A calm before the storm?
If 2020 showed anything, it’s that outdated business processes are vulnerable and the future is uncertain. But that’s not all. Through our study, we have realized that companies which came out of the crisis unscathed share common characteristics. They were — and are — focused on innovation and demonstrated enough operational agility to push on despite the crisis.
From our sample, Swiss companies Syngenta, Zehnder, Lonzo, and VAT managed to do just that, and that aforementioned strength to innovate lives on and will continue to live on in the post-pandemic world. But for many other companies, changes that COVID triggered should be embedded enduringly in company culture and in all activities.
Again, based on our sample, the medical technology industry, consumer goods manufacturers, and construction companies were the best performers – in terms of growth and profit – in the pre-pandemic year of 2019. That said, turnover had somewhat dwindled across all industries compared with previous years.
Examining the Swiss macroeconomy
It was expected to shrink by 3.3 percent in 2020. However, Switzerland’s GDP will not suffer as once thought, especially given other European countries’ forecasts. The average EU state’s GDP is expected to decline by more than 7 percent in 2020: in Germany the predicted decline is 5.5 percent, and in Italy and France – more than 9 percent. This shows that despite the repeat lockdowns and contact restrictions, the Swiss economy is showing its traditional resilience.
The ultimate game changer
Overcoming the crisis is one thing: But it’s just one stepping stone on the path to a secure post-pandemic future. One thing is certain. COVID-19 will prove to be an important catalyst for change. The following trends, which gathered steam during the crisis, should remain in focus.
Fight or flight? How Swiss companies responded
Drawing from over 200 Swiss and other European companies’ financial data for 2020, we have discovered that Swiss companies have responded comparatively well to the crisis. They increased their return on equity and profit. But, naturally, things look different sector by sector.
For example, consumer goods and industrial equipment manufacturers alike improved performance values in spite of the crisis, whereas the retail sector lost ground compared to other European economies. The fact that retail was in a weakened position before the crisis didn’t help matters. A lack of digital scaling and unwillingness to develop ecommerce solutions is also to blame here.
Nevertheless, it seems as though many companies have recognized the need to catch up and initiatives are being rolled out to drive the digital transformation of the Swiss retail sector. The graphic below puts things into perspective.
Into the new normal
The world has changed significantly, and lessons learned during 2020 and the first half of 2021 should provide a foundation for sustainable growth in years to come. A strong focus on innovation and operational and strategic agility are such prerequisites, as they show that it is possible to capture new markets and thrive – even in a downturn.
We have gathered valued requirements for future success. Developing a digital core brings innovative models to life through cloud adoption, forming the digital heartbeat of your company. By combining the cloud with other digital technologies such as AI, analytics and IoT, it is also possible to make far-reaching decisions in radically less time and implement measures correspondingly faster. This greatly increases the operational speed and strategic agility of any company.
With a New Digital Core
The New Digital Core is the true prerequisite to unlock hidden corporate value and deliver new value propositions. It is in essence a digital representation of a company in the cloud: connecting applications, services, and data end to end. In that way, automated and intelligent processes can be developed to create a common thread in all business areas. Partners and customers can be integrated into the New Digital Core as well, bringing companies closer to their customers and creating long-term loyalty. A holistic transformation of both processes and principles holds the key to new forms of internal collaboration and of working together in business ecosystems.
The graphic below shows which approaches will be of most importance in the post-pandemic world and reveals how a New Digital Core contains all the necessary ingredients for long-lasting success.