We’ve been riding the waves of economic uncertainty for a while, but now it feels like we’re being pulled further out to sea. Between unpredictability on a global scale, changing customer behaviors, and the constant undercurrent of market volatility, many organizations are starting to feel the pressure chipping away at their bottom line.
This is the time when finances tighten and investments face heightened scrutiny. It’s a difficult time to run an enterprise.
Sure, most organizations are strong enough to withstand the storm. But how do you actually emerge from it even stronger than before?
It’s about making investment decisions that not only help you ride the economic waves, but also make a big splash by turning today’s challenges into tomorrow’s opportunities.
Yes, Organizations Can Succeed During Challenging Times
Ever wonder how, when the economy slumps, some organizations barely make it to the other side while others emerge with a newfound sense of direction? It isn’t luck or timing that determines who wins or loses – it comes down to making the right decisions when it matters most.
Deloitte conducted a comprehensive study examining the performance of 500 enterprises between 2016 and 2022. They wanted to see how successful businesses created value and navigated volatility during economically challenging times.
They found organizations that thrived during economic uncertainty excelled in two critical areas:
- Ability to Win: Organizations that have a long-term vision and have cultivated unique differentiators that set them apart from their competitors. Companies that knew precisely who they were and where they were headed, and didn’t let economic fog block their path forward
- Capacity for Change: Organizations that could identify market shifts and quickly adapt by integrating new capabilities and maintaining operational excellence, even as they experienced the pressure brought on by economic headwinds
Companies that mastered these two areas had a 50% higher price-to-earnings ratio and 18% lower share price volatility than their peers who didn’t.
In other words, investors valued them more, and their stock prices were more stable than those of their competitors.
These organizations didn’t simply perform better financially. They also demonstrated significantly greater business resilience during economic disruptions.
The takeaway is clear. Strategic clarity and adaptability can create the foundation for your organization to succeed, even when uncertainty is staring you right in the face.
It Starts by Focusing on Strategic Value
When economic indicators trend downward, the strategic value you deliver is how you maintain operational excellence.
But how do you innovate and drive strategic value when resources are constrained and there’s pressure to do more with less? Especially if stakeholders demand you create both stability and innovation.
Below are the essential steps needed to succeed in today’s economic landscape.
1. Eliminate the blind spots
When budgets get tighter, there’s even more pressure to advance the company’s strategic objectives. But you’ll have difficulty knowing how to achieve – or even pursue – those strategic outcomes unless you’ve got visibility across all work types within your organization.
You need a single source of truth that eliminates dangerous blind spots with real-time, high-quality data. This will help you:
- Quickly identify when investments begin drifting away from strategic priorities as market conditions change
- Spot misalignments between strategic goals and the work being done, before you waste valuable time, money, and resources
- Recognize emerging opportunities for strategic value and rapidly reallocate funding and resources
Holistic visibility is important during the best of times. But during economic uncertainty, it’s absolutely essential to ensure your efforts lead to positive outcomes. Without this visibility, you’re navigating an economic storm with a broken compass.
2. Be flexible with resource planning and capacity management
Tough times call for greater business agility. Your enterprise needs to be able to pivot quickly when external disruptions force strategic shifts.
Having sophisticated resource management capabilities means you can quickly take action to:
- Adjust resources as priorities evolve, ensuring you’re maximizing your ROI
- Make sure the right people with the right skills are working on the highest-priority initiatives
- Forecast how much work teams can handle, considering dependencies and existing commitments, while ensuring there isn’t duplicate or conflicting work across departments
Flexibility is important. If you can shift direction quickly when needed, you’re better positioned to capitalize on emerging opportunities before the competition.
3. Keep your investments connected to strategic objectives
When every investment decision is facing more scrutiny than ever, it’s imperative that you have a clear line of sight between the work you invest in and your strategic objectives.
This allows you to justify continued investments critical to your long-term success, even when short-term pressures mount. It will also help when you need to make data-driven decisions about when to stay the course or pivot based on market conditions and other changes you may face.
With the elements above, you have a strong foundation for cultivating operational excellence. A foundation that can propel your organization forward while competitors struggle to stay afloat.
Strategic Portfolio Management: Your Compass for Economic Resilience
The difference between thriving and merely surviving often comes down to being able to focus on your strategic vision or getting swept away by strategic drift. This is where Strategic Portfolio Management (SPM) can help.
An effective SPM solution will give you holistic visibility into all types of work being funded and executed across the business, so you can see which ones align with your strategic objectives and which initiatives have drifted off course.
Use SPM to make data-driven decisions to evaluate competing demands, rapidly reprioritize initiatives, and ensure your constrained resources are directed to the work that matters.
Download our What Is SPM eBook and see how the right SPM solution can drive operational excellence and empower your organization to capitalize on important opportunities, even when market conditions are tough.
Already using SPM but want to do more? Check out our Best Practices for Aligning Strategy, Funding, and Execution and learn how you can make better decisions to maximize efficiency, reduce spending, and increase ROI.
