Every year, I’m thrilled to attend the EY Strategic Growth Forum®, where seasoned entrepreneurs, sector leaders, industry titans and up-and-coming startups come together to share ideas and practical advice. Prominent guest speakers discuss the business landscape, obstacles and opportunities for the year ahead, and we celebrate the spirit of entrepreneurship with members of the extensive EY entrepreneurial ecosystem.
After listening to the conversations among guests representing sectors spanning FinTech, food, manufacturing, consumer brands and more, a few common themes emerged, with all agreeing we’re in for another year of economic ups and downs and transformation across industries. Here are three noteworthy business practices from the Strategic Growth Forum that high-growth entrepreneurs should know.
1. Entrepreneurs should prioritize execution
A question frequently explored at the Forum was: “What separates high-growth entrepreneurs from the much larger pack of eager startups?” Answer: execution. Developing innovative approaches and breakthrough ideas with your team is important, but translating a great idea into a scalable, deliverable product or service with a thriving market is what secures a company’s long-term success.
Business leaders know that execution is critical. For example, Suneera Madhani, the founder and former CEO of Stax, touts that there’s no such thing as a billion-dollar idea, only billion-dollar execution during her “CEO School” podcast, which discusses comprehensive coaching material on how to run a business, as well as handling day-to-day life and enhancing productivity. Suneera espouses keeping her business focused on its verticals instead of trying to be everything to everyone.
Focused execution supports clear business priorities, helping companies deepen and strengthen their position in a market. It’s also an important guiding principle for keeping a company lean by investing in what matters and not wasting precious resources on less valuable endeavors that don’t delight customers or add long-term value.
2. Leverage moments of change as opportunities
Flexibility, agility and resiliency are key competencies for businesses operating in hard-to-predict environments, such as the one we are living through today. The good news is that entrepreneurial companies tend to thrive in downturns because they are adept at finding opportunity in adversity.
At the Forum, EY-Parthenon Chief Economist Greg Daco shared his perspective on what will characterize the near-term market environment, citing persistent inflation, higher interest rates, less growth and continued price volatility for commodities, goods and services. Inflation, labor, supply chains, ESG and sustainability, and cost of capital will be critical considerations for companies to manage in the months ahead, given the current environment. In evaluating these areas, companies can find a large upside.
Consider pricing strategy for example. Now is the time to confirm that it is holistic, with defined objectives, data driven and value based. Along with considering pricing strategy, now is the time to focus on cost management. In fact, a recent EY-Parthenon study found that companies with better cash management were 19% more resilient than their low-performing peers and 21% better at limiting initial shocks in the first place. Companies can then evaluate where they can make productivity and efficiency gains, central to a holistic pricing strategy, that will put them ahead of competitors.
3. Recognize that inclusiveness is good for business
A point made repeatedly at the Strategic Growth Forum was that magic happens when diverse individuals are encouraged to bring new and different ideas to the table.
Sheila Mikhail, a Mexican American, cofounded gene therapy company AskBio more than 20 years ago. Earlier in her career as a lawyer, she faced blatant discrimination when a law firm let her know she needed to stay behind the scenes because clients wouldn’t feel comfortable being advised by a woman of color.
Later, as she sought investors for a largely unknown treatment, she faced an uphill battle every day, in large part because of her gender and ethnicity. Yet, she and her team persevered beyond all odds to advance genetic technology and deliver life-saving gene therapy drugs to those in need around the world. As a testament to their success, the organization was eventually bought by Bayer.
As a woman pioneer who faced discrimination, Sheila built a leadership team largely comprised of women. She and other strong leaders know how to encourage a business culture that is open to different ways of thinking and is tolerant of individuals’ differences, including thinking and style. This is what opens companies up to new ideas, products and processes.
“… Why should we live in a world that, just because of the way we look or our gender or sexual orientation, we’re told, ‘No, you can't do that'? I refuse to give in to that,” Mikhail says.
The research on how diversity drives financial performance speaks for itself; according to a study conducted by Harvard Business Review, companies with above-average diversity had 19% points higher innovation revenues and 9% points higher EBIT margins. This isn’t a coincidence: When you create a company that combines diversity of backgrounds, educations, life experiences and skills and fosters a culture that promotes inclusiveness, you create success.
Is 2023 a bumpy road or clear skies?
As we kick-start 2023, business leaders have their work cut out for them, but when the going gets tough, entrepreneurs only get tougher. By focusing on execution, treating uncertainty as an opportunity to fine-tune operations, and doubling down on diversity and inclusion, you’ll help prepare your company for what’s ahead, whatever that may be.