Whilst Covid-19 remains a disease to be mindful of, the worst of its devastating and disruptive effects are behind most business owners, writes Philip Olagunju, Partner with PEM Corporate Finance.
The focus for many entrepreneurs has shifted from ensuring basic operational survival during the pandemic to now selecting the most appropriate and specific post-pandemic growth strategies to thrive in this new environment.
Although there are many strategies to choose from, studies show that the three main areas of focus for post-pandemic business owners are centred around staff retention, ongoing digital transformation, and environmental, social and governance (ESG).
According to the Harvard Business Review, the ‘Great Resignation’, which started at the beginning of 2021, saw millions of employees across multiple sectors voluntarily resign from their jobs en masse.
Fuelled by the pandemic, other causes for the Great Resignation include wage stagnation due to the rising cost of living, long-lasting job dissatisfaction and the desire to work for companies with better remote-working policies.
Hence, in this post-pandemic environment, organisations are having to rethink their workplace policies to cater for more flexible working.
However, the ‘war for talent’ goes beyond allowing staff to work from home on Mondays and Fridays. Business leaders now need to adopt staffing strategies that help to create purpose-driven working environments by fostering cultures focused on (but not limited to) diversity, inclusion, equality, social justice, teamwork, and entrepreneurial spirit.
The rationale: Developing a purpose-driven culture can act as a magnet for talent – the right culture boosts employee engagement, which then helps to attract and retain top talent, which then helps drive the growth of a business.
The adoption of post-pandemic digital transformation has also been truly ground-breaking. Its impact on global industries has been profound, facilitating innovation, competition, and growth across several sectors, whilst simultaneously encouraging the advancement of traditional internal business functions such as sales, marketing, production, manufacturing, HR, and finance.
Technology clearly plays a significant role in creating organisational competitiveness and driving growth. Through various resources such as AI, robotics and cloud computing, businesses from small-scale startups to large multinationals have used technology to gain competitive advantages.
However, for such advantages to be sustained, the technologies available need to be combined with other factors such as tacit knowledge, cultural adoption and superior market messaging to fully ensure these advantages are maintained.
Organisations also need to consider the impact of automation on their employees, as well as issues relating to cyber security and ethics on their technology and digital transformation strategies.
Bain & Company report that ESG has rapidly become front-of-mind for regulators, investors, customers, and employees, as it has become a de facto mark of “business quality”.
Furthermore, a recent survey revealed that 65 per cent of M & A executives expect organisations to increase their focus on ESG over the next three years.
Acquisitive corporates are attempting to steal a march on the competition by incorporating ESG into their M & A processes, pursuing specifically related value creation opportunities.
Such opportunities include improved brand association, lower cost of capital, and efficient cost management, all underpinned by sustainability. In overall terms, companies that adopt transparent and socially conscious ESG strategies will become more attractive to potential buyers, as they set themselves up to address the ESG imperatives and appeal to corporates looking boost their performance via acquisition.
At PEM Corporate Finance, we are seeing an increased emphasis on staff retention, digital transformation and ESG across our client base and those business leaders who have developed robust strategies in these areas are well positioned to generate growth in their organisations despite the turbulent economic headwinds on the horizon for 2022 and beyond.
• Call Philip Olagunju on 01223 728222 or E: philip [at] pemcf.com