Factors for success
There is no end in sight to the ongoing economic, geopolitical, health and climate challenges we face. Nevertheless, the past few years have made one thing abundantly clear: uncertainty and change are the new constants.
So, how can businesses define the right course of action amid all the uncertainties they face? Three key success factors stand out:
1. Building resilience
Resilience starts with visibility. So, leading organizations are establishing digitalized, real-time, and end-to-end visibility of their supply and value chains, which also enables them to simulate different types of disruptions. They are reconsidering their supply chain architecture (the number and location of sites and facilities, investments and divestments), and are moving from linear supply chains to integrated ecosystems and networks. They are also exploring how they can insource key functions while smartly outsourcing others to build a more agile organization. Furthermore, as EY research The CEO Imperative: How mastering ecosystems transforms performance shows, leading companies are making ecosystem business models a strategic imperative. Those who exhibit leading practices in their management and execution of ecosystem business models outperform those that do not in terms of incremental revenue growth and earnings as well as cost reduction. And 91% of CEOs surveyed agree that ecosystems have increased the resilience of their business. Additionally, leading organizations are building a resilient and flexible workforce that can adapt to new ways of working. The culture of this workforce is one where “failing quickly” is encouraged, as is taking on board learnings from past experiences to drive continuous improvement and adaptability.
2. Scenario planning
Resilience is not just about the ability to respond quickly and effectively to disruption and unexpected events. It’s as much about thinking ahead, planning for what might be coming, and being prepared. Leading companies have therefore adopted scenario analysis and planning – the systematic exploration of multiple plausible futures. EY Geostrategic Business Group analyzed current geopolitics to explore what scenarios are likely to emerge in the next five years and how those would impact businesses. This analysis is a good place to start for companies looking to embark on scenario planning.
3. Balancing capabilities across seven key drivers of growth
EY research into the growth journeys of more than 1,000 market-leading companies has shown that achieving accelerated and sustainable growth over the years requires a company’s maturity to be balanced across seven critical drivers: Customer, People, Technology, Operations, Finance, Transactions and Risk.
The research highlights that imbalances in capability maturity will lead to growing pains and setbacks sooner rather than later since the growth drivers are all interconnected. Those businesses that manage to maintain a balance of maturity across these seven drivers of growth tend to grow more sustainably.