19 June 2020

Shaping tomorrowHarnessing productivity

in your business

Fit for Recovery

4 August 2020

Introductions and Context

Varya Davidson Ben Gilbertson

PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Are you ‘fit for recovery’?

Are you positioned to emerge stronger from the COVID-19?

What will it take for you to win in the post COVID-19 market?

What is your plan for recovery?

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Agenda

● COVID-19 impacts● Becoming ‘Fit for Recovery’● Where to from here?● Q&A

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Click here to access Fit for Recovery website

PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

PwC’s CFO survey insights

63% are planning changes to their product or service offerings to rebuild revenue streams.

5

52% of companies are embracing new ways of working - they plan to make remote work a permanent option for roles that allow it.

52%

saying they plan to improve the remote working experience.

The impact of a global downturn is a major source of worry of CFOs across industries.

50%

of CFOs report they plan to accelerate automation.

53% +of CFOs expect a decrease in revenue and/or profits of up to 25% as a result of the crisis.

75%

of CFOs who say the increased flexibility developed during the crisis is a factor that will make their organisation stronger over the long term.

65%

cited the resiliency and agility they have