Business Performance & Resilience

Regulatory requirements are increasing: ESG reporting will be mandatory for companies in future. A distinction must be made between natural disasters, which can, for example, directly lead to supply chain disruptions (droughts, floods, fires), and consequential effects, which include short-term increases in raw material or procurement costs. If the goals of the Paris Climate Agreement - including the 1.5-degree target - can be stringently pursued, corporate resilience and the trust of all shareholders and stakeholders can be increased - while at the same time reducing costs in the long term.

The rapid pace of digital transformation is making planning less reliable. From ensuring data security to market upheavals caused by innovations on other continents: Technological change leads to complex tasks for companies. At the same time, progress is creating new growth impulses that enable competitive advantages. Those who utilise pioneering applications at an early stage can significantly increase efficiency and tap into new markets and additional sources of income.

Social media enables new forms of communication, but has also proven to be a driver of social division. The spread of so-called fake news is not only increasing due to the rapid obscuring of sources on the internet. There is less constructive discourse due to personalised digital filter bubbles. This is a complex situation for companies. In times of a polarised public, they have the option of taking a stance - even on controversial topics - and thus acting and communicating in a value-oriented manner. This commitment can become a decisive differentiating factor. Diversity in your own workforce also promotes a contemporary corporate culture and can help with employee recruitment, among other things. By individually addressing customer groups and tailoring products, services and marketing campaigns, companies can also leverage additional potential.

Companies currently have to keep track of a wide range of economic factors. How can sales remain stable or increase in the face of volatile markets and declining purchasing power? How can operating costs be reduced without compromising on product quality? And how will interest rates develop? Questions like these need to be answered. Effective cash flow management is necessary to ensure solvency. Companies need to find a balance between short-term optimisation of cost structures and a sustainable performance strategy.

Geopolitical tensions and conflicts develop extraordinary dynamics and often have cascading effects. Sanctions, trade barriers or other market access restrictions can impair supply chains that were previously functioning smoothly. Added to this is the risk of volatile exchange rates. Companies that diversify at an early stage and reduce dependencies can set themselves apart from the competition. New business relationships and gradually growing risk management expertise are crucial for resilience.

Measures that are necessary to comply with complex regulations - including the Supply Chain Due Diligence Act or the EU AI Act - are associated with increased time expenditure. This is because the laws and standards change frequently and also in terms of scope. The number of regulatory hurdles is increasing. In turn, this also means that it is more difficult for new competitors to enter the market: Those who analyse the legal implications at an early stage and proactively comply with regulatory requirements will take a leading position.

Cyber criminals have new attack vectors in times of digital transformation. The number of successful attacks is increasing. Attackers are particularly focussing on the encryption of company data (ransomware). Cyber regulations, including NIS-2, the EU's Cyber Resilience Act and DORA, should help companies to be better prepared in future. Recognising cyber risks at an early stage - for example through simulations - and complying with the requirements are essential. This strengthens the defence mechanisms and at the same time the trust of customers and partners.

The ageing of society is affecting a number of economic sectors. One aspect in focus is the shortage of skilled workers, which is already causing upheaval on the labour market. It is becoming increasingly difficult for companies to attract suitable applicants for vacancies. As a result, the global search for talent is becoming more relevant. Customers' product preferences and behavioural patterns are also changing - not least because average life expectancy continues to rise. These factors in turn open up new opportunities for companies in new market niches.