Transformation realized? Strategies to reshape, reimagine and reinvent a better future
As a result of this crisis we know some companies will fail, others will merge or be acquired. Some of these shifts were inevitable but have been hastened by the pandemic. This rapidly changing environment offers what could be once-in-a-lifetime opportunities for CEOs — and smart, well-informed strategic choices will likely determine whether their companies will shape the future or be shaped by it.
Active steps now can secure strong positions beyond the crisis:
- Deploy dynamic scenario planning. Take a top-down approach, modeling the pandemic, assessing its economic impact, and creating working scenarios specific to the industry and current market position. While rigorous and exacting, this process should be flexible enough for changing conditions and will help companies understand the range of potential outcomes. To emerge stronger in the future, organizations must learn to navigate the dilemma of balancing today’s imperative actions while planning for an uncertain tomorrow.
- Build operational resilience. In this crisis, strategic and operational agility is a fundamental capability that companies need to build — and quickly. There is a possibility of a second or third wave of the pandemic. For a company’s strategy to be realized it needs to be flexible enough to pivot at speed.
- Understand the megatrends. While everything seems dislocated and different now, companies should distinguish between enduring changes versus temporary shifts in behavior. These deeper fundamental drivers of change always remain. Planning around those needs to be at the heart of a company’s long-term value strategy regardless how fierce the urgent pressures are.
- Be open to capital agenda decisions. While preserving cash is important for business continuity, for some it’s an opportune time to make critical investments or take decisive action to buy or sell assets. Any or all may accelerate their transformation journey.
Positioning for now, next and beyond
Major companies with whom we at EY are working are considering a two-pronged path of transformation and transactions — for example, M&A and divestments are in the strategic toolbox of many executives. These proactive strategies based on smart scenario planning and strong understanding of sector dynamics and the changing market landscape should enable future competitive strength.
From sector to sector, leaders should ask how they will better position their companies to emerge stronger beyond the crisis. Would an acquisition future-proof growth? Can I transform my portfolio through divestments? Where do I allocate my investment capital?
Securing long-term value means finding the right answers to tough questions. Realizing strategies will vary across industries — one size doesn’t fit all when dealing with this heightened uncertainty.
But one thing is certain – waiting it out is not the best option.