To sustain growth, companies will need to rethink their broader strategy and adjust expenses accordingly. With this in mind, determining corporate priorities and reducing unproductive expenses will be key. Understanding what is truly important to achieving critical short- and long-term objectives will help to uncover ‘low hanging fruit’ cost reduction opportunities.

Consumers will have limited excess cash and therefore may become less likely to make non-discretionary purchases. Be intentional and creative with pricing strategies in a way that provides a benefit to overall margin and enhances consumer willingness to buy. Leveraging analytical tools to set prices on a day-to-day basis in response to changing market dynamics is essential to maintain competitive edge and limit risks to margin.

Companies need to rethink their broader strategy to reduce financing costs while maintaining growth. One way they can do this is by changing capital structure from debt financing (which carries higher interest payments) to equity financing to fuel growth. Companies may also be faced with difficulties satisfying the terms of their existing debt obligations. In this case, organizations may seek out alternative lenders with looser covenant structures for short-term ‘breathing room’.

Companies must be wary of deal value for acquisitions and other investments that are affected by rising interest rates and higher cost of capital. Valuations will decrease, which means maintaining a healthy balance sheet and pivoting corporate strategies to adapt to market changes—particularly with respect to price, consumer behavior, and international externalities—will be essential for maximizing deal value.

Passing on inflated prices to consumers may significantly reduce volumes. With inflation expected to subside, securing decreased cost of goods and holding the line on prices may create an advantage over competitors. Assessing price elasticity and market pricing is therefore key to inform customer pricing strategies.

With many commodity prices falling back to near-normal (or new normal) levels, there may be opportunities to negotiate cheaper prices for supply. Leveraging analytics and market information can be used to evaluate current supply costs and identify strategies to get ahead of the market and optimize profits.

Businesses should constantly evaluate product mix to identify and support high performance SKUs while reducing low performance SKUs. Using an 80/20 approach, organizations can achieve strategic focus and simplify operations to enhance their bottom line.

During uncertain times, businesses must adapt and limit the financial risks associated with their supply chains. Although stockpiling may secure inventory, it is a costly strategy that may not be feasible during an economic downturn. Businesses should strive to stay lean in their inventory and effectively anticipate demand using analytical tools to optimize working capital and mitigate financial risks.

It is crucial to understand where, when, and how each external disruption is occurring and determine the price effect and distribution constraints at stake. Regularly monitoring these events and leveraging analytical tools to assess the financial impacts will enable businesses to oversee supply chain pain points more effectively and will help companies be more resilient to these challenges.

Optimizing process flow starts by assessing current state efficiencies—all the way from production processes to data entry. Ask key questions such as, are there redundancies in current processes? How much time and labour can automation save? How will digitization improve performance? Automation and AI can expedite processes and eliminate manual and redundant tasks that require human intervention with higher likelihood of errors. 

Developing a digital roadmap is essential for a smooth and effective transition to attain maximum value. Digital opportunities should be assessed as an investment portfolio. Understanding the current market landscape and prioritizing opportunities based on level of investment, increase in revenue, customer experience, and employee experience will allow organizations to succeed in the implementation of their digital roadmap.

Executive reporting can often be a burdensome process, requiring time-consuming data aggregation and manual intervention. Automating systems and developing analytical tools can provide business leaders with the insights they need to monitor performance and identify any issues that require attention in a timely manner.

As consumer preferences change, external data sources can be leveraged to monitor shifts in economic conditions, spending, and consumption trends. Leveraging analytics to effectively translate this data into meaningful insights and guide strategic decisions can yield positive impacts on business performance.

Adopting new technologies can increase your productivity but it also changes your threat profile and how adversaries will target your business. Implementing control points, considering people processes and technology, as well as building and testing cyber response plans, helps your team move quickly in the event of an attack. Begin by determining where your sensitive information is located, identify who has access to information, ensure sensitive data is encrypted, and document information flows so that adequate controls can be enabled to prevent data loss. Testing risk mitigation strategies before a threat occurs ensures these strategies are working as expected.

When introducing new technology, or refining existing technology, it is important to develop a cybersecurity strategy that is monitored on an ongoing basis. Any technology implementation should include a well-structured mitigation plan in the event of a cyber attack. Developing a breach response playbook that addresses which steps to take and which vendor to engage will build resilience and limit the damage of the attack.

Consider pre-divestiture performance enhancement opportunities to gain a preferable valuation and purchase price. While value is created throughout the organization’s lifespan, current market value is determined by investor sentiment on medium and long-term value drivers of the business and industry. Identifying value drivers that will increase the value of the business in the short, medium, and long-term and aligning existing and new strategic initiatives are therefore key to accelerate value creation in the business.

At a time when valuations are nominally low, identifying hidden value, key operational risks, and quantifying EBITDA as well as cash flow improvement opportunities will enable optimal deal value. Recognizing KPIs and metrics, people and organization, revenue engine, cost drivers, operating efficiencies, working capital, and integration synergies will strengthen valuation effectiveness.

Talent acquisition is costly, which is why a proactive approach to improving employee retention will be key. Increases in compensation may seem like the best channel to satisfy top talent, however, it’s becoming more common for employees to value culture, work-life-balance, and non-monetary benefits above all else. Enhancing HR strategy by implementing feedback sessions, team building exercises, and incentive plans is extremely important for retaining top talent in the current economic landscape.

With rising interest rates, inflation, and employee wages, many organizations will need to start thinking of ways to optimize costs. From a workforce management standpoint, businesses can assess which job functions require human labour, which roles can be automated, and which job functions are not essential to the organization. Once these factors are identified, companies can begin maximizing employee utilization and productivity by rearranging job functions, leveraging technology, and cutting unnecessary costs.

Businesses should continue investing in ESG initiatives to improve top-line and bottom-line growth, make a positive impact on society, and reduce risk. Businesses should be constantly looking to integrate ESG into their strategy and operations while being able to tell the complete story to customers.

As we enter a period in which ESG is becoming a top priority for society, new governmental regulations may pose a risk to business models and operations. To mitigate this risk, organizations need to anticipate changes on an ongoing basis and put in place the necessary plans to address issues.

ESG initiatives have proven to raise deal value. When pursuing an acquisition, it is becoming increasingly important to evaluate potential risks and opportunities tied to a target company’s ESG impact. If not properly assessed pre-close, ESG risks can erode returns.