COVID-19 has put many organizations on the back foot, but private companies need to plan proactively and anticipate what’s next.
The good news is that more than two thirds of (71%) are already undergoing a transformation program. Such programs may have been paused or slowed due to the current situation, but they will restart — with added emphasis and urgency. Looking forward, three-quarters of private companies will conduct more regular strategy and portfolio reviews and there are already many good examples of private companies pivoting strategically to respond in a very agile way.
One example: a Chinese electric car company answered its government’s directive to produce more masks not as a compliance exercise but as a business opportunity. The company immediately created a new production line and completed both the R&D and production of a mask-making machine in just seven days, thereby becoming one of the world’s largest producers of masks.
Once a greater degree of “normality” has returned, further private company executives will look beyond the downturn and make faster moves to reimagine, reshape and reinvent their businesses to help fuel the recovery and create long-term value for all their stakeholders.
Private companies that quickly reboot their pre-crisis strategies will be best-positioned post-COVID-19, but this will demand even better use of data to understand the new market environment and evolving competitive landscape, as well as rebalancing asset portfolios more frequently through acquisitions and disposals.
In terms of deal intentions, the private company respondents remain resolute in their pre-crisis plans. While most expect the COVID-19 outbreak to have a severe impact on the global economy, almost half (48%) nevertheless intend actively pursuing M&A over the next 12 months — a higher figure than this time last year.