Yet the experience of the past two years has shown growth can’t come at any cost. People want businesses to contribute to society and help overcome our biggest challenges. Put simply, organisations must have a purpose that’s about more than profit. They must think about the long-term, sustained outcomes of everything they do from their deals and investments to their people strategy.
Ken Walsh, UK Deals Leader, PwC, says: “One of the things that's really shifted as a consequence of the pandemic, is business stepping back and saying, ‘actually, we have an obligation to the society we live in’. That then fosters medium-term value creation, rather than just focusing on the short-term outcome.”
To deliver sustained outcomes, organisations need a more complex measure of success that considers other long-term factors that impact their bottom line – this includes ethics, employment practices, responsible supply chain management and climate change.
Striking the right balance between value for our people, stakeholders and wider society is central to our global strategy, The New Equation. We’re making investments that will deliver sustained value, enabling us to help clients solve problems and uncover opportunities.
“We're focusing our investments in the areas where our clients face the most significant challenges and opportunities - Transformation, Deals, Risk & Regulation and ESG - and innovative technologies that enable us to deliver sustained outcomes in those areas."
Marco Amitrano, Head of Clients and Markets at PwC UK
For clients, implementing a coherent ESG strategy is perhaps the most visible way of focusing on long-term value. The sustained benefits to society in terms of social and environmental outcomes are clear, but there are also financial incentives for businesses and their shareholders.
“Think about the shift in capital as investors, big pension funds, insurance companies, sovereign wealth funds are looking to deploy their capital,” says Zubin Randeria, ESG Lead, PwC UK. “Increasingly, they're looking for clean, responsible, well run companies, and we see that's the opportunity, if you can organise your business, so that you can demonstrate how clean it is, then you're going to attract capital.”
In the near term, the UK’s recovery has been partly driven by mergers and acquisitions. Yet even those focused on the immediate goal of striking a deal must remember to keep one eye on the horizon.
Successful M&A needs a long-term strategy. How does the combination of two businesses create opportunities for both efficiency and innovation? Becoming too focused on financial performance or a short-term pay off risks missing out on indicators of how a business will perform over time.
“If you just look at historical financial performance, is that an indication of future success? Look at the culture of the organisation, at the engagement of their employees, how well connected are they with their purpose? What's customer satisfaction like? What's their innovation pipeline? Those are indicators of future success."
Ken Walsh, UK Deals Leader at PwC UK
By maintaining that focus on the long-term, businesses ensure their deals deliver competitive advantage and avoid leaving value on the table.
Delivering on the promise of sustainable growth will need the right combination of skills and technology. As part of The New Equation, we’re upskilling our people and working with universities and schools to build a tech-enabled workforce. This will provide long-term benefits for the UK economy by addressing skills shortages in critical areas, ensuring we have the talent needed to take on systemic challenges such as climate change and reaching net zero.
“We are building an agile skillset and a flexible mindset that means we are all able to work confidently in new ways – in new markets, with new technologies, in new teams – ensuring we can respond quickly to the changing environment and remain trusted and relevant to our clients,” says Laura Hinton, Chief People Officer, PwC UK.
We believe the combination of human ingenuity and powerful technology is what clients need to help reimagine their ways of working and transform into more sustainable, resilient businesses. And by bringing together a detailed understanding of the trends shaping society, deep business and industry expertise, and the ability to deliver a strategy for long-term growth, we can create sustainable value for everyone.
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