The pandemic has changed the business landscape irreversibly. In this new reality, transformation, human agility and creativity are imperative for turning crisis into opportunity.
How will business leaders navigate this new business landscape and the challenges and opportunities ahead? BDO’s research reveals that growth remains an important focus, but that the routes to growth are likely to be very different compared to only a few months ago.
BRUSSELS, 24 November 2020: Ten crucial areas of focus have emerged from our survey. We identified the practical changes business leaders have been and are making across each of these ten business fundamentals and ask practical questions that help business leaders assess how well prepared they are and what is next for their business. The 10 fundamentals and important questions can be found on page 40 and 41 of the report (see link below).
BDO carried out research among 320 senior executives across 36 territories within North America, Latin America and the Caribbean. Respondents span a range of industry sectors. This research was carried out during late September and throughout October 2020 as many countries entered a second wave of the pandemic.
Taking the pulse of the Americas region including the Caribbean:
The business leaders we spoke to told us that:
- 44% of businesses describe the impact of the crisis as severe or major.
- The business climate is expected to remain uncertain, but within North America senior executives are most optimistic.
- 72% of business leaders say improving productivity and management processes will become vital.
- 63% agree they will need to make significant changes to their business model to build resilience.
- 72% of all executives plan to increase their investments in technology.
- Supporting the workforce is considered essential. Leaders plan to invest in staff training and development. 35% consider redeploying staff to new roles to avoid layoffs.
- Though 2/3 of all senior executives interviewed remain optimistic, nervousness remains. Agility and scenario planning are crucial to thrive in the new reality.
BDO’s CEO of the Americas region, Alber Lopez, comments: “What I find most encouraging about our survey results is that, in spite of the severity of the crisis, the overall picture is not relentlessly bleak.
Notwithstanding a significant amount of disruption, organizations in the Americas have used the last six months to refocus their attention on business fundamentals to better prepare themselves and their business for future success. In the short term, times will be challenging, but most businesses and industries show cautious optimism going into 2021. A sentiment that contrasts markedly with the views of the European business leaders we interviewed during June 2020.”
Dare to be bold
The immediate response to the global health crisis has forced executives in the region to make bold decisions to limit the negative impacts for their businesses. Our research finds that one in three businesses (33%) reduced salaries or conducted layoffs. Three in ten (30%) suspended business operations temporarily.
Their other bold decisions include 47% renegotiating contracts with suppliers, 35% renegotiating contract with customers, and 31% renegotiating financing options.
A switch to working from home has been widely adopted by businesses across the region and has now become the norm for many industries. This is particularly true within Latin America, where 83% of businesses say they have switched to working from home. This switch presented a number of challenges that executives have had to overcome, from the difficulties of supervising and engaging a remote workforce to navigating local labor regulations.
Albert Lopez continues: “Our report highlights bold decisions taken by many businesses to ensure their future survival. To achieve their aims for the coming 12 months, business leaders are focusing their investments on improving productivity, adopting new technology and product innovation. The new ways of working are here to stay. As such, the need to rethink your purpose, strategy and business model is clear.”
Rethink to thrive
Our survey also reveals potential blind spots that need careful consideration. Among those surveyed, 72% say a significant proportion of their total sales originate from their domestic market, yet the need to tap into international opportunities is more crucial than ever espically for the islands of the Caribbean for which tourism is a major source of revnue,
And though organizations are right to focus on financial and HR resilience, the survey reveals they are taking their attention away from cyber security, supply chain and ESG resilience.
The pandemic also offers opportunities. A fundamental rethink of strategy will be required to realize long-term growth ambitions. BDO supports its clients with a global Rethink framework. This 3-stage model encourages a broad rethink around original business models and commercial assumptions. It can be used to manage business priorities, address issues and leverage thinking. It acts as an extra dimension for strategic level consideration and discussion, regardless of where in the cycle an organization sits, or the measures already taken.
BDO’s CEO America Albert Lopez concludes: “At this time of change and uncertainty, I trust that this report will provide practical insights about how organizations in the Americas are building business resilience to mitigate the impact of the pandemic and turn crisis into opportunity. Despite the disruption of COVID-19, I have witnessed amazing agility in the region, with strong leadership, unbelievable strength, combativeness and creativity and a willingness to embrace the new reality.”
Download the full report here