As we move forward, the world economy is facing a global recession that will have a significant impact on businesses and their ability to execute change management strategies. According to the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, one-third of the world will be in recession this year, with half of the EU seeing their economies contract. This slowdown is being driven by factors such as the war in Ukraine and a slowdown in China’s economy due to the ongoing Covid-19 pandemic and strict zero-Covid policies.
In addition to economic challenges, supply chains continue to be under pressure because of the pandemic and ongoing trade tensions between the US and China. Companies are also facing social and consumer pressures to localize their supplier bases, with many struggling to implement end-to-end transformations to improve supply chain efficiency.
While 54% of companies say their supply chains have changed significantly in the past two years, only 27% are implementing end-to-end transformations. The companies that are deemed “Masters of supply chain” are seeing 20% performance improvements,
In this challenging environment, businesses must focus on developing a new talent strategy that includes cloud capabilities to enable a better hybrid work experience, a greater emphasis on diversity and inclusion, and positive steps towards sustainability. There is also a “storm brewing” between organizations that want their employees back in the office and employees who prefer the flexibility of working from home, and a balance will have to be struck for the solution to work for both employer and employee.
To navigate these challenges, it is essential for businesses and consultants to adopt an open mindset, embracing diversity and different cultural and ethnic backgrounds. This will be crucial for leading in a non-linear world and building well-adapted, resilient organizations that can thrive in the face of uncertainty.
Have you identified your supply chain gaps and opportunities to minimize impact to you trading model and profit?