How are UK and European business leaders responding to market disruption in order to gain competitive advantage?
Business across Europe find themselves operating in a difficult macro-economic landscape. Over the last 5 years, the European economy has grown on average less than 2% per year. Medium-term outlook is for a modest GDP growth of just 1.4% per year in 2020 and 2021.
But how will UK businesses continue to thrive and grow? BDO’s latest research reveals that businesses across Europe still set an ambitious growth agenda, with increased focus on transformation.
BDO undertook research among 215 business leaders based in seven European markets*, including the UK, which reveals that businesses across the region have significant growth plans, despite the challenges posed by the external operating environment.
Our 5 key findings
The 5 key findings confirm that European businesses should be prepared for disruption, which is now a part of life.
BDO Tax Partner, Stuart Lisle, comments: “Business leaders are expected to navigate new challenges, such as emerging technologies, but also the future of work agenda, environmental issues and sustainability. With the depletion of natural resources, unconstrained year-on-year economic growth no longer seems as feasible as previously assumed. And the younger generation - tomorrow’s new talent – in particular, expect to see the sustainability agenda elevated to the board room.”
3 strategic investment areas to unlock growth: talent, technology and innovation
Business leaders are aware of the need to retain a dynamic sense of entrepreneurialism and to respond quickly to new market opportunities. As such, the way businesses aspire to grow has revolutionised, with talent, technology and product innovation being the three priority areas of investment and transformation that these leaders say will drive their future success.
Stuart continues: “If talent is a priority area of investment, it is imperative that we clearly understand all generational differences and what the new generation expects from their employers, making every employee, regardless of their age, feel engaged. Employees seek purpose and meaning and the younger generation in particular will want to see gains in efficiency through digitalisation and technology. Equally, they will expect those gains to be invested in improved work-life balance, in sustainability and climate measures and in ensuring equality.”
Opportunities for transformational change
To execute their ambitious plans for the next five years, the business leaders participating in the survey anticipate making transformational changes to their business processes and internal functions. 54% said that transformational change will be needed within their IT and technology functions. The areas of significant change align with their business priorities, such as achieving growth through digitisation and innovating their product and service offerings. UK and European business leaders recognise that business as usual will no longer be the winning strategy to achieve their aggressive growth aspirations. Instead, real change is needed to rethink relations with customers, employers and other external partners.
Dare to be bold
Stuart Lisle concludes: “To address the many challenges ahead, leaders must ask bold questions and be prepared to create a culture that encourages others to ask similarly bold questions both inside and outside the board room.
“He or she must consciously activate different stakeholder groups. They have to approach the younger generation and listen to their unbiased thoughts and suggestions. Taking note of the fresh ideas from these first true digital natives will undoubtedly lead to interesting debates and bring real added value to the table.”
The survey responses led BDO to identify a checklist of 10 questions that business leaders should review and discuss, to set their companies on the right path to market leadership. These 10 important questions can be found on page 21 of the report.
Download the full report
* European markets surveyed: Belgium, Denmark, Germany, Italy, Norway, Spain and the United Kingdom