Global economic uncertainty is underpinning many of the choices being made in Canadian C-suites in 2020. While the economic outlook for Canada in 2020 is stable, now is the time to make sure proper planning is in place to ensure the company is strong against potentially negative global forces and industry disruption Corporate social responsibility, especially as it relates to investor interests, is also a key trend as is ensuring that employees and new hires are armed with the education they need for new technology implementation.
Getting Ready for Disruption & Global Uncertainty
“Disruption” is being used as a positive buzzword for businesses like AirBnB and Uber. However, as most executives and board members know, disruption can have both positive and negative effects on an organization. According to Gartner’s 2019/2020 Top Insights for the C-Suite, 90% of global businesses have experienced a recent turn or disruption. This means that most businesses have experienced a sea change of some kind which require strategic realignment at all levels of the organization.
The report also states that uncertain business conditions exist at a level not seen since the Great Recession. These conditions include:
- Business Transformation (M&A transactions, business model transformation)
- Economic Uncertainty
- Employee Power in the Labour Market
- Capital Inefficiency (Corporate debt new issues, corporate capital inefficiency)
For 2020, an executive strategic plan should include an analysis of how each of these conditions are affecting the company and a plan for dealing with them going forward. This will ultimately prepare the organization for any form of uncertainty by preserving capital, implementing HR strategies to retain and attract key personnel, and getting ahead of trends in the industry which will require fundamental changes to the business model.
Businesses in Canada may be somewhat sheltered from potential global economic uncertainty, according to the Business Development Bank of Canada (BDC). Its chief economist, Pierre Cléroux, predicts a growth rate for the Canadian economy of 1.7% in 2020, but a decline in business investment prospects.
Social Responsibility: Growing Focus on Becoming a Social Enterprise
According to Laurel Hill’s 2019 Trends in Corporate Governance Report, nearly 40% of Canadian shareholder proposals addressed Environmental, Social, & Corporate Governance (ESG) concerns. These concerns were mostly around climate change, corporate social responsibility, and sustainability. Some even crossed over into compensation models.
Shareholders are increasingly demanding better metrics to prove a company’s ESG bona fides, and regulators such as the Canadian Securities Administration (CSA) are responding with additional guidelines such as the Staff Notice of Reporting of Climate Change Related Risks. Canadian asset managers are eager to establish a common definition for ESG and standards that will assuage shareholder concerns.
Companies can respond to the increasing need for ESG initiatives by transitioning away from a “profit above all else” attitude and focus on what good the company is doing for its community and the world, according to Dan Helfrich, Deloitte Consulting LLP’s chairman and CEO.
Along with the shift in perspective, Canadian companies can hire corporate social responsibility consultants to develop a strategic plan for ESG initiatives and metrics which will appeal to investors. Larger corporations may want to consider adding a Corporate Social Responsibility Officer to its executive team to guide ESG efforts.
Tech-Savvy Staff Need to be Hired & Existing Staff Trained
Every company is now a “tech company” in some sense. In its Toronto Summit Industry Report, Refinitiv identified the need to train existing staff on evolving technology and attract new tech talent as one of the top six trends in the Canadian financial services sector for 2020. Refinitiv provides global data for financial markets and infrastructure.
Corporate institutions are losing the new graduates they do get because new hires are not being tasked with jobs that speak to their data science and other skill sets, primarily because their supervisors do not understand how to make use of them, according to Refinitiv.
Canadian financial services make heavy use of artificial intelligence and other fintech solutions, and current employees need to be trained on these skill sets so that their extensive industry knowledge can help the organization’s digital transformation and supervisors can understand the capabilities of their new fintech hires. At the same time, competition for new fintech talent is fierce, and HR needs to develop a plan to attract new fintech recruits.
The start of a new decade is the perfect time to evaluate where your organization is when it comes to the adoption of new technology, adaptation to the new expectation of becoming a social enterprise, and ensuring that your firm is on the leading edge of any disruptive forces in your industry and the economy.