking five key questions:
- Am I different?
- Am I fit for growth?
- Are my IT costs effective and at appropriate levels?
- Is my portfolio too complex? and
- How do I reduce the risk?
1. Do I stand out?
Differentiation includes strategic pricing strategies, evolving value proposition, providing quality service, shortening response time, realizing cross-selling and providing a unique customer experience. Leading companies in all industries are leveraging these levers across physical spaces, digital channels, platforms, before, during and after the sale.
In slower-growing markets, it’s harder to sell, so leading companies ask themselves: Why would a customer choose us? How to distinguish ourselves? How to increase market share? The good news is that differentiation going forward is entirely within the company’s control, as long as leaders maintain laser focus in these areas.
2. Am I fit for growth?
The growth during the pandemic experienced by many companies, as well as the expectation of continued growth, led to a significant increase in the number of employees and the initiation of countless “special projects”. It also led to delays in integrating business acquisitions and postponing some tough decisions about operating models and standardization efforts. These decisions, or lack thereof, were made when money was cheap and markets were bullish. Companies in today’s markets do not have that luxury.
Profitable growth is a must and must finance itself, as investors likely will not tolerate worse margins for capital growth or no growth. So, what to do? Answer: Scale your operations and finance your growth. These two actions are completely under the control of the company itself.
3. Are my IT costs effective and at appropriate levels?
The future of many companies depends on reinventing themselves in the cloud. This means achieving real differentiation for the customer – at a lower cost.
However, for many companies, reinvention is still far away and the benefits of the cloud are not fully understood. If your company falls into this category, the market probably wants a reason. In many cases, this reason can be a lack of management alignment, a belief in a different future, or a lack of execution.
Now is the time to align closely with the executive team and think broadly about how to translate digital capabilities into business growth. This means investing in the digital transformation of operations, accelerating management decisions, making more aggressive changes and holding people accountable. The latest PwC Pulse Center survey found that 52 percent of CIOs are looking for ways to incorporate analytics into processes to make better and faster decisions through automation, digitizing legacy infrastructure, and automated IT as top priorities. To save money and drive productivity.
These actions are completely under the control of the company itself.
4. Is my portfolio too complex?
In today’s world, companies are moving to the cloud, reinventing themselves, navigating the age of energy transition, navigating geopolitical tensions, and seeing the benefits of becoming a “global enterprise” tested in a fragmented world. .
As a result of these forces, many question whether their business portfolio makes sense. We’re seeing many large companies create niche businesses, whether the goal is to help finance necessary transitions, like cloud or energy, or to simplify the overall business to increase the likelihood of a successful reinvention. Determining what should be in or out of a company’s portfolio is entirely within the control of the company itself.
5. How can I reduce the risk?
The stakes are higher now than ever. Companies face supply chain continuity risk, concentration risk in the markets in which they sell and buy, energy access risk, and additional risks related to inflation, regulation, public perception, data accuracy, security, and more.
A strong risk function is the name of the game for today’s leading businesses. This starts with an objective risk assessment and aggressive closing of gaps. Companies are trying to diversify supply chains, ensure that these chains are not concentrated in only certain parts of the world, automation and outsourcing, deflation and investment to reduce gaps are other concerns. Proactive risk management is more of an asset than ever, and companies that manage risk successfully are likely to be frustrated in their pursuit of profitable growth. Successful risk management is completely within the control of the company itself.
While it’s true that there are more headwinds in today’s markets, we can still expect winners and losers. Companies that strongly prioritize and focus on what is within their control can earn and maintain the trust of their people, customers, investors, and other stakeholders. Likewise, companies that do not focus on these areas risk losing the trust of investors, soliciting shareholder activism, and perhaps most importantly, they may also risk losing the trust of their employees, who are now more than Any other time they are looking for team leadership. The good news is that each of the above five areas can be achieved with the right focus, and they are all within management’s control.