Organisations must look to responsible growth if they are to rebuild, recover and secure a better future. And speed is of the essence.
We have all seen how much businesses can accomplish when faced with an extreme challenge. COVID-19 ushered in a dizzying pace of change, already dictated by major trends in society, from shifts in consumer behaviour to increasing wealth disparity and declining trust in institutions.
Organisations looked to innovation, agility and resilience to stay relevant to their ‘customers’ - whether consumers, clients, staff, citizens or students. Post-pandemic, many are now applying similar lessons to repair and rebuild balance sheets, irrespective of financial, social, or environmental measurements.
However, cost-cutting, restructuring, and retrenchment are unlikely to yield much benefit as UK Plc services the debt of the health crisis. Growth must be the focus for organisations in the post-pandemic, post-Brexit landscape, and our 24th Annual UK CEO Survey reveals that 84% of UK CEOs are looking to organic growth this year.
But organisational growth for the benefit of shareholders alone can no longer be the target: it needs to be responsible growth for the benefit of stakeholders.
“Leaders should focus on enshrining three powerful drivers of change into the growth culture of their organisation,” argues Colin Light, Strategy& and Customer Led Transformation Leader at PwC UK. “These drivers come from engaging and delighting existing and future customers on their terms; targeting, measuring, and delivering growth across financial, social, and environmental goals; and accelerating innovation and resilience by developing an ecosystem of broader stakeholders.
“Improving customer connections and engagements is ultimately about growing your business or the impact of your organisation. But to do so requires a focus on responsible growth.”
Responsible growth begins with creating deeper, richer and more intimate connections with customers.
More than just giving people what they think they want, organisations should truly understand what matters to their audience, and deliver practical and purposeful change with empathy. By creating this harmony across the many ways they interact with people, it’s possible to create stronger connections and experiences that justify pricing, innovations that live up to the marketing and service that people truly appreciate. But organisations can’t achieve this by changing one touchpoint alone.
Broadly, there are six levers that organisations must pull on if they are to realise responsible growth: experience, marketing, sales, service, pricing and innovation. The right combination will not only unlock relevance today but enable organisations to get ahead of change, remain relevant and support enduring, responsible growth. Many organisations either miss or fail to realise that the correct mix of these levers will deliver the greatest gains: the right levers to pull, and the level at which they need to dial up or down, varies by industry and organisation.
“Organisations need to get the balance right between these levers, responding, recalibrating and readjusting as necessary to meet changing and future priorities. This can only be done through a strategy-led and technology-enabled transformation that has a core focus on influencing the behaviour change of both your customers and employees.”
At the heart of responsible growth lies the premise of “just because you can, doesn’t mean you should”. The so-called “cookie-apocalypse,” for example, offers an opportunity to reinvent digital marketing at a time where marketing is transforming as a capability. While there is a financial imperative to make better use of marketing spend, there is now also a chance to engage with customers on their terms.
This includes making better use of the data that you already have instead of depending on third party data to understand, attract and retain customers. For example, customer spend data used in a GDPR compliant way can create a holistic view of customer purchase patterns to create rich behavioural insights and understanding.
Doing this responsibly means putting data privacy and ethics at the heart of the marketing agenda. But being ethical goes beyond meeting legal obligations. It means making a strategic choice to put the customer first, particularly when technology and innovation are moving at such a pace. Taking a values-driven approach to everything from data monetisation to data sharing and AI simultaneously builds brand trust, loyalty and insight.
A deeper insight into customer behaviours is increasingly critical. And not just direct interactions or transactions:
“It’s not what you see but what you don’t currently see that matters. Once you find those behaviours, there is a new opportunity to create relevant experiences that matter to them.”
One organisation that has benefitted from a better understanding of customer behaviour is footwear and clothing brand, Dr. Martens. “Even before the pandemic, we were committed to reaching consumers by digital-first,” notes CEO Kenny Wilson, in an interview for our 24th Annual CEO Survey. “That was a conscious strategy that started playing out in 2018, and I’m glad it did because when we hit the pandemic we were able to be flexible and adjust the company.”
“We were already shifting resources towards digital,” says Wilson, based on the insight that people buy their first pair of Dr Martens in their teens. “Those consumers are all digital-first.”
