Strategy&: Repair, rethink and reconfigure - post-COVID-19
Repair, rethink and reconfigure is a three-step recovery plan for European business leaders post pandemic, according to Strategy& part of PwC.
The consultants expect to see K-shaped recovery developments within certain sectors and economies. “It will be critical for business leaders in Europe to consider how their companies need to repair, rethink and reconfigure their operations, comment Strategy&.
“The ultimate goal must be to emerge stronger from this crisis, in turn becoming a more resilient organisation that will be better prepared for future shocks,” says Strategy& in the report, Navigating the New Reality; Macro overview and recommendations for European business leaders to build resilience in a post-pandemic world.
“COVID-19 has challenged the resilience of the European economy on an unprecedented scale. It seems that European industries are more vulnerable to the pandemic than those in other regions,” said Dr Peter Gassmann, Managing Director Strategy& Europe and Global ESG Leader of PwC.
“We need to build on the openness to innovation and digital transformation we have witnessed this year and reimagine existing business models to make them more resilient.”
Based on the latest data from October 2020, Strategy& expect GDP across the EU to shrink by around 9.1% in 2020, but to recover in 2021 and 2022, with growth rates of 5.5% and 1.2% respectively. In Germany, GDP is expected to shrink by 7% in 2020.
“In light of the current reacceleration of COVID-19 infections across most of Europe, more and more economists and corporate leaders expect to see a somewhat slower recovery for 2021 and 2022, or even longer-lasting recessions in some European countries,” comment Strategy&.
“In light of these differences, we expect a K-shaped recovery, with economies and sectors split between those that return to growth fast and others that endure a more protracted downturn.”
Repair, rethink and reconfigure
The macroeconomic picture revealed in the study, based on analyses from more than 180 research institutes and other academic organisations, shows the extent uncertainty European countries and businesses will face in the future.
“In the face of such disruption, companies may well feel they have to focus exclusively on keeping their operations going in the here and now,” says the report.
“However, most have a critical opportunity to start rethinking and reconfiguring future plans in order to build their resilience and adaptability and emerge stronger from the current crisis. Business leaders must focus on these three strategic goals:
Ensure viability and rebuild strength
Envision the future to manage today
Dramatically redesign future operations
Strategy& emphasis that executives across Europe will also have to navigate four key trends, which have become more relevant in light of COVID-19:
- Dramatic acceleration of digitisation
- Strong impetus to localise operations
- Growing importance of environmental, social and governance goals to foster sustainability
- Increasing adoption of new ways of working that enable flexibility and collaboration