BrazilCompanies need to future-proof their strategies in light of corona
Over 8 in 10 companies are under pressure to polish or even adapt their business models as a result of the Covid-19 pandemic and subsequent economic fallout, according to a report by FTI Consulting.
The management consulting firm canvassed over 2,000 decision-makers across all G20 countries for its latest 'Resilience Barometer' report, including over 600 in six Asian markets (China, India, Indonesia, Japan, Singapore and South Korea), finding that the majority of companies are facing some form of change that is impacting their long-term strategy.
Not surprising, immediate working capital and broader financial resilience is one of these topics, with 64% of companies surveyed saying they are facing challenges servicing their debt requirements. The backdrop: companies have across the board seen an average revenue decline of 10% and headcount decline of 12% since the outbreak of the global healthcare crisis.
Meanwhile, over 90% of companies are placing greater emphasis on planning for unknown risks, a large share of companies are redefining their supply chains and beefing up organisational agility, over 8 in 10 are adopting advanced analytics to monitor for regulatory uplift risks, and nearly all surveyed are revamping the way they manage and support their workforce amid the massive shift to remote working.
“Businesses have never faced so many compound crises occurring at once,” said Caroline Das-Monfrais, a London-based Senior Managing Director at FTI Consulting. “If 2020 has taught businesses anything, it is that those businesses that invest in resilience will be well placed to succeed when we emerge on the other side.”
Subsequently more than three-quarters (83%) of companies surveyed by FTI Consulting believe they must fundamentally re-evaluate and future-proof their business models. This spans reassessing corporate strategies and company purpose, to revamping functional strategies such as those for mergers and acquisitions, supply chain or information technology.
According to Andrew Gerrard, a leader in FTI Consulting’s Hong Kong office, the scope of change in Asia will “arguably be higher” than elsewhere. “Companies in Asia have faced a longer period of disruption than other regions as a result of Covid-19.”
However, in a recent study from EY, which also surveyed CxO’s, Asia did come out on top as the globe’s most attractive region for growth, with both studies’ findings suggesting that business leaders will have to carefully manage the delicate line between downsizing costs to maintain competitiveness, while remaining prepared to capitalise effectively on growth opportunities.
The outlook
Looking into 2021, the survey identifies several external factors that will continue to (or increasingly) worry C-level executives. Not surprisingly, the macroeconomic fallout from the pandemic, manifesting in rising unemployment and government debt, is a pressing concern, and will continue to be for years to come.
Political issues also feature heavily on the C-Suite agenda, from rising corruption to sanctions and trade restrictions. Over three-quarters of companies globally predict that these will increase in 2021, indicating that CEOs should prepare for a more contentious and complex environment in the next 12 months.
FTI Consulting is a global consulting firm with more than 6,300 employees located in 28 countries, generating revenues of over $2.4 billion. In Asia, the firm has offices in China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Philippines and Singapore.
