{"id":558,"date":"2022-08-05T15:16:08","date_gmt":"2022-08-05T15:16:08","guid":{"rendered":"https:\/\/www.ahandersonconsulting.com\/blog\/?p=558"},"modified":"2022-12-01T13:22:49","modified_gmt":"2022-12-01T13:22:49","slug":"business-trends","status":"publish","type":"post","link":"https:\/\/www.ahandersonconsulting.com\/blog\/business-trends\/","title":{"rendered":"Business Trends and their Impact on Strategy, Growth, and Talent"},"content":{"rendered":"\n

Special thanks to Freddie Briggs, VP of Strategy & Value Creation for PDC Machines LLC, <\/strong> Rick Kowey,<\/em> COO of Universal Compressed Air (UCA)<\/strong>, Kevin Lynch, SVP of Industrial Gases at Anova<\/strong>, and Sobia Chaudhry, VP of HR at PDC Machines for their contributions. The content for this blog was published in the July 2022 US Print edition of GasWorld<\/a><\/strong>. <\/strong><\/p>\n\n\n\n

This year has started out a bit differently than previous years because companies as well as countries forecasted a \u201cfully-recovered\u201d pandemic environment, starting in the Spring\/Summer timeframe. More than a quarter into 2022, the forecasts have been challenged due to macroeconomic (i.e., inflation) and geopolitical factors (Ukraine\/Russia war), in addition to existing challenges that have continued or accelerated for many sectors. These challenges include continued supply chain disruptions, increased competition for talent, continued cost-pressures driving more automation and digitalization of operations, and increased pressure for more sustainable products and operations. All these business trends and challenges have affected how companies approach strategy, target growth and secure and retain employees. This article discusses how these trends have affected how companies approach each of these areas, but also shares lessons and best practices from contributors across the Industrial gas space.<\/p>\n\n\n\n

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Trends<\/h4>\n\n\n\n

At the start of 2022, this was the first time in 2+ years when business leaders have not cited the pandemic as the top risk to growth in the global economy. However, geopolitical conflict now overshadows all other risks, according to a recent survey by McKinsey. Seventy-six percent (76%) of all respondents cite geopolitical instability and\/or conflicts as a risk to global economic growth over the next 12 months, and 57% cite it as a threat to growth in their home economies. In addition, there are ongoing trends that remain or may have even accelerated since the beginning of the year depending on the sector such as talent shortages, supply chain disruption and resiliency, the necessity for greater digitalization and automation, and the increasing pressure to commit to a sustainable future, among others. Let\u2019s take a deeper look at each of these areas. <\/p>\n\n\n\n

Supply chain disruptions garnered a lot of attention in 2021, and it is still very painful for many companies. Congestion at ports continue to show no signs of abating and prices for a vast array of goods and services are still rising. <\/p>\n\n\n\n

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Supply chain challenges have been the big one for some time now, it has impacted both raw material deliveries, as well as shipping\/port congestion causing customer lead times to be pushed out. Even the lockdowns in China in Q1\/Q2 2022 have had significant impact on supply chains.<\/em><\/strong><\/p>Freddie Briggs, VP, Strategy & Value Creation for PDC Machines LLC<\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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Most agree that answers and solutions will require investment, technology and a refashioning of the incentives at play across global supply chains. It will take more ships, additional warehouses and an influx of truck drivers, none of which can be summoned quickly or inexpensively. Many months, and perhaps years, are likely to transpire before the challenges fully subside. <\/p>\n\n\n\n

Digital transformation continues to rank at the top of the list of trends with its countless innovations (i.e., Industrial IOT, Artificial Intelligence, E-commerce, Intelligent Automation, etc.) for businesses to explore and leverage across their enterprises. The pandemic has demonstrated the need for companies to adapt and accelerate their adoption of these technologies or be left behind. <\/p>\n\n\n\n

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We are seeing increased pressure on cost control for our customers which is driving both the need for visibility and efficiency throughout their Supply Chains, as well as increased demand for remote asset monitoring & digitalization.<\/em><\/strong> <\/p>Freddie Briggs, VP, Strategy & Value Creation for PDC Machines LLC<\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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The Industrial Gas industry has done a decent job in getting on the \u201cdigital bandwagon\u201d but there is still a large amenable market of late adopters. It is clearly understood that to remain competitive in this rapidly changing landscape, organizations must quickly adapt their strategies and embrace the changes that are most likely to impact their customer\u2019s experience significantly. <\/p>\n\n\n\n

COP26 thrust the net-zero transition onto the global stage, adding to momentum that had already been building. For example, by March 2021, more than 2,150 businesses had signed on to the United Nations (UN\u2019s) Race to Zero initiative, placing themselves, as \u201cearly adopters.\u201d As of April 2022, this number had grown to more than 7,100. A closer look at the numbers reveals a few trends. Large companies are highly represented according to a recent PwC survey with nearly two-thirds of those with revenues of US$25bn or more making the commitment, compared to 10% of companies with revenues of less than US$100mn. It also appears that public companies are more than twice as likely as the private companies to have made a net-zero commitment. And the final perspective is that certain sectors are more active than others. As expected, energy, power, and utilities are the most highly represented reinforcing the fact that high-emitting (and hard-to-abate) industries are often front and center when it comes to climate action. Industrial gas majors (Linde, Air Liquide, Air Products, and Taiyo Nippon Sanso) have all made commitments, as well as many second and third tier players and suppliers to the industry. <\/p>\n\n\n\n

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We are noticing a major trend among industrial customers who are looking to minimize energy costs, reduce carbon footprint, and preserve capital by outsourcing non-core plant activities, such as compressed air generation – a pervasive application across industry and big consumer of electricity. For example, UCA develops and implements PIPELINE AIRTM<\/sup> solutions to meet accelerating customer needs for air \u2018over-the-fence,\u2019 guaranteeing customer savings, performance, reliability, and predictable expenses over the long-term<\/em><\/strong>.<\/p> Rick Kowey, COO of Universal Compressed Air (UCA)<\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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Strategy<\/h4>\n\n\n\n

Every company has had their strategy \u201cstress-tested\u201d over the last 2+ years (some more than others), forcing them to make some adjustments to long-standing business approaches. <\/p>\n\n\n\n

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For PDC Machines, some short-term operational decisions may have changed,<\/em><\/strong> but our core approach to strategy has not significantly changed.<\/em><\/strong> <\/p> Freddie Briggs, VP, Strategy & Value Creation for PDC Machines LLC <\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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Existing business trends, along with economic and geopolitical factors, are continuing to challenge those recently adjusted strategies. As a result, there are some common themes emerging with how companies are approaching strategy:<\/p>\n\n\n\n

  • Inclusiveness<\/strong> \u2013 Incorporating more different\nperspectives, mind sets, and skill sets to enhance the strategy development process.\nThink strategic customers, suppliers and select employees that provide the\nmissing \u201cvoices.\u201d<\/li>
  • Frequency<\/strong> \u2013 Instead of every 3-5 years,\nmoving towards event or KPI driven indicators to force companies to revisit\nstrategy in a more proactive manner.<\/li>
  • Linkage to Culture<\/strong> \u2013 Forward thinking\ncompanies have acknowledged there is great value in better connecting their\napproach to strategy and culture. In PwC\u2019s 2021 Global Culture survey, 81%\nstated that organizational culture can be a source of strategic differentiation\nand a key ingredient in the value proposition to customers.<\/li>
  • Problem-solving<\/strong> \u2013 It is a necessary and\nwidely used skill set in most every business process and is increasingly being\nused in strategy development and innovation processes to improve outputs.<\/li><\/ul>\n\n\n\n

    The prevalent action taken by companies with respect to strategies is \u201cdoubling-down\u201d on customer-focus, to help better anticipate needs and the innovation required to stay ahead in the market. <\/p>\n\n\n\n

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    Our customers are dealing with situations they have never faced before,<\/em><\/strong> they want more & more timely information, but not sure what exactly adds value. We see our role as being a trusted long-term partner who really understands our customers\u2019 business. We guide them to find valuable insight from the information that really matters<\/em><\/strong>.<\/p>
    Kevin Lynch of Anova. <\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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    Our strategy at UCA has been to create an innovative and sustainable commercial business model, which can be extended beyond air-as-a-utility to other customer plant critical resources<\/em>. When we pair our versatile business model with our unique engineering and design strengths, we can readily adapt to the requirements and expectations of adjacent markets and applications.<\/em><\/strong> <\/p>
    Rick Kowey of UCA<\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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    Ultimately, the true test (or results) of a good strategy is best seen in the marketplace and the P&L over time. <\/p>\n\n\n\n

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    Growth<\/h4>\n\n\n\n

    Companies that are able to grow their top-line despite the headwinds of currency fluctuations, geopolitics, macroeconomic events, separate themselves from their peers. So, how do those companies sustain growth in challenging and dynamic times like these? Some of the common traits include:<\/p>\n\n\n\n

