Trust in Transformation
Climate change, shortage of resources, demographic plate techtonics, digitalisation, urbanisation and restructuring of economic powers are some of the many challenges we face and for which there are no precedents. COVID-19 has accelerated these developments and created new problems. As a result, people’s trust has eroded in institutions that they previously considered to be secure, like companies, authorities and the social system.
Transformation is essential for companies to show their stakeholders – like customers, employers, investors and the public – that they are there to support them and offer value.
Against this backdrop, companies need to be radically redefined and transformed. This is essential to show their stakeholders – such as customers, employers, investors and the public – that they continue to offer support and provide value. This transformation affects numerous areas simultaneously:
The (working) world is shifting onto digital platforms and applications. New technologies are questioning proven business models. COVID-19 has dramatically increased the pace and magnitude of this shift and has triggered a push for digitalisation in many companies. New and innovative players from virtual environments outside the industry are disrupting the markets and blurring the boundaries between sectors. Traditional competitors are being forced to adapt their business models – or face the consequences.
Companies are faced with the challenges that climate change presents. These include to achieve net-zero emissions and to mitigate the physical risks of climate change for their business. Companies that fall short to take the consequences of climate change into account risk a significant loss in value. On the other hand, organisations that focus on and tackle climate-related issues can create significant value – provided they do it in the right way.
The world was not united, even before COVID-19. Concerns about national security, the resilience of countries’ economies and rising levels of unemployment have accelerated the pace of these trends. As a result, regardless of size and industry, companies are redirecting their focus locally or are at least restructuring their production and supply chains.
Society’s trust in governments, companies, supervisory authorities and other major institutions is the lowest it has been in a long time. This drop in confidence in political players and in the existing systems responsible for fighting the coronavirus pandemic, as well as for ensuring future-proof retirement provision can be linked back to a wide-ranging impact of such challenges (cf. Worry Barometer for Switzerland). We’re also seeing growing scepticism in the management of taxation issues, data security and information quality (cf. Edelman Trust Barometer).
With social media, open source and data journalism, information is left open to scrutiny by the public. This means that business decisions quickly become a matter of public interest and are meticulously monitored and commented upon. Striking differences with regards to the access of digital technologies and applications are reinforcing the existing inequalities in the working world. They are also accentuating the ambiguity of the relationship between economy and society.
The pandemic is accelerating these megatrends. Few companies have been fortunate enough to have established themselves in sectors that have remained unscathed by these trends or have more extensive cash reserves. Most countries and companies are battling with a weakening balance sheet and have to make profound changes: win back customers, revamp supply chains, bring back employees and restore the balance sheet.
As strenuous as we may find it to face these challenges, they’re also a forceful driver for innovation and discovery.
As strenuous as we may find it to face these challenges, they are also a forceful driver for innovation and discovery. In this respect, change brings positive momentum, provided that we as decision-makers approach it with entrepreneurial courage and healthy optimism. To do this, we need to firmly commit to transformation and believe that it will lead to our future success. This is the only way to win back trust.
At PwC, we want to invite you to embrace this journey of transformation. We are convinced that you have the necessary strength and persistence to make this change happen. As a manager, we would like to propose five core topics for this year’s agenda. We have summarised each of these topics below supported by findings and recommendations. This will help you to get started or to continue dealing with the addressing individual topics. After all, transformation requires a first step to be taken.
Sustainability is no longer a buzzword but rather a business obligation to create value. Climate change has an impact on your strategy, your role as an employer and your position in the financial world. When it comes to sustainability, we recommend examining and optimising the planning, procurement, implementation, financing and measurement of sustainability criteria. Sustainable actions will make your company more resilient and better equipped for the future.
Your customers expect a consistent and comprehensive experience of analogue and digital technologies. Ecosystems and services are becoming more and more important. Advanced analytics enables the creation of a customised experience, which in return supports customer satisfaction and loyalty. Artificial intelligence can significantly increase your productivity. Companies that engage in customer-focused transformation should link together growth targets, customer experience, data-driven marketing, intelligent pricing, omnichanneling and a consistent service concept.
IT and cybersecurity are under increased pressure during turbulent times, as gaps and opportunities emerge for malicious players. Companies need to protect themselves, their customers’ data and assets against diverse cyber risks, while securing innovation and expanding their existing business to include a digital dimension. Additionally, it is vital to assess new business models for security and data protection. A coherent security strategy and an efficient security process are just as important as employees who are aware of the respective cyber risks and are able to act on their own accord.
Companies considering transforming their finance function should bear in mind the following aspects: Automation and process improvements can considerably lower costs. Today, growth takes place in a rapidly changing market environment. In order to make the right decision quickly, management needs timely, relevant and meaningful information. This will enable a company to enhance its performance and its leading edge in an ultra-competitive environment. In addition, regulatory requirements could hardly be more diverse with shortened deadlines and increased complexity.
New technologies and young generations have turned the working world upside down. But technologies are only as powerful as the people who use them. This is why you need to further invest in the development of your employees’ skills to make sure they remain an integral part of the future working world. We recommend to first assess and prioritise any skills gaps and shortages. On this basis, you can define a suitable upskilling strategy and build a corporate culture. Ultimately, you are responsible for establishing relevant training measures and for continually measuring their financial return.
We want to encourage you to start the new year with confidence. After all, the worst changes are those that we don’t address.
We are only a few days into 2021, however the issues and responsibilities outlined above have most likely been on your agenda for quite some time. But, or maybe even because of this, we want to encourage you to start the new year with confidence. After all, the worst changes are those that we don’t address. If you want to tackle one or more of these important issues together, you can rely on us. What do we offer? Many years of experience in all areas, interdisciplinary approaches, complete solutions and proven technical skills. And most importantly: trust in your and our power to transform.
Thank you for your loyalty and your trust over the past year. We wish you a stimulating and successful start to 2021.
Partner and Assurance Leader, PwC Switzerland
Tel: +41 58 792 81 95
Partner and Advisory Services Leader, PwC Switzerland
Tel: +41 58 792 16 13
CEO, PwC Switzerland
Tel: +41 58 792 44 72
Julie Fitzgerald Wieland
Partner and Leader Finance Transformation and Growth & Markets, PwC Switzerland
Tel: +41 58 792 26 80
Managing Partner; Leader Tax, Legal & HR Services Switzerland, PwC Switzerland
Tel: +41 58 792 44 88
Leiter Familienunternehmen und KMU, Mitglied der Geschäftsleitung, PwC Switzerland
Tel: +41 58 792 63 63