Deloitte Private Report: Pandemic Accelerates Global Private Company Transformation

NEW YORK, May 17, 2021 /PRNewswire/ -- Deloitte today published its third report on the global private company market segment, Crisis as catalyst: Accelerating transformation, revealing that, despite market challenges in the past year, many private businesses believe they are well on their way to becoming more resilient in a post-pandemic environment. In fact, more than two-thirds of private business leaders surveyed expressed high confidence in their company's outlook over the next 12 months.

In examining how the pandemic has accelerated certain operations and activities, the report shows:

• Sixty-nine percent of private companies surveyed said the pandemic significantly accelerated their digital transformation — not just sparking but exploding the pace of adoption.
• Sixty-one percent of private companies expect to form new partnerships and alliances. 
• Sixty percent of respondents believe that supply chains need to be redesigned as a direct result of the pandemic. 

In the survey of 2,750 private company executives across 33 countries between Jan. 21 and March 9, 2021, Deloitte found that a majority of organizations are in the process of building their resilience across seven key elements: strategy, growth, operations, technology, workforce, capital and society. Survey respondents rated their company's status in implementing these elements of resilience to develop a "resiliency score." Using responses to these questions, surveyed companies were grouped into categories of highly resilient organizations, mid-resilient organizations, and low resilient organizations.

The survey found highly resilient organizations are more optimistic about their long-term growth potential than low resilient organizations, with 52% extremely confident in their outlook over the next three years compared with just 15% of those in the low resilient tier. Regionally, U.S. leaders are the most optimistic about revenue, profits and productivity in the coming year compared to other global private company leaders. Additionally, executives believe that both growth and technology, including digital transformation, are among the most important elements for resilient organizations.

"Private businesses' continued commitment to purpose throughout the past year has enabled leaders to accelerate their response to the uncertainties brought on by the pandemic," said Jason Downing, vice chairman, Deloitte LLP, and U.S. Deloitte Private leader. "Our global report shines a light on the forward motion private organizations are demonstrating across multiple areas, including digital transformation, supply chain redesign and the future of work. The research also underscores the marked differences between low and highly resilient organizations, as the latter are more inclined to invest for growth and evaluate their purpose in broader society."   

Other key areas highlighted in the survey report include: 

Anticipated growth and workforce
A majority of respondents believe their company will snap back from the crisis during the next 12 months but also believe the wide-ranging impacts from the pandemic may continue to be felt for the next several years. Private companies appear to have laid the groundwork for workforce changes through flexible workforce arrangements and by redesigning their organizations to be more agile and accomplish more with smaller, independent teams, including:

• Highly resilient organizations (19%) say they have fully transformed the nature of work at their organizations already and 38% say they are midway through such changes.
• Highly resilient organizations are more likely to supplement their workforce in the coming year than low resilient organizations (66% versus 48%).

Emphasis on digital transformation's benefits
Executives have broad expectations about the gains technology investments will deliver for their private organizations, and they plan to continue to increase the breadth of their technology investments. For example:

• Highly resilient organizations were nearly twice as likely (80% versus 43%) as those with low resilience scores to say that their digital transformation had begun prior to the crisis or is currently underway.
• The difference in how highly resilient companies view the importance of digital transformation to their growth versus those with low resilience was 18 percentage points.

Companies are also spending on technology in other areas. In the next 12 months, information security is primed to be the most popular technology spending area according to 39% of respondents, followed closely by cloud computing (38%) and data analytics (37%).

A sharper focus on purpose   
Purpose and trust have always been intertwined in the culture and foundation of private companies, but took on greater importance in 2020. The report unveiled that:

• Nearly 70% of the respondents said purpose increased in importance for their organization as a direct result of the COVID-19 crisis. 
• Highly resilient organizations were at the forefront in this respect, with 84% of the executives from these organizations saying they sharpened their focus on purpose.  

"Coming out of this pandemic, we're learning that the way companies think, act and invest are hallmarks of resilience and acceleration — and will likely continue to prove to be the themes embedded within organizations with staying power," added Downing.  

For more information on the Deloitte Private global report, "Crisis as a catalyst: Accelerating transformation," please visit www.deloitte.com/global/deloitteprivate.  

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500^® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today's marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's more than 330,000 people worldwide connect for impact at www.deloitte.com.

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