Business leaders believe that global crises "are here to stay"

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Most organizational leaders believe that disruptions like the pandemic are here to stay. A Deloitte study reveals that more than 60% of global leaders in C-Level management roles (CXOs) believe disruptions like the pandemic may be more regular in the future.

Companies that plan and invest in advance to respond to these disruptive periods are best positioned to recover and thrive in these phases. Three-quarters of CXOs believe that climate change will be the main challenge that companies will face over the next decade.

Most organizational leaders believe disruptions like the pandemic are here to stay, with 60% of global C-Level leaders (CXOs) surveyed by Deloitte around the world considering we are likely to see more disruptive phenomena.

In Portugal, around half of business leaders said that, in 2020, Covid-19's impact on their organization's turnover was very negative, with investment also generally being negatively affected.

These are the main conclusions of the study conducted by Deloitte, which surveyed the CEOs of the largest companies in the sectors of commerce, transport, industry, financial activities and insurance operating in Portugal, as well as business leaders from more than 21 countries (data obtained by Deloitte Global), in order to understand how organizations are dealing with the challenges generated by the pandemic and understand their opinions on how to resist this disturbance.

The analysis carried out reveals that the most resilient organizations – those with flexible, adaptable, innovative and long-term mindsets and cultures – are better positioned to overcome disruptions and restore normalcy in the post-pandemic.

While most leaders admit that disruptions can become the norm, less than a third say they are completely confident that their organizations can quickly adapt and respond to future threats.



2020 tested the resilience of companies
Prior to 2020, only 24% of CXOs felt fully prepared to lead during potential disruptions, and only 21% felt completely confident that their organizations could adapt and change course quickly if necessary.

During the pandemic, those numbers jumped to 34% and 30%, respectively, indicating that the events of 2020 have given some CXOs a boost of confidence about their organization's resilience and their own ability to manage this moment.

However, this number indicates that 66% of CXOs do not feel completely ready to lead in disruptive situations and 70% do not have complete confidence in their organization's ability to adapt to disruptive events.

CXOs consistently state that market disruptions are not disappearing. In fact, three-quarters of respondents say they believe the climate crisis is of a similar or greater magnitude compared to the COVID-19 pandemic. CXOs ranked climate change as the number one issue that companies will face over the next decade.

Nearly half of Portuguese leaders stated that, in 2020, the impact of Coronavirus on their organization's turnover was very negative, canceling out space for investment that was also negatively affected. However, managers are relatively optimistic about the future: within 3 months, 53% of respondents expect a neutral impact on turnover and within 12 months, 53% of respondents expect a 25% increase.

During 2020, 60% of Portuguese executives reveal that the pandemic negatively affected the number of employees. However, the view on their performance was not affected in the same proportion. In fact, 60% of CEOs believe that the pandemic has positively affected or had no impact on performance. But when it comes to recruiting and managing people, managers are pessimistic about the future.

Over the next 3 months, about 1/4 of CEOs predict a 25% reduction in the number of employees and within 12 months, a situation is expected to worsen, with nearly half of CEOs predicting a 25% reduction in their number of collaborators.


Five attributes of resilient organizations
The study further suggests that organizations that deliberately build the following attributes into their operations and business cultures are best positioned to overcome the disruptions of the future and help introduce a “better normal”. These attributes are:

1 - Preparation
CXOs must prepare for all outcomes, both short and long term. More than 85% of global CXOs whose organizations managed to balance their short-term and long-term priority approach felt they had successfully adapted to the events of 2020.

From the perspective of Portuguese leaders, more than 70% say that their organizations were well or very well in balancing short-term needs and managing long-term growth opportunities. It is also noteworthy that 93% of respondents consider that their organization was more resilient than its competitors in managing the crisis.

2 - Adaptation
Global and Portuguese leaders recognize the growing importance of having versatile professionals, especially after a year like 2020. To that end, flexibility and adaptability were the attributes they referred to as the most critical for the future. Portuguese leaders also emphasize critical thinking and the courage to challenge the status quo. A vision that is not shared at a global level, where global leaders choose to highlight technological knowledge and expertise as critical characteristics in the field of talent.

In the global survey, about three out of four of the participants said they had implemented measures to make their workforce more adaptable (such as training or re-skilling, implementing outplacement programs or offering flexible working models). In Portugal, the critical aspects continue to be related to teleworking, the maintenance of productivity and the search for solutions that allow the company's culture and values ​​to be instilled in this context of social distance.

3 - Collaboration
Business leaders see the importance of collaboration within their organizations as vital, noting that it has accelerated decision making, mitigated risk and led to more innovation. Technology was a critical enabler of organizational collaboration throughout the pandemic.

Only 22% of global CXOs said their organizations had the necessary technologies to facilitate teleworking before the pandemic; 42% developed and adopted these technologies out of necessity, throughout 2020. In Portugal, 80% of CEO's believe that their organization managed well or very well the transition of systems/tools to the cloud in order to support telework and 60% of Portuguese managers consider the investment in the next 12 months in technology and systems to be able to support teleworking as critical/very critical.

4 - Trust
C-Level understands the challenge of building trust with its main stakeholders, but most Portuguese and global leaders say that their organization has excelled in maintaining the safety of its employees and customers, as well as in motivating its employees.

More than 2/3 believe they have managed to maintain the levels of trust between leadership and employees and around 60% believe they have provided their employees with adequate resources with a view to promoting their mental well-being.

5 - Liability
Most CXOs recognize that the business world has a responsibility that goes beyond the obvious; 87% of global leaders say they have managed to balance well or very well all their stakeholders' needs and even consider that their organizations could adapt and respond quickly to unexpected events.

On the other hand, around 60% of Portuguese organizations consider that they have managed the context well or very well with the aim of creating a more agile, inclusive and diverse organizational culture, a figure below the assessment of organizations at a global level.

Organizations that demonstrate concern with building a more resilient organizational environment tend to be considered more authentic, with relevant levels of talent appreciation, supporting the community and showing concern with environmental and social commitments.

“The challenges of the last twelve months have been unique and relentless. The confluence of a global health pandemic, social and political unrest, and worsening weather events have presented organizations with difficult choices, new ways of operating, and fundamental strategic changes. And, in this context, organizations that plan and invest in anticipation will certainly be better positioned to prosper in the future, both in Portugal and in the world”, says Miguel Eiras Antunes, Partner at Deloitte and Leader of Government & Public Services at Deloitte.


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