Swiss companies are financially strong – but is that enough?

Let’s start this article with some good news: Swiss companies have maneuvered the stormy seas of the past couple of years surprisingly well. Our new Swiss Top500 report , an Accenture analysis of the financial results of the 67 largest Swiss firms for 2022 (excluding the financial services sector and resources firms), shows that they outperformed their counterparts in the US and Europe on most dimensions such as growth, profit margin and liquidity.??

Using the Altman Z score to evaluate their financial stability, we found that Swiss companies scored 1.2 times higher than US enterprises and 1.7 times higher than their European peers. In other words, financial stability remains a hallmark of Swiss enterprises. But is that enough???

“Financial stability remains a hallmark of Swiss enterprises – but is that enough?”?

If we’re being honest, not quite. In today’s polycrisis world, a great financial performance can only be one aspect of success. That’s why, for the Swiss Top500 report, we dug deeper and identified five additional dimensions that are crucial to a company’s success and resilience in an era of constant change. They include technology, talent, sustainability, customer, and finally, supply chain & operations risk.??

So, how well are Swiss companies doing on these other dimensions???

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Technology not seen as a game changer?

Swiss enterprises are financially very resilient, but the big question is: Are they reinvesting their profits in a smart way to future-proof their business? Obviously, one way to answer this question is to look at how companies invest in their own digital transformation to build the foundation for tomorrow’s success.??

And here’s what worries me: Compared to their European and US peers, Swiss companies appear to be restrictive in their investment into AI, cloud computing and data technology. Our analysis shows that they only reinvest 13% of revenue into digital transformation initiatives versus 20% in the US.??

“Are Swiss companies reinvesting their profits in a smart way to future-proof their business?”?

When we looked at these results more closely, we found that many Swiss businesses still view technology as a means to improve the efficiency of their current operations. They follow the old way of investing in technology where they identify which parts of their business require improvement and then go on to find the tech solutions to solve that problem.

In other words: They see technology as a tool to improve today’s business – but they’re not seeing it as a way to reinvent their business.

This strategy will not hold up in the years to come. In the US, in contrast, more companies have understood that technology will be at the core of tomorrow’s operations. Making technology the heart of their operations will be the trademark of the world’s successful companies of the future. We do indeed need a mindset change among Swiss companies if we want to stay competitive.??

Supply chain risks as the elephant in the room?

The pandemic and its effects as well as the war in Ukraine have bruised supply chains from Europe to the US and Asia. No globally operating company was really prepared for that, but Swiss companies were particularly vulnerable, as our analysis showed.

That’s because they export most of the goods they produce; and their supply chain network is on average longer and more complex. These are things we can’t really do anything about given our small domestic market and the lack of natural resources.?

“Swiss companies are particularly vulnerable to supply chain risks”

What Swiss companies can do, however, is to make their supply chains more resilient and identify their biggest risks early on to start working on alternatives. This includes rethinking the level of localization and fragmentation of supply chain processes, logistics and organization. This can and needs to be improved. For things to continue running smoothly in times of crisis, collaboration and the level of data sharing must be increased dramatically.?

Business like never before?

I guess we all agree that the world in which Swiss companies and their peers operate has dramatically changed. My colleague Jean-Marc Ollagnier, CEO Europe at Accenture, was spot on when he described the world post-Covid: “It’s not business as usual – it’s business like never before”.?

The question we have to ask ourselves is whether Swiss companies are prepared for this new age of business. Their starting position looks great – but there is most certainly more work to be done. Financial stability alone is not enough; but investing profits the right way and addressing their supply chain risks will help Swiss firms to future-proof their businesses.? ?

Read our Swiss Top500 report

If you’d like to learn more about the strengths of Swiss companies and what they need to focus on in the future, head to our website and read the full Swiss Top500 report .

I can already reveal that we’re planning to launch a second release, which is scheduled to drop this summer. Here, we will dive even deeper in the six dimensions of success. Watch this space!??