How can you create long-term value with a short-term focus?

EY’s 2021 Global Alumni Survey reveals the imperative to prioritize sustainable value creation. But how, with competing short-term demands?

The pandemic has presented us with a chance as much as a challenge: a chance to move from a growth economy to a value-based economy, marked by prioritizing long-term value and the needs of multiple stakeholders over short-term growth. This was revealed in EY’s Global Alumni Survey of over 12,000 alumni, which included 1,800 C-Suite and board members, who unanimously say that leaders need to have a view on how to achieve long-term value above all else.

They cite long-term value as their key priority, yet also rank more immediate challenges like operational efficiency, talent concerns, and adopting new technologies among the top five biggest issues. Conversely, leaders are underweighting issues relating to political risk management, supply chain resilience and diversified offerings - a decision which may prove detrimental to their sustained success.

Beware of the blind spots

The fact that leaders are focused on long-term value rather than operating in survival mode shows a remarkable resilience during what has been a difficult year and a clear determination to move forward. Yet, it is important that the risks that seem out of leaders' control are not underestimated. One example is political risk. In our Geostrategy in Practice 2021 report, there are five key recommendations to help CEOs make political risk management a strategic priority.

One further area that may require more attention from CEOs is cybersecurity. CIOs and CTOs overwhelmingly rate it (89%) as the most relevant service required by businesses at the moment. This compares to 44% of CEOs. This discrepancy may cause leaders to rethink whether they are paying due diligence to this area. 

The will to transform

As business leaders emerge from the pandemic, they are seizing the opportunity to transform and leap ahead, or risk being left behind. Across the board, the survey demonstrates that technology and transformation services are seen as the most relevant to today’s business environment, including technology transformation, data and analytics and business transformation.

A willingness to transform and innovate chimes with the findings of our CEO Imperative Study, which found that a majority of CEOs (68%) are planning a major investment in data and technology over the next year. Furthermore, 63% revealed that accelerating technology and digital innovation is having the greatest impact on their company.

In order to highlight a commitment to ESG, companies will need to move beyond mere financial reporting and demonstrate how they are performing in terms of their employees, society and the environment and how they are fulfilling their consumers’ needs.

ESG is an area of growth for EY and a huge opportunity. We are making important strides in our understanding and commitment to sustainability and ensuring it is embedded both in our own organization and that of our clients.

To achieve long-term value, leadership needs to help ensure there are no blind spots and address the expectations of a broader range of stakeholders. In this environment, understanding stakeholders’ demands as well as delivering value for employees, customers, shareholders and the broader society will ultimately position your company to better adapt to changing market dynamics and drive greater financial value.