Since January 2009, we have been running our Opportunities in adversity program to help businesses across the globe act decisively in the economic downturn.
Since its launch, we have held some 40,000 meetings with senior executives. We are continuing to help steer many of these companies to secure a better position for the future.
We have pulled together these insights and tested our findings through an in-depth survey of over 500 Ernst & Young client service partners from our member firms across the globe and additional research by our Global Industry Centers. Combining all we have learned from our clients gives us a unique perspective into how companies are responding to the new environment.
Let’s start with three key points:
- This is not business as usual. Many assumptions have been reset, practices have been changed or are recognized as needing to change.
- Cash remains important, although it is no longer central. Even companies that are “cash rich” have a focus on working capital management and getting the balance of their funding right.
- A new business agenda is emerging. While we might be back from the brink, the economy and market environment is not getting “back to normal.”
The eight performance goals
We have identified eight primary performance goals that companies are, or should be, adopting to prepare for the rebound and to succeed in the new economy.
- Reevaluate your business model. Embed innovation and constantly challenge your existing business models against the new business environment.
- Optimize the flexibility of your operations. Improve the responsiveness and flexibility of the organization to drive down cost, improve efficiency and adapt more quickly to changes in the market.
- Optimize capital availability and deployment. Reflect the continued importance of cash and constricted funding by optimizing the availability and deployment of capital for a more flexible and robust balance sheet.
- Optimize your market reach. Optimize your global market reach and product/service mix to exploit opportunities, achieve optimum returns and mitigate risk.
- Accelerate your decision-making and execution. Make and execute decisions more quickly to take advantage of shorter windows of opportunity and respond more quickly to adverse developments.
- Revitalize the way you manage risk. Identify the full risk complexity of the market and develop and align a strong control framework for your business.
- Strengthen your management talent. Gain, retain and deploy a management team that is capable of addressing the complex market and organizational environment.
- Strengthen your stakeholders’ confidence. Regain and retain stakeholder confidence through transparency and better communication on financial and nonfinancial performance.
These eight goals are interlinked to form a wheel of performance objectives. Their importance will vary from sector to sector, country to country and company to company. But they all merit attention and, typically, progress on all of them is required to optimize your position.
