BDO European Survey - Combatting the crisis with business resilience: How European business leaders are responding to the implications of the global pandemic
Only six months ago, European business leaders were planning to pursue aggressive growth, driven by investments in technology, talent and product innovation. Those priorities have now noticeably changed. A new business reality means that resilience is key and organisations are now rethinking their operating models.
In the half year since BDO published its first European Survey – Ensuring a leadership position in 2025 – the COVID-19 crisis has turned business upside down. BDO felt it was time to reengage with senior European business leaders in order to understand how their views have changed.
BRUSSELS, 9 July 2020: BDO undertook research among 244 senior business leaders based in eight European markets* which sought to find out what immediate steps European leaders have taken to react to the global pandemic – but, more importantly, how their strategic aspirations and operational priorities have changed for the months ahead.
*Belgium, Denmark, France, Germany, Italy, Norway, Spain and the United Kingdom
6 key findings
Our key findings from the research confirm that the impact of COVID-19 has been very tough on European businesses and that government support has been essential in their survival:
The European business leaders that we spoke to told us that:
- The impact of COVID-19 has been very tough - but not universally so
- They believe that the economic outlook will worsen over the next 6 months
- Their growth aspirations have been rebalanced, will shift from aggressive growth to resilience and cost reduction
- The pandemic has highlighted vulnerabilities in their supply chain
- The crisis has prompted a fundamental rethink of their business models and that significant changes are needed
- New ways of working will stay for the long run, at least in part
Dare to be bold
Trond-Morten Lindberg, CEO of BDO’s EMEA region, comments: “What I find most encouraging about our survey results is that, despite the undeniably widespread and severe impact of the crisis, the overall picture is not relentlessly bleak. It is no surprise that most businesses have amended their growth aspirations – but it’s not just about the tough decisions business leaders have had to make to limit economic damage, such as temporary redundancies or even suspending business operations. To me, there is a positive side to taking bold decisions in terms of looking forward: investing in talent and innovation, improving or adapting existing products and services and rethinking and rebuilding one’s supply chains. I think we should be encouraging the bold decisions that result in adopting new technologies, improving efficiency, acquiring a new business or expanding your partnerships. It is the boldest leaders that will survive and succeed, uncovering the positives from their initial reactions.”
Third-party risk: building resilience in the supply chain
Almost 50% of the European business leaders interviewed believe their supply chain to be more vulnerable than they previously thought. Smart sourcing and strong supplier management are two components of a resilient business, but the crisis made these capabilities more challenging. More than one third of businesses say at least one important supplier has ceased trading as a result of the pandemic, and more than 50% will seek to diversify their supply chain by building relationships with new suppliers, so they are ready to react to the unknown.
Trond-Morten Lindberg continues: “At a time when there are so many competing pressures needing management attention, it is very encouraging to see that priorities around sustainability have not changed: it remains an important consideration for nearly 75% of our respondents – which is little short of amazing, given what’s been happening. It will be important to keep climate change issues high on business and government agendas -
but let us not forget either that sustainable growth also means investing in people. Although attracting and retaining talent is currently not the top priority for our business leaders, they should consciously rethink how to engage with and motivate their high performers and new talent, as they will be key for future growth.”
Business models may need an upgrade
The majority of businesses (75%) believe their business continuity plan didn’t anticipate many of the challenges they encountered: business continuity and scenario planning will be a vital tool for leaders to build business resilience going forward. The harsh reality of this crisis gives leaders an opportunity to rethink their current business model: of the 44% of leaders anticipating making some changes to their business models, 9% will be making radical changes to strategy.
A new reality with new ways of working
An immediate response to the crisis saw a large majority of businesses moving their people to homeworking, with a positive impact on employee wellbeing and trust. Our research reveals that this trend is most likely to persist, with 56% of businesses anticipating they will continue to offer a certain degree of homeworking.
The increase in homeworking will have profound consequences for how businesses operate, communicate with their people and foster employee engagement and productivity – and the impact on real estate requirements will be just as significant. The use of city property will inevitably change, but cities will be reinvented. Office space will remain relevant, as people will need a place to collaborate and create, but it is likely to be a significantly different picture as we move into the new reality.
Constructive thinking to realise fast recovery
BDO’s CEO EMEA Trond-Morten Lindberg concludes: “The magnitude of this crisis has taken everyone by surprise. And while the impact has been severe, we have also witnessed amazing agility, creativity and swift decision making. It is now time for business leaders to rethink the future of their business – and to reconfirm their company’s purpose. It’s time for constructive thinking, supported by a clear business model that will help manage business priorities and act as an extra dimension for strategic level consideration. It’s time to stretch themselves as leaders - and above all, for all of us to involve and engage with our younger generations to make sure all the right issues are being dealt with.”
The survey responses led BDO to identify 10 important areas that an organisation’s leadership should rethink to build business resilience for the future: this checklist can be found on page 19 and 20 of the report.
Download the full Report here: