Steering Through Uncertainty: Strategies for Business Resilience
The Crucial Role of ESG, Data, and Long-Term Vision in Navigating Today’s Market Volatility
At the 2024 Climate & Sustainability Leadership Summit, Erik Saito, Senior Vice President and General Manager for EMEA and APAC at Workiva, shares insights on how businesses can navigate a rapidly changing global landscape. In his session, titled "Navigating Business in a Turbulent World," Saito draws from his experience in senior leadership roles across industries to highlight the importance of balancing short-term demands with long-term sustainability, leveraging technology, and aligning with evolving ESG standards.
Challenges in a Rapidly Changing Environment
Saito opens the discussion by addressing the accelerating pace of change that businesses face today. From economic volatility to new regulatory demands, companies are under increasing pressure to adapt quickly. “The pace of change is dramatically accelerating,” he says. “Companies are grappling with macroeconomic impacts, capital market fluctuations, and a rapidly evolving regulatory landscape. This makes it difficult to balance immediate priorities with long-term strategy.”
According to Saito, many executives are struggling to allocate resources effectively amid these challenges. "There’s a real tension between fighting fires in the short term and planning for long-term resilience," he explains. The business environment has become more complex, and leaders are finding it increasingly difficult to manage their near-term objectives while preparing for future uncertainties.
Shifting Focus to Sustainable Value Creation
Saito emphasizes that the concept of value creation has evolved significantly over the years. In his early days as an investment banker, the focus was squarely on maximizing short-term profits through free cash flow. “Back then, value creation was single-dimensional. Companies were focused solely on generating short-term profits, often at the expense of long-term sustainability,” Saito explains.
This short-term focus led many businesses to cut costs, often through operational efficiencies that hurt the environment, employees, and the communities in which they operated. “In those days, companies were borrowing from the future to pay for the present,” he says. "The long-term impacts weren’t considered.”
Today, Saito says, the rise of environmental, social, and governance (ESG) principles is transforming how businesses think about value creation. “What makes me optimistic is how ESG is gaining traction across industries. It’s forcing companies to think about sustainable value creation rather than just short-term gains,” he notes. This broader, more holistic view of value not only helps companies align with regulatory demands but also makes them more competitive in the long run.
Data: The Key to Decision-Making in Uncertainty
Saito repeatedly emphasizes the critical role data plays in helping businesses make informed decisions in times of uncertainty. “You can’t make effective decisions without knowing where you currently stand,” he states. To navigate today’s turbulent environment, businesses must first understand their current operations, which requires collecting and analyzing data from every aspect of their business—from manufacturing to supply chain logistics.
Reflecting on his time in the manufacturing sector, Saito explains how his team needed to overhaul their operations to meet a client’s ESG standards. They gathered data from every production plant, assessed their energy usage, and scrutinized their entire supply chain. “We had to look at everything—right down to the chemicals we used and how our products were transported to market,” he says.
However, gathering data is just the first step. Ensuring the accuracy of that data is equally important, Saito cautions. "Manual data collection is fraught with risk," he explains. “If your data collection is error-prone, your decisions will be flawed.” That’s why Saito advocates for using technology to automate data collection and ensure the information is accurate and reliable.
“Machines can continuously collect data in real-time, which allows for a more accurate and up-to-date picture of your operations,” he explains. This automated approach not only saves time but also ensures that the decisions companies make are based on trustworthy data.
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ESG: A Competitive Imperative
Saito also highlights the growing importance of ESG in today’s business environment. As sustainability becomes a regulatory and market expectation, companies that fail to integrate ESG into their operations risk falling behind. “ESG isn’t just about compliance anymore; it’s about staying competitive,” he says. “Companies that embrace ESG are not only better positioned to meet regulatory requirements but also to create long-term value.”
He shares a story from his time at a manufacturing company, where the team was tasked with meeting the stringent ESG requirements of a major client. This involved examining the entire supply chain and making adjustments to align with the customer’s sustainability goals. “We had to ensure that every step in the process—from the sourcing of raw materials to the transportation of goods—met the required standards,” Saito says.
This approach required significant effort, but Saito views it as a long-term investment. “Complying with ESG standards made us more competitive. It forced us to innovate and improve our processes, which ultimately benefited both our business and our stakeholders.”
Technology and Collaboration: Keys to Building Resilience
Another theme in Saito’s presentation is the need for businesses to leverage technology and foster collaboration to build resilience. He explains that technology plays a vital role in helping businesses meet ESG standards, manage data, and improve decision-making.
Saito also stresses the importance of working with external partners, including governments, NGOs, and industry peers, to drive innovation and address shared challenges. “Creating sustainable value requires collaboration,” he says. “Businesses can’t operate in silos. We need to work together to find solutions that benefit everyone—our shareholders, our employees, and society at large.”
He encourages companies to be proactive in engaging with regulators and policymakers to stay ahead of new legislation and ensure they are well-positioned to meet future demands. “Being proactive with ESG compliance and regulatory engagement will help companies avoid the risks of non-compliance and gain a competitive edge,” Saito advises.
Long-Term Strategy in a Volatile World
As Saito concludes his session, he leaves business leaders with a clear message: focus on creating sustainable value, not just immediate gains. This requires gathering accurate data, analyzing it thoroughly, and making strategic decisions that balance short-term demands with long-term objectives.
“Building a resilient business isn’t about reacting to today’s challenges; it’s about preparing for tomorrow’s,” Saito asserts. “Companies that embrace ESG principles, use technology to gather and analyze data, and collaborate with external partners will be best positioned to navigate the uncertainty ahead.”
In a world where change is the only constant, Saito’s advice offers a practical roadmap for business leaders looking to build resilience and sustainability into their operations. By focusing on long-term value creation and leveraging data and technology, companies can navigate the turbulence of today’s business environment while positioning themselves for future success.
>>> WATCH THE VIDEO OF THE DISCUSSION SESSION HERE: