In late May, six leading industry figures sat down to discuss value creation in a new digital era. This virtual roundtable, hosted by Globalization Partners, discusses everything from the digitalisation of the workplace and ESG to groundbreaking innovation within the healthcare space. Get below the key insights from the roundtable or watch along below.

Investors struggle to realise opportunities and are reluctant to change operations and products

‘The opportunities on the surface are psychologically difficult to achieve. So like, when you’re starting a diet. First of all, you should convince yourself that you would like to improve and change. This seems so trivial, but it’s not.’ Tommaso Ascarelli, Partner from EY, commenting on the reluctant attitude towards change from portfolio management. 

Ascarelli continues: ‘Big companies, especially the industrial ones I’ve been growing, are always adjusting the same process and products. They are very reluctant to admit that they can change and do better.‘

To achieve growth within companies, one must go ‘back to the brilliant basics’, says Michael Sutcliff, former CEO of Accenture Digital and current Operating Partner at Advent International. Companies should be looking into developing their own, usually underdeveloped, assets such as HR, Finance, and the basic core functions. The opportunities for growth are being overlooked due to the idea that GP’s and LP’s are not focusing on optimising these core functions. 

The virtual world is key to attracting new talent and achieving growth

The work from home environment that has been forced by the pandemic has shifted the workplace. ‘We didn’t really understand just how portable and invaluable really good talent was. I think what everyone has discovered is that there are definite advantages of being able to get people together to collaborate digitally’, says Michael Sutcliff. With work from home being a viable option, talent can be accessed from anywhere in the world rather than by state or county. However, problems can arise when companies are not optimised to do this and can lose the essential face-to-face interaction that is important for development. 

Pasqualina Cosentino, Senior manager at EY talking about the problems faced by new talent entering companies in the context of the new virtual normal: ‘We should reshape and rethink on how to engage new joiners and in general how to work with our talents. Everyone wants a better understanding of what it means to work together, not only by zoom call or teams. Sometimes I think we may lose new members because they might not feel part of our community when working virtually.’ 

ESG is more than regulatory compliance, investor relations, and company image 

According to Michael Sutcliff, ESG initiatives are most successful when ‘coupled with other things’ and shouldn’t be a ‘drag on making an improvement in their core business.’ If the company can’t function, then it cannot implement ESG. Firms must think about the communities they are a part of and how ESG can help throughout. For example how it can be utilised to improve customer experience, pleasing stakeholders and align with regulations. ESG should be a cohesive effort rather than a tick box.

Sutcliff elaborates: ‘I think the learning curve for companies on ESG is similar to what you see in technology. In the early stages they misunderstand what’s possible, the scope of the question in front of them.’

The discussion around ESG continues, with Sutcliff commenting on how it is often utilised in the wrong way: ‘If you’re in the early stages of discussions with ESG, many of the companies think it’s about regulatory compliance, or it’s about Investor Relations, or it’s about the public persona that the company wants to have reputation only. And, you know, that’s part of the story, but it’s not the important part of the story.’ 

Company owned assets often taken for granted

When looking at value creation and adding value to customers, companies should look at ‘products that you know are not performing well and take a fresh look at those products’, says Micahel Sutcliff. ‘How are the products used and ask, if I made a smart version of the product, would it change the value proposition to the customer?’ Sutcliff adds. 

Companies should be looking to innovate their existing products that will not require massive overhaul of infrastructure to create. These small changes can lead to margins rising with little disruption. 

Michael Sutcliff opines on the concept of a surfboard. He says, ‘So I’m looking out the window. There was a guy out there on a hydrofoil surfboard, where they’ve basically added a battery pack, with a motor on the bottom of it. That small addition allows the person on a surfboard to hold a little controller in their hand. And to make that surfboard able to surf out into the surf, not just back from the surf. The surfboard is now a completely different type of surfboard than it would have been in the past. And because they’ve got an electronic controller and a subscription service, the guy can walk up and down the beach and rent that surfboard to other people.’ 

The panel concludes that the addition of a few components, in some cases costing merely ‘dollars’, can transform an old product into something new that provides value to the customer base. 

Healthcare aided by virtual development acting as an example to other industries  

The new virtual world has changed the working environment. However, we are seeing businesses that had previously been geographically bound, such as healthcare facilities, find a way to maintain their customer retention. 

Micahel Sutcliff comments on this: ‘As a result of the pandemic, there are patients that used to be geographically, you know, co-located with their business environment. They went out to the country, to the beach, they went somewhere, but they’re not where they used to be. And so companies had to really think differently about how to connect to the patients.’

Companies have been utilising these new practices to hang on to existing customers that may migrate, but also to attract new business. Sutcliff discussed the initial impact of this and the future of these healthcare businesses: ‘The number of telehealth visits were up something like 6,000%. If they were going to maintain the revenue cycle, they had to be able to do virtual consultations, virtual visits, and even virtual treatment. And so that fundamentally changed their thinking about what they’re going to do with the business in the future, because they’re no longer concerned about geographical boundaries around their clinics, they’re only thinking about how I serve a much wider patient population.’ 

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