    • Investment<\/strong> \u2013 while many companies are cutting\/constraining investment, these companies are investing in new product development, training staff, and innovation of business processes such as upgrading websites, investing in digital technology and really anything else that will make the business look and perform more impressively in the eyes of customers and employees. <\/li>
    • Rethink <\/strong>\u2013 companies use this time to pause, reflect on business (using lessons learned), and make the changes that deep down they know they need to make. It may be rebuilding cost structures, changing critical supply chains, senior management changes, etc. <\/li><\/ul>\n\n\n\n
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      When you have high aspirations for growth, as we do, you must be willing to make adjustments, for us, delays in certain markets have caused us to shift and sell in different markets (i.e., Asia).<\/em><\/strong> <\/p>
      <\/em><\/strong> Freddie Briggs, VP, Strategy & Value Creation for PDC Machines LLC <\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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      • Customers \u2013<\/strong> they use this time to build bulletproof relationships with each and every customer they are fortunate enough to have. They proactively communicate, engage them, and find out what is going on in their world and most importantly of all, clearly understand what their customers need from them. <\/li><\/ul>\n\n\n\n
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        At UCA, we have a two-pronged approach to profitable growth. First, we place great value on establishing broad and deep relationships with existing customers who offer multiple project opportunities and a chance to expand our business relationships. Second, we welcome the challenge of new customer applications, such as supporting electric vehicle (EV) battery production, and we thrive on tailoring our PIPELINE AIRTM<\/sup> solutions accordingly.<\/em><\/strong> <\/em><\/strong><\/p> Rick Kowey of UCA<\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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        • “NEW”<\/strong> things<\/strong> \u2013 how many times have we watched businesses slowly diminish in presence simply because they kept doing the same thing? More progressive companies are prepared to do new things, try ideas outside of their comfort zone and look to others in the process for advice. In a recent McKinsey survey, 52% of executives consider (organically) building their businesses a top-3 (or higher) priority for growth.<\/li><\/ul>\n\n\n\n
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          There is pent-up demand everywhere from ~ 2 years of disruption, but not all regions have bounced back at the same rate. As a result, there is a need to target the right geographies with the right products, as well as taking advantage of some newly \u201cdiscovered\u201d needs that resulted from the pandemic. In our case, this includes the remote monitoring of hospital oxygen tanks, which surprisingly has not been done everywhere, even in the major developed economies<\/em><\/strong>.<\/p>Kevin Lynch of Anova. <\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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          There are obviously other sources of growth that these\ncompanies are employing such as mergers, acquisitions, divestitures (MA&D),\nand even leveraging external capital\/support from private-equity, venture\ncapital or other third-parties to accomplish some or all of the above. No\nmatter the approach, it is clear that faster growing companies have made\nsignificant adjustments during and post pandemic to bolster growth prospects. <\/p>\n\n\n\n

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          Talent<\/h4>\n\n\n\n

          The \u201cwar for talent\u201d is over, and talent has won. Now organizations are rethinking and recalibrating their relationships with employees. <\/p>\n\n\n\n

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          A company\u2019s mission and culture are what gives it an identity, Together, they can become a source of pride and fulfillment for its people. A collection of individuals working remotely–rarely or never seeing each other in person– will struggle to form or partake in a culture. So, it is important to balance the cost and convenience of the \u2018work from home\u2019 era with the intangible benefits and efficiency of bringing people together in person \u2013 learning, collaborating, and bonding. And within the company, different teams will have different requirements for in-person togetherness vs. remote working, based on the nature of their responsibilities and the degree of self-direction of their members. The \u2018One-size-fits-all\u2019 approach will not work. Finding the \u2018sweet spots\u2019 that work for the company, the current employees and new talent is an evolving challenge.<\/em><\/strong> <\/p>Kevin Lynch of Anova. <\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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          The pandemic has created significant movement by the workforce not just to other companies, but to start their own business or leave the workforce entirely, for a variety of reasons including flexibility, health\/family priorities, ready to try something new, etc. So, how are some of the best-in-class companies adjusting to these challenges? A few of the approaches being utilized include:<\/p>\n\n\n\n

          The pandemic has created significant movement by the workforce not just to other companies, but to start their own business or leave the workforce entirely, for a variety of reasons including flexibility, health\/family priorities, ready to try something new, etc. So, how are some of the best-in-class companies adjusting to these challenges? A few of the approaches being utilized include:<\/p>\n\n\n\n

