Beyond 2021

Using the crisis as a catalyst for change

The year 2021 saw unprecedented change, with some industries grinding to a halt and the structure of others radically altered. Many companies that have weathered the storm appear to be making a promising recovery.

A more careful look, however, reveals a different story. Our analysis suggests that while many companies in the Asia Pacific, Latin America, Middle East and South Africa kept growing their market capitalization all through the pandemic, revenue growth has lagged behind.

But a select few—27 companies that we studied closely to understand their change actions—are bouncing forward, not merely back to their pre-crisis positions. What are these companies doing differently? Read our report to see the prime reasons behind the growth-speed disparity—and what leading companies are doing to sustain their lead well beyond 2021.

Revenue and market capitalization growth trajectories began to diverge from 2017 to 2019. The pandemic sharply accelerated the divergence, driving market capitalization growth nearly four times faster than revenue growth.

In 10 of 15 industries, companies are thriving more on investor confidence than on revenue growth. Can they close the widening gap between market cap and revenue? Some companies predicted this issue early on and took steps in the right direction.

We studied 27 companies that successfully navigated the growth-speed challenge to see what they are doing differently. At first glance, they seemed to be walking a known path—tightening cost structures, exploring new ways of operating, focusing on market opportunities and innovating to break new ground. But what truly set them apart was their differentiated change agenda.

Bounce forward with four change priorities

Leading companies are focusing on change that prioritizes environmental and social impact, employee empowerment, customer wellbeing and new business foundations. In short, a change that’s Responsible, Intelligent, Customized and Expandable (R I C E).

Leaders are using the twelve R I C E change interventions to smartly carve out their place in the post-pandemic world. They are committed to sustainable, transparent and ethical practices; they are investing in smart teaming, intelligent innovation, artificial intelligence at scale; they are investing in reliable digital commerce, as well as offering secure experiences and personalized solutions; and they are creating new businesses using new foundations (technology, assets, partnerships).

On searching media publications for mentions of the 12 change interventions for both leaders and bottom performers, an interesting insight came up:

Be bold in embracing the future

The pandemic has fundamentally altered the conditions for success. Rather than retreating to familiar pre-pandemic strategies, companies need to boldly execute on a differentiated change agenda if they want to lead in 2021 and beyond.