Legal development

New year new disruptors Three things every business needs to stay competitive in 2022

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    Business leaders have hit the ground running in what is predicted to be another volatile year. While those who survived an economically precarious two years may be hoping for stable ground, those who thrived know instability is ripe with growth opportunity - and new players. Not only embracing, but catalysing change is integral to staying competitive in the 2022 candidate-driven landscape. But change alone won’t guarantee enduring growth. Here are three key components future-thinking leaders can’t overlook this year.

    1. Adequate social and governance practises

    Last year’s COP26 Summit put the spotlight on big businesses to set more ambitious targets to curb emissions. Whilst environment - the ‘E’ of ESG - has been the focus for business leaders to date, social - the ‘S’ - is coming into the light, and bringing governance with it.

    Social has historically been a missing piece of the ESG puzzle with ROI (and what even constitutes an acceptable investment) a grey area. But in the candidate-driven wake of COVID-19, where brand purpose increasingly drives buying behaviour and companies are paying 20% premiums for new hires, social practises and the experience they offer have been pulled into focus. Adequate compensation, development opportunities and demonstrated flexibility, diversity and equity policies are the baseline. This year will see the continuation of brands taking stands in the footsteps of Nike, Tommy Hilfiger and Neil Young - and solidify the expectation of corporations to follow suit. But beware: A tokenistic social stance will topple quickly. Identifying and implementing an impactful policy is intricate; and requires the right purpose and careful planning.

    The ESG ecosystem is inextricably linked, with each element interdependent. As the emphasis on social accountability has increased, the pressure spills onto governance. The ‘G’ is the tie that binds the ESG framework,and is critical to organisational growth, as risks and opportunities will only increase as social, political and cultural attitudes evolve. To stay competitive in the face of expanding income inequality and global diversity, top level executives must be accountable to all stakeholders and transparent on their diversity policies, compensation, financial reporting and contributions to the community . Leaders: the spotlight is on you, more than ever. And it’s not forgiving.

    2. Purpose-driven strategies that are actionable (not just PR-able)

    Can you articulate your company’s purpose? Can you demonstrate how it’s actually being implemented, and the positive difference it is creating? If ethics aren’t enough to sway you, the financial case for purpose is inarguable. Global talent research indicates that top performing talent are 3x more likely to work for a company with a strong sense of purpose, while 40% of consumers are purpose-driven and make buying decisions based on their values. Those consumers will look into who their brands do business with. Yet a staggering amount of organisations are falling short; with either inadequate policies, or - perhaps worse - promises they aren’t living up to. Amidst the rapid rise of ESG-oriented investing, The Great Resignation, and acceleration of the climate crisis, 2022 is set to be a year of reckoning for organisational purpose. Corporate leaders must forge further than net zero and into net positive - implementing actionable strategies that re-energise society and restore the environment. Again: tokenism will topple.

    To stay competitive, purpose must be at the core of your strategy - not an afterthought transparently tacked on for PR.

    3. Innovations that integrate the need for transformation beyond tech

    While innovation is often synonymous with tech, it is not exclusive to it. Global research indicates that while 84% of executives consider innovation to be important to growth strategy, only 6% are satisfied with innovation performance. Staying competitive requires ideas beyond AI. Fast-growth companies are evolving past the tech-first mindset, and looking beyond their industries to expansion opportunities that sit outside the box. As technology enhances the performance and efficiency of businesses, and automates 65% of managerial tasks, future-focused organisations need to invest resources into the human traits that AI can’t replicate; like cultivating connection, empathy, relationship-building and authenticity.

    Smart workplaces will take a holistic approach to integrated innovation and embrace possibilities outside of traditional business models. Rather than wasting resources trying to keep up with an impractical tech update, they will identify and address other productivity drains - such as unnecessary meetings or excessive billable hours - and incorporate tech that streamlines their team’s natural way of working. With hybrid and remote working models here to stay, the need for efficient communication systems, effective workflow strategies and productive manager-employee relationships is more prevalent than ever. Digital advancements are vital, but the need for innovation pervades well beyond the tech sphere.

    Competitive advantage into 2022 and beyond calls for continuous and disruptive improvement. Adapting to change will be too late. To achieve sustained growth and maintain top talent, corporations must proactively maintain a balanced ESG ecosystem, forge past the net zero frontier and make purpose practical. Putting integrated innovation at the helm of forward-thinking strategies will revolutionise workflow efficiencies, business performance and people and client experiences. With uncertainty, comes opportunity. Are you poised to act on it?

    Authors: Jamie Ng, Partner

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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