          • Engagement<\/strong> \u2013 they take more time to listen\nand reconfirm what they heard with ALL demographics within their company. Use\nmultiple modes (App\/Email\/Face-to-face) and different group sizes (one-on-one,\nfocus\/large groups). Also, not just the happiest and most productive team\nmembers, but also the least happy people. They ask them what would make them\nhappy and more engaged at work, their biggest frustrations and what is getting in\nthe way. They are not able to address everything but know all the issues. <\/li>
          • Flexibility<\/strong> \u2013 based on engagement\nfindings and validating with some securing external data, they act quickly implementing\nmore flexible working arrangements, offering increased mental health and\nwell-being support, making compensation adjustments (inclusive of benefits and\nretention bonuses when necessary) in-line with local markets, and increased\ntraining and development, all aligned with the employee feedback.<\/li>
          • Culture <\/strong>\u2013 the best analogy that I have\nheard to culture is that of an \u201coperating system (O\/S) on a mobile phone\u201d\nthanks to a recent PwC blog. The O\/S works invisibly in the background to\nconnect your apps, helps you get things done, and provides updates, enhancements\nand new features. The same is true for a well-defined company culture. It needs\nto be refreshed to ensure that it is staying current with where the company is,\nthe external marketplace and where both are going. The best companies realize\nthat and look at culture has an enabler to strategy and overall organizational\nperformance. As a result, culture is a critical component of talent management\nand other key business processes in the company.<\/li><\/ul>\n\n\n\n
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            Hiring challenges are real. Recruiting efforts are taking a lot longer (especially for more skilled\/technical roles), forcing us to become more creative and adaptable,\u201d states Rick of UCA. \u201cHowever, because of our entrepreneurial environment and extraordinary existing Team, we are attracting Team Members who are excited to become part of an innovative, growth-oriented company.<\/em><\/strong> <\/p>Rick of UCA<\/em><\/strong><\/cite><\/blockquote>\n\n\n\n

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            The talent landscape has dramatically shifted to where it moves faster and costs more to find a good fit, we are evolving into a recognized brand \u2013 an \u2018employer of choice\u2019 sheerly by word of mouth through experiences of current employees, and we are enjoying much lower attrition rates than the industry in a crazy market. No doubt the fight is still fierce, but we are lucky to be in good positioning for both growth and value as a company.<\/em><\/strong><\/p> Sobia Chaudhry, VP of HR at PDC Machines<\/em><\/strong> <\/cite><\/blockquote>\n\n\n\n

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            Takeaways and Next Steps<\/h4>\n\n\n\n

            The best performing companies (both financially and to work\nfor) over the last 10, 20 or even 30 years, have mastered the ability to grow\ntheir business and sustain competitive advantage, in the face of continued\nexternal challenges that are difficult to predict. These high-performing companies\nare not defined by their size, their geographic footprint or the end-market\nthey serve, but they exist across the entire business spectrum. They all seem\nto be the top (or near the top) in terms of innovation in their market, they are\nextremely customer-focused, and have an innate ability to anticipate market\nshifts or \u201csee around the corner\u201d as it may seem, positioning them better to\nwhat may come along.<\/p>\n\n\n\n

            Those of us engaged in the industrial gas industry understand that the diversity of our product portfolios, the diversity of the end-markets served, dampen the affect of external factors on our businesses, which is good. However, the best performers in our industry are doing these things discussed in the article as well as others, and that is why they are viewed as the leaders. The question for you, is are you doing some of these things?<\/p>\n\n\n\n

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            <\/div>\n","protected":false},"excerpt":{"rendered":"

            Special thanks to Freddie Briggs, VP of Strategy & Value Creation for PDC Machines LLC, Rick Kowey, COO of Universal Compressed Air (UCA), Kevin Lynch, SVP of Industrial Gases at Anova, and Sobia Chaudhry, VP of HR at PDC Machines for their contributions. The content for this blog was published in the July 2022 US […]<\/p>\n","protected":false},"author":2,"featured_media":566,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,4,9,46,10,86],"tags":[25,47,55,56,12,26],"class_list":["post-558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-strategy","category-global-business-services","category-industrial-gases","category-organisation","category-private-equity","category-resilience","tag-business-growth","tag-customer-focus","tag-strategy","tag-structure-organization","tag-supply-chain","tag-trends"],"_links":{"self":[{"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/558","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=558"}],"version-history":[{"count":0,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/558\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/media\/566"}],"wp:attachment":[{"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=558"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=558"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ahandersonconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}