Lessons from Change

Recently a study released by Ernst and Young, looks in detail to how leading global companies have dealt with the recession and are looking ahead. The report compiles conversations that over 500 of the firms senior partners had with clients around the world.

The business environment of today is totally different then it was just a few years ago. There are many problems in the very near future, such as depressed demand, high unemployment, higher taxes to cover government spending, and most likely more aggressive regulation. As many of the corporations were simply just surviving this past year, they are now looking at re-evaluating their business model and optimizing flexibility. Steve Almassy, the Global Vice Chair of Industry for Ernst and Young, also explains in a press release by his firm that "cash is still important but so is planning for the future and optimizing market reach either by geography or by new products and services."

Especially now it will be important for companies to really look at what their core competencies are and focus on those. Another important lesson is to improve efficiency. By either permanantly driving down cost, or adapting more quickly and effectively to a changing market, companies can see a lot longer and brighter future. It was very interesting to see that instead of hiding behind national protectionism, many companies(up to 85%) were either actively or planning on expanding into new geographic markets. With 15% of the Foturne 100 companies now headquartered in the BRIC countries, there is a lot of potential for higher growth in those countries and many emerging markets. If you would like to know more about global market opportunities, please check out our great module on the subject.

The report sets out eight primary performance goals that companies are or should be adopting to prepare for a rebound. Some of these are topics I've already discussed like optimizing your market reach, but there are also others like revitalizing the way you mangage risk. If you'd like to read an in-depth view of all of these, I'd highly advise you to check out this report.