Beyond COVID-19: Three things business leaders are investing in

Strong leaders are already applying what COVID-19 has taught them in order to shape the future of their business.

For many, the impact of COVID-19 has meant rethinking how business leaders spend time, money and resources. In an in-depth EY survey of UK private business owners in June 2020, nearly two in three respondents [89 out of 151] told us that they would be changing the way they invest in their business. 

The top three focus areas emerged as: digital transformation [22%], business plan remodelling [21%] and resilience [7%]. Like ‘flexible working’ and ‘automation’, these are buzzwords that have been on the agenda for some time - with COVID-19 affirming, and in some cases accelerating, their focus.

We asked three members of the EY private team to consider what the results of the survey tell us about the changing priorities of private business leaders.

With Lucy Winterborne, EY Turnaround & Restructuring Strategy Partner, covering resilience; Simon Tite, EY Finance Consulting Director, reflecting on business plan remodelling; and Neil MacLean, EY UK Lead Partner of Finance Consulting and Intelligent Automation, discussing digital transformation, our experts considered the best approach for business leaders allocating time, money and resources in your business post COVID-19.

Resilience

"Resilience might seem like a mind-set – you either have it or you don’t", says Lucy Winterborne. "But there are ways you can invest that drive it, helping your business adapt to change with agility.

For example, successful leaders respond well to challenging times because they are already used to constantly questioning the status quo. Investing in your non-executive board, by bringing in and incentivising trusted experts and leaders in your sector, encourages an approach where you are always looking for better solutions. As a result, you will be more able to adapt and thrive."

"You can also achieve this by recruiting widely and diversely; harnessing the power of multiple perspectives will create a business more able to flex in response to change."

Another way to build resilience into your business is by focusing on and improving your cash flow forecasting.

"Though a rapidly changing landscape might make this seem redundant, just because it seems like an impossible task doesn’t give you an excuse not to do it," says Lucy. "Instead, use the opportunity to consider a range of options, testing the elasticity of your cash reserves and having the strength of mind to follow through on any difficult outcomes that emerge; for example, redundancy programmes can create a more resilient business in the long term and ultimately create more jobs in the future."

Business Plan Remodelling

"Re-shaping your business plan shouldn’t be a new concept, however the approach taken in doing so will significantly impact how successful any change is. Leaders should be periodically reviewing where they stand to continually identify opportunities for improvement." says Simon Tite.

Digital Transformation

"Everyone has a different definition of digital transformation, but there are broadly two strands: firstly, how you leverage emerging technologies to create new or modify existing business processes, cultures, and customer experiences, and secondly, the need to be transformed via a holistic approach to meet the changing and challenging nature of organisations" says Neil MacLean, EY UK Lead Partner of Finance Consulting and Intelligent Automation.

"Investing in digital transformation is about adopting changes allowing your customers to engage with you easily and staff are freed up to focus on more value-add activities to support your organisation – this is as much about cultural change as the technology. This could take the form of new digital infrastructure, such as latest generation of Enterprise Resource Planning (ERP) software – the integrated software organisations use to combine business activities, from finance to HR to supply chain management – or moving systems to the cloud and streamlining remote access working. This investment also delivers better quality data to drive better insights for future planning and decision making. We are seeing businesses accelerating the process of updating legacy systems, realising now that being able to respond well to challenges is vital to eliminate inefficiencies and making their organisations more resilient for the future."

The mind-set to invest 

Though they can be addressed separately, the three areas of investment our survey highlights are closely interlinked. Digital transformation, for example, is a keystone of successful business plan modelling in terms of data gathering; and in turn, keeping tech cutting edge provides businesses with in-built resilience – avoiding the risk of legacy systems struggling to respond to changes in demand.

The time to act is now

Short-term survival will understandably be the priority for businesses facing extreme challenging circumstances, such as those brought about by COVID-19. However, for those able to consider the longer term, the uncertain, fast-moving landscape may cause them to be cautious about taking the plunge.

Our experts suggest, however, that now is the time to consider spending time and resource, if you can – with the right solutions balancing short and long-term benefits.

Look to the recent raft at support options available – from CBILS to payment holidays – where a short-term cash injection in response to COVID-19 has the potential to fuel longer term measures.

 "Lenders have galvanised, and despite a lot of negativity around them, they all want viable businesses to survive and thrive," says Lucy. "By taking advantage of the support available now and using it to put back into the business, you can build in resilience further down the line."

Similarly, Neil points out that investment at this stage will aid recovery – and needn’t require delayed benefits.

"Spending at this time might seem like a big step, but leaders should bear in mind that short-term and long-term benefits are not mutually exclusive. The best digital innovations to choose will be the long-term investments that also deliver short-term gains. You should be assessing new digital systems and processes on these grounds."

"Difficult times can be a good time to invest, so when we are on the other side, you will accelerate and recover faster. It’s time to take a ‘no regrets’ mentality," he continued.

Simon Tite echoes this: "While this is a time of stress, those organisations that will come out of this successfully and stronger will have invested in the elements of their business that are going to make them sustainable in the future."

Collaboration is key

Wherever in your business you are investing, looking at how changes will integrate into the bigger picture is crucial. This means listening to your people.

When considering new business plans, Simon comments "Successful transformation projects are the ones that foster collaboration. The benefits of new systems and processes are very limited if you aren’t engaging people from the start – dispelling the ‘lonely at the top’ mentality and instead making investment and its application a team effort. This way, everyone is brought in and ready to see projects succeed."

Neil echoes this sentiment when it comes to digital transformation. "The best digital innovations involve looking at the end-to-end process of your business – asking your people how digital can work with them. This is what we mean by a blended workforce, using, say, automation, to free up people's time so that their value can be realised most effectively."

"As is the case with many digital transformation projects, while the technology is collecting the data, the people are still the ones making the decisions. A red flag is when businesses haven’t invested in the link between people and technology. This synergy can be achieved by listening and creating forums where people can share their expertise, rather than making decisions alone from a leadership position."

According to Lucy, COVID-19 has created an opportunity here to break down silos. "Video calls are a real leveller. Leaders going into board meetings present clear power dynamics, whereas in a Zoom call, there is a chance for the different parts of the business to interact more openly."

"Consider not only practical measures, but collaboration and sharing intelligence."