Is your business ready for the next crisis?

In the past three years, the global economy has been reshaped by a string of shocks from the COVID-19 pandemic to soaring inflation and the outbreak of war in Ukraine. The pace of climate change also continues to accelerate, unleashing extreme weather events that claim lives and inflict heavy economic damage.

The world is experiencing prolonged economic, social and geopolitical turbulence, driving uncertainty and volatility to their highest levels in decades. For business leaders, that means continually confronting new and different challenges.

One thing is clear, we won’t return to the old normal. Business leaders have no choice but to learn how to operate effectively within today’s unpredictable environment.

Successful business leaders realize now, more than ever, that businesses have a greater responsibility to play an active part in tackling the planet’s biggest problems. That means facing our uncertain world, ensuring resilience, thinking big and developing growth strategies that are purpose-driven and focused on long-term value creation, not just short-term profits.

What are some of the actions business leaders can take now to prepare for the future?

Trust is what gives any business its licence to operate – people naturally want to have trust in the organizations from which they buy, for which they work and those in which they invest. Businesses should be aware that an important component of trust is doing the right thing. Edelman’s2020 Trust Barometer found that 80% of people expect brands to “solve society’s problems”.

Businesses must effectively communicate exactly what they are doing on this if they are to succeed in building trust. This is where corporate reporting comes in. Reporting – on both financial and non-financial metrics – is invaluable for helping businesses set goals, monitor progress and better understand the drivers that create value for their business, including their people, intellectual assets and technological tools. Ultimately, reporting provides the vital transparency that will build both stakeholder trust and buy-in to a business and its strategy.

Sustainability is arguably the biggest business growth opportunity that exists today. In particular, the transition to a low-carbon economy offers exciting opportunities for businesses to generate revenue in areas such as green innovation, cleantech and renewables.

A recent EY survey of 500 companies found that nearly 70% discovered higher-than-expected financial returns from their climate initiatives. Being a green leader brings exciting opportunities, and businesses must embrace the business case for sustainability by seeing it as a source of value – not a cost.

Supply chain disruption has been a persistent feature of the business landscape ever since the COVID-19 pandemic began. More recently, it has been exacerbated by the war in Ukraine, which has disrupted supply chains for food, textiles, car parts and semiconductors, among other products. To build resilience, businesses must entirely rethink the principles of their supply models. That means reducing reliance on single-source geographies, automating processes as far as possible, and using cloud technology to promote simplicity and visibility throughout the supply chain.

With consumers demanding greater transparency around the provenance of goods and services, it is also vital that the sustainability credentials of individual suppliers are assessed upfront and monitored continuously.

As the global pandemic proved, technology is a crucial enabler of agility and crisis resilience. Thanks to technology, millions of people were able to work safely from home and purchase goods and services without leaving the house. In future, emerging technologies such as artificial intelligence, data analytics, the Internet of Things and virtual reality will be integral to business survival. With these technologies, organizations can develop new business models, access better insight, manage costs more effectively and rapidly adapt in response to evolving customer expectations.

People are a critical driver of growth for almost every business – in good times and bad. The current war for talent demonstrates just how important people are for business. In response, leaders must put people right at the heart of their business strategies, focusing on issues such as diversity, equity and inclusion; upskilling; workforce planning; talent attraction and retention; and performance management and reward.

Agility and innovation empower businesses to adapt to change so leaders should also look to nurture an entrepreneurial spirit within their workforce. This means helping their people to take calculated risks and creating an environment where a willingness to fail is an essential element of success.

No one knows when the next crisis will hit or exactly who will be affected and how. One thing of which we can be certain is that it will come. That means businesses must do everything they can to be prepared while navigating constant uncertainty and volatility.

The definition of success is beginning to change. Growth must be sustainable; it must deliver value that will benefit all stakeholders – employees, shareholders and our wider society. This is the context in which CEOs and other leaders need to pause, take a step back and re-evaluate the point and purpose of business. That purpose must contribute to a positive impact in the wider world.

By harnessing the power of purpose and aligning their strategies with a more sustainable future focused on long-term value creation, businesses can chart a path to growth through even the most troubling and turbulent of times.