CEOs are driving corporate strategy amid unprecedented changes in customer behavior and a significant increase in digitization. Competition is coming from companies they had not previously considered.
Everything about strategy is changing. It used to be primarily about driving shareholder value — not anymore. Now it's about driving long-term stakeholder value.
Corporate strategy should also address the changing nature of competition. Recent EY-Parthenon research reveals that two-thirds of CEOs and C-suite executives believe the biggest competitive threat is coming from a company they don't know about.
Companies should consider increasing their capabilities, and areas like digital are critical. Executives need to bring this experience into the strategy formulation process. Many of these capabilities are not within the company but in the ecosystem — via alliances, joint ventures or even minority equity stakes in startups.
Overall, CEOs are focusing on:
- Injecting new ways of working, operational agility and programs that allow talent to be deployed across the enterprise in a much fluid or rapid way
- Pursuing inorganic changes to their portfolio as they look to buy versus to build capabilities
- Redesigning their capital allocation process to better focus on growth areas
These changes may necessitate a culture of innovation that can accelerate the path to growth from both internal sources and across a company’s entire ecosystem. When developing strategy across a wider range of employees, across trusted partners externally, across the board, it’s critical to not just refine the strategy, but also win the hearts and minds and drive the cultural change that's so critical to actually actioning a new strategy.