Customer-led delight is the starting point for developing any strategy to adapt sales, marketing, customer service, brand management, product pricing and R&D to serve customers better and quicken reaction times to highly dynamic market trends.
Whether servicing customers, consumers or citizens, organisations are increasingly judged by how they do it, with a focus on factors such as ethics, social responsibility and sustainability.
People are beginning to think differently about what they buy and who they buy from. Influenced by lifestyle and behavioural shifts, consumers are making choices based on healthier living, ethical consumerism, greater convenience or stricter budgeting. These changes have accelerated during the pandemic: while 59% of UK consumers have changed diet in the past five years, 29% alone have made changes since March 2020.
Organisations often just consider environmental, social and corporate governance commitments as a purpose statement rather than focusing on how they should affect the six growth levers.
They should consider a responsible balance sheet approach instead: what do they want their organisation or customer-facing brands to say to the rest of the world? For example, with customer and employee experience intrinsically linked - PwC Research data shows 71% of customers say that employees have a direct effect on customer experience - they need to examine their core identity and work hard to overcome any areas of weakness. How do they want to be seen by employees, customers and partners?
“If you don’t know yourself, you won’t know what needs to change to increase agility and deepen connections”.
For Marks & Spencer, for example, that meant a greater focus on wellbeing as well as technology. “We all have to be clear about our mental health and recognise the signs when we or others are struggling,” says CEO Steve Rowe. "As employers, we can provide the right support for that." Alongside a decision to delegate more autonomy to people with specific expertise, it’s a move that has led to record-high levels of employee engagement.
Elsewhere, with increasing concerns about technology replacing jobs, there are challenges around its use to drive better customer engagement through sales and service. A responsible growth approach would be to consider how technology can improve the sales and service experience and efficiency while increasing the impact of the employee experience for the customer.
It’s a challenge that Starling Bank has successfully navigated, combining technology and people to deliver an improved customer and employee experience. By better understanding its markets, and the products and services its customers want, it could see where the opportunities were for innovative new offerings. It now provides these services cost-effectively and at scale, helping employees work more efficiently and provide higher-value services, while automation handles repetitive and lower-value tasks.
As they look to rebuild their balance sheets, organisations are diversifying revenue streams. The education sector, for instance, is focused on transforming the student experience to find new ways to attract and retain UK, EU and international students. With a focus on digitisation, automation, experience and service design, and new marketing and recruitment strategies, institutions are looking to position themselves as the best choice among local and global competitors.
Innovation builds upon core values and awareness of changing customer needs to find smart, efficient ways to achieve transformational goals. Talk of innovation often jumps very quickly to technology. But, in practice, it requires a balance of culture and the use of technology to deliver customer benefits.
“An ability to constantly evolve and improve customer experiences and relationships may require significant cultural change. Organisations must ensure transformation is underpinned by a strong culture, alongside technical innovations, and a wider willingness to consider partnering with others than looking inwards.”
Cultural change is more than creating new ideas and accelerating routes to market. It’s ensuring responsible growth is at the heart of innovation. Organisations should ask themselves: does this solution create a greener outcome? Does it help address inequality or societal tax contributions? Might it disadvantage loyal customers? Does it affect others in the value chain or wider ecosystem, positively and negatively?
Technology must always work in concert with business objectives and overall culture, and never be a ‘quick fix’ or a standalone solution.
“We still see too many ‘point solutions’ to technology innovation - the idea that implementing a particular cloud application will improve efficiency or resilience. But these things often miss the wider enterprise change that can unearth new business models and sources of growth.”
There is no standard model for transformation. What is required to unlock responsible growth, and the steps taken to get there will vary depending on the current position of the organisation and the impact of the pandemic.
Organisations must understand the greater shifts at play, how they will affect customers and continue to change behaviours. This will help them identify how they must adapt - and continue to adapt - to meet people’s needs, as well as the steps needed to deliver this change.
While no two organisations will face the same challenges, all must face up to one stark reality: standing still in today’s economy is tantamount to failure. Too many organisations continue to approach growth from an immediate perspective, such as ‘fix sales’ or ‘reduce marketing spend’. Only when they begin to consider all levers of growth - and the nuanced combination for that organisation - will they unlock the ability to deliver responsible growth.