Rebooting your growth strategy: Eurozone companies focus on portfolio and strategic reviews to come out on top post pandemic

I wanted to write a series of blogs to mark passing the one year anniversary of the World Health Organization announcing the Global COVID-19 Pandemic. For most of us this coincided with the start of a year of lockdown and other related restrictions. Impacts on the economy and business, like life in general, has been immense. It is interesting to see how many organizations over the last 12 months have adapted to the crisis and remain strategically resilient. What is their secret? It is likely that the most successful of these companies will have been disciplined and focused around their portfolio transformation.

The latest EY Global Capital Confidence Barometer (CCB) shows that more than three quarters (77%) of Eurozone executives that responded have conducted comprehensive strategy and portfolio reviews during 2020. For 40% of them this was unplanned – a direct response to changing events.

Talking to clients, I see that companies are still trying to understand which pandemic-driven changes are temporary and which are permanent within their own organizations as well as in their wider ecosystems. In other words, what is the ‘new normal’? One thing for sure is the need to invest in technology and digital capabilities - a top priority for companies in the coming months and years. According to the CCB survey, 58% of Eurozone executives plan to increase investment in technology and digital capabilities as a result of their experience. This is corroborated by the recent EY Digital Investment Index that showed digital leaders have been driven to build more resilient and future-looking strategies and better technical execution capabilities, resulting in higher returns on digital investment and hence revenue.

As customers having been forced to change our behaviors and priorities, we have all experienced the different ways that businesses have engaged with us. The customer experience post-pandemic is starting to look very different from the pre-pandemic world. Organizations are investing in reshaping the digital experience offered and are looking for all possible ways to attract, engage and retain customers. More than half of the Eurozone executives (63%) surveyed in the CCB are intending to boost investment in customer engagement to stay ahead of their competitors. What is needed is described by some as an intriguing mix of invisibility, indispensability and intimacy.

The build versus buy conundrum is more relevant now than ever. But, with more than half (52%) of Eurozone respondents planning acquisitions in the next 12 months, it is clear that boosting capabilities and market access via M&A is front of mind for executives wanting to ‘future proof’ their business if that is at all possible, at least for the foreseeable future.

The great reboot coming out of the global pandemic necessitates a strategic agenda firmly focussed on continuing, even accelerating, existing growth plans whilst being prepared enough to capture emerging opportunities. It is clear that the most resilient and successful companies implement their strategic review plans quicker and maintain an always-on portfolio review process.

This is a brave new world for CEOs and their boards, striving to build transformation out of adversity for post pandemic survival, and into whatever the next crisis might be. For those companies who have already fast-tracked their transformation, the outlook can begin to look more positive. For the others - if now is not the time to act, when is?

Resilience in M&A performance and applying lessons learnt from the global financial crisis of 10 years ago is the subject of my next blog.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms. This article contains information in summary form and is therefore not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article.