Mark Riley, president, Bank of America Fresno/Visalia
Written by Edward Smith
As the effects of the coronavirus continue to reshape our world, 2022 will see several factors accelerating the shift to a more digital, hybrid future. In the year ahead, there will be a continued focus on digital transformation as the driving force creating value for business owners. Below are some considerations of what will come next—and how organizations can position themselves for success.
New digital advances key to growth
In 2022, it will be critical for companies to further digitize their offerings and operations using new and emerging technologies, such as artificial intelligence (AI), machine learning (ML) and data analytics. In a Deloitte Insights global study of 441 executives across industries, 73% reported piloting or adopting AI in one or more of their business units. Organizations are learning that they don’t need large IT departments to do so, as more off-the-shelf AI and ML solutions become available. Companies of all sizes are using these solutions to increase automation and streamline tasks. In addition, digitalization will become a greater priority in unexpected areas of the business, such as M&A and succession planning.
— Mergers & acquisitions. Digital transformation can help to accelerate M&A deals and make companies more attractive acquisition targets. Those engaged in the M&A process are finding digital technologies helpful in reducing transaction time and costs and delivering greater value to buyers and sellers. And, according to Accenture, 52% of companies logging M&A activity described themselves as primarily acquiring digital companies or assets.
— Succession planning. Digital transformation should also be considered as business leaders think about the company’s long-term trajectory. This includes having talent with the skills to be agile in a quickly changing digital environment. A comprehensive succession plan should also include a roadmap for current and future leaders to assess where they stand on digital readiness, evaluate opportunities and risks, earmark digital investments, plan for disruption, and position the company for sustainable growth.
Embrace emerging trends
Digital capabilities can also help companies become more effective at recruitment and retention. While many companies hope to continue returning workforces to the office in 2022, many are offering remote or hybrid work options—which rely heavily on digital solutions. According to an August 2021 study by Accenture, 53% of people who never worked from home previously now plan to work from home more often in the future, even post-pandemic.
As more companies try to balance a mix of in-person and remote work, they will find that these digitally-driven workforces present new opportunities to unlock productivity and collaboration. And by removing geographical constraints on hiring, companies have more flexibility to hire from a wider and more diverse talent pool of candidates—something that can help companies stay competitive in a challenging labor market.
One-third of American companies have reported difficulty finding the talent they need, and the situation is expected to worsen. Companies can also focus on benefits to attract and retain employees. Financial benefit plans and wellness resources, employee education or affinity groups — often part of a focus on DE&I (Diversity equity and Inclusion) — will be more important than ever.
Efforts to realize sustainable growth
The White House recently stated that climate change poses “significant risks” to the U.S. financial system and put forth a roadmap for creating a more climate-resilient economy. Companies are responding: according to a recent survey conducted in partnership with the U.S. Chamber of Commerce, nearly half of those surveyed said their organization was either acting to reduce its net carbon emissions to zero or had already reduced their emissions to zero. To meet these demands, companies should implement a meaningful ESG (Environmental, Social & Governance) framework for every stage of the business life cycle, considering both their goods and services as well as activities across key business functions — from finance to sales to customer acquisition and more.
Employees have also become more aware of and interested in corporate ESG goals and postures. For companies in 2022, clarifying ESG targets and frequently communicating progress will be paramount. This will benefit not only talent attraction and retention but also customer acquisition as the spending power of Gen Z — a generation strongly engaged in environmental and social issues — continues to grow.
In 2022, it won’t be enough for a company to develop and sell a good product. How the company develops, markets and delivers the product will need to be increasingly digital, and take ESG factors into greater consideration. Companies that recognize the possibilities of digital transformation, while keeping the values of their employees and customers in mind, will be better positioned to address the business challenges in the year ahead — and beyond — while creating greater value for the stakeholders and communities they serve.
Mark Riley is Fresno/Visalia Market President for Bank of America.