5 Trends Shaping the Future of Corporate Strategy

5 Trends Shaping the Future of Corporate Strategy

Having future foresight is key to developing a winning corporate strategy. But between sifting through a sea of data, navigating unpredictable events like the pandemic, and keeping up with the pace of technological innovation, knowing what to keep an eye out for can be challenging. 

According to Gartner, the average corporate strategist spends 26% of their team’s time and around $200,000 of the annual budget investigating emerging trends. With the increased demand for corporate strategy expertise (up 559% YoY on Graphite), we wanted to know the trends shaping the future of this core functional skill. 

To get to the bottom of this question, we engaged our network of ex​​perts that are on the ground floor of developing and executing corporate strategies for their clients on Graphite. Here are the five trends we unearthed. 

Building portfolio resiliency via bold M&A plays 

The global M&A market has closed 2021 at an all-time record of $5.9trn in over 63,000 transactions, an annual increase of 64%.

With uncertainty at an all-time high, businesses have focused on building portfolio resiliency via bold M&A plays. Although most of the deals involved consolidation, a significant number were focused on adjacent sectors. 

For example, Q3 2021 saw traditional s​​ervice providers buying digital-first companies in their same industry, parts manufacturers investing in supply chain software, and the purchase of ‘lookalike’ companies in different global markets.

2022 is shaping to overtake 2021, with transactions taking off at a blistering pace: Microsoft’s $69 billion acquisition of Activision, the largest all-cash purchase on record. Frontier announced its $2.9 billion acquisition of Spirit Airlines to create the fifth-largest US airline.

Data and market research takes center stage

Given the uncertainty of new and upcoming coronavirus variants and their potential impact on business performance, businesses are increasingly relying on data and market research to gain a competitive advantage. 

Fueling this demand for information is the need to quickly synthesize patterns and trends to enable faster decision making across the entire organization. From an operational perspective, data is essential in driving supply chain efficiencies. Visibility into inventory, distribution, and production goes a long way in protecting a company's bottom line. 

Likewise, the use of consumer data to inform go-to-market strategies enables companies to better position themselves when entering a new market or launching a new product or service. As digitization and M&A transactions continue, a greater emphasis will be placed on market research and data to make sure that these initiatives are successful. 

Cracking the workforce code 

The Great Resignation is still top of mind for most CEOs, especially with the latest omicron variant. As the war for talent continues, companies are asking themselves how they can optimize the way they work and what they can do to support people and help them be more productive. 

Part of answering that question has been investing in more collaboration tools — influencing the increase in digital transformation projects mentioned earlier in this blog. Since 2019, enterprise adoption of collaboration tools has risen 44%, and according to Spiceworks’ Ziff Davis, the acquisition of such tools will make up 28% of the enterprise project budget in 2022.  

However, digital investment in the workforce is not the only way companies have addressed the impact of the Great Resignation. Many organizations are also exploring flexible workforce models like on-demand hiring platforms to address capacity and capability gaps.

By building a bench of independent workers, companies can build an agile operating model where talent can be deployed at a moment's notice to the highest priority work — ensuring strategic work gets done on time.   

Developing more flexible, agile, and adaptable supply chains

Supply chain issues will remain a hot button area for businesses across industries for the foreseeable future. We’ve touched on this throughout this blog, as trends, like most things, are interconnected and influence and impact one another. 

As businesses strive to optimize supply chain operations to satisfy consumer demand, they are using all the tools at their disposal. That means investing in data to facilitate the acquisition and implementation of automation, AI, and machine learning technologies to conducting M&As in adjacent sectors to remove barriers to resources. 

To truly move beyond a reactive state, leaders will need to start focusing on producing the next disruption rather than waiting for it. As a result, companies will be relying more heavily on data and market research to compete effectively, not just with adjacent businesses, but with uncontrollable factors such as climate change as well. 

This is especially true at a time when visibility, tracing, and sustainability are becoming central themes for supply chain leaders. As a result, ESG projects in the future will continue to increase. 

Continued acceleration of digitization 

Digitization has been an ongoing trend, but the pandemic put it into overdrive. Companies that did not have technology as a priority had to quickly pivot and reevaluate their stance on the tech and tools they use. 

Today, the implementation of technology has permeated the entire business ecosystem. Companies are increasingly leaning into AI and machine learning to optimize supply chains, increase productivity, improve customer experiences, and enhance cybersecurity. 

Business leaders show no signs of slowing down either. Spend on these technologies is predicted to break the $500 billion mark with a five-year compounded annual growth rate of 17.5%. 

However, productivity and efficiency aren't the only reasons behind the demand. Businesses are also analyzing how AI and machine learning can be used as a value driver rather than a cost factor. 

John-David Lovelock, Garner's research vice president, says the increase in IT spending in 2022 can be attributed to companies using technology to build new products and services to differentiate their market positions further. 

It’s all about staying ahead of the trends and capturing future value today

Corporate strategists today are dealing with multiple unknowns and must be able to pivot at a moment's notice. Besides continuously developing holistic strategies that maximize the benefits of businesses' investments and initiatives, they're also expected to accomplish more with less.    

In 2018, the average corporate strategy consisted of five members. But with the shifts in today’s labor market, it's likely that the sizes of these teams have either remained or changed given the increased demand for this core functional skill

One way to navigate the trends shaping corporate strategy's future is to lean on independent experts to add capacity and horsepower to your teams. Adding expertise to your strategies can enhance the effectiveness of your projects while fast-tracking new projects and initiatives. 

Want a look at how companies are using on-demand hiring to power their corporate strategy teams? Download this playbook to get a closer look. 

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