COVID-19 means more businesses are now strategically planning for the future: Research
New research shows that the process of identifying, planning for and dealing with the challenges of the pandemic could hold a silver lining for businesses.
For countries beginning to emerge from the COVID-19 pandemic, the lingering economic, social and health related impacts remain a significant challenge.
But for middle-market businesses, the process of identifying, planning for and dealing with those challenges could hold a silver lining.
As businesses scrambled to adjust to lockdowns in 2020, with economies stalling and amid massive uncertainty, the pandemic triggered a wave of strategic planning that could pay dividends for years.
It’s a message that has emerged in our annual Pitcher Partners Business Radar: Understanding the businesses that drive Australia’s economy, which has found the pandemic accelerated strategic planning among middle-market businesses.
Not only did they consider risks and opportunities at different time horizons, but they were prepared to assess and respond to a broader set of threats.
Businesses were more willing to look beyond their operations at macro-environmental shifts and consider the potential impact these megatrends could have on business performance, according to our research.
This marks a change from previous strategic planning which tended to be narrow in scope.
The bigger picture
The research, conducted in partnership with strategic growth consultancy Forethought canvassed more than 400 business decision-makers and owners found one in three plans made pre-pandemic did not try to account for macro-environmental shifts.
Post-pandemic, that has fallen to one in five, while a third of businesses say they are now strongly focused on these bigger issues.
As crises often do, the events of the past 18 months also highlighted the risk to businesses of not having strategic planning in place.
When compared to those who have even a short to mid-term plan, businesses that report making decisions in an ad-hoc manner are more likely to have seen their revenue fall in the past year.
They also find it more difficult to maintain customer engagement and have experienced technology challenges.
When it comes to employees, ad-hoc planners report higher levels of staff dissatisfaction and even find themselves paying more for business equipment.
A timely wake-up call
For most businesses, though, the pandemic has focused the mind.
Now, just 4% of businesses surveyed say they have no strategic plan in place at all, an improvement on the previous Business Radar.
More than half report developing strategic plans that span at least the next one to five years, and one in six say their plans stretch five years or more into the future.
Perhaps the clearest illustration of the effects of the pandemic-driven planning push is that 56% of those surveyed believe the pandemic had been a good thing for their business.
A remarkable 40% describe it as positive overall, and 16% as highly positive.
For states still dealing with the latest round of lockdowns, border closures and restrictions, this statistic will seem jarring.
We are not used to thinking of COVID-19 as a positive for business, but the pandemic provided a timely wake-up call for many.
Moreover, those positive impacts will continue to reverberate.
An overwhelming majority of those surveyed say they believe COVID-19 has improved their business resilience, with 70% indicating it has helped them to prepare for other major changes in their business.
Many told us the past 18 months has delivered new opportunities, with improved flexibility, reduced costs and better staff work/life balance.
What is less clear is whether strategic planning formed in the crucible of the crisis will be effective in the long term.
Despite being pushed by circumstances to embrace strategic planning like never before, less than half of middle-market businesses say they are ‘very confident’ in their strategic planning and decision making.
Many report still grappling with how best to go about planning for an uncertain future, and one in five middle market businesses concede that their strategic decisions are still made on an ad-hoc basis.
For these businesses, the constant pace of change is the biggest barrier to introducing more discipline around the planning process.
There is also a sense that some businesses have tried to plan in isolation, only to find this has not worked, with nearly a quarter citing a lack of professional advice as a major hurdle to better strategy.
In fact, one in three said they would engage more in strategic planning if they had access to the right professional advice.
Given the protracted path out of the pandemic, and the challenges that still lie ahead, this should be an area for middle-market businesses to address as a priority.
