In today’s environment, it appears that the only certainty is uncertainty. The latest EY Capital Confidence Barometer finds executives dealing with numerous interconnected challenges and proactively managing them.
The strategic objective is clear — finding growth. But geopolitical risks, the recasting of trade and tariff rules, zigzagging monetary policy, technology and innovation, as well as evolving regulatory policies, offer obstacles. How best to navigate them?
Go for bespoke, not off-the-shelf: not all issues impact each company in the same way. Executives need to continually unlock and assess the impact of challenges — and the possibility of opportunities — for their business portfolio. Be prepared to recast long-held assumptions and follow a tailor-made path to future growth.
Keep options open: scenario planning and threat analysis enable business leaders to better highlight risks to current operations. Understanding their own ecosystem, their competitors’ ecosystems and the likely path of innovation will help companies make smart choices about what and when to buy and sell to create the portfolio fit for the future.
Buy for tomorrow today: the talent and technology that underpinned growth yesterday is not necessarily best suited to unlock growth tomorrow. With a shortage of technical and digital capabilities, executives need to continually reinvent their talent and technology strategies. In many cases, acquiring will be the fastest way to secure these in-demand assets.
Executives are also navigating new societal rules for corporations. Creating long-term value beneficial to all stakeholder groups is becoming non-negotiable. Companies must be good corporate citizens, delivering value for all stakeholders. Those that find themselves on the wrong side of this argument will find themselves on the wrong side of history. They will lose customers and imperil future growth.
As ever, senior executives walk a fine line. But by understanding how prevailing uncertainties impact their business, building optionality into their strategy and buying the next wave of capabilities, they can plot a course to create long-term value for their company, stakeholders and society more broadly.
The full report can be accessed here.
Steve Krouskos, EY Global Vice Chair – Transaction Advisory Services
For any law related queries:
Jean-Christophe Sabourin, Global Transaction Law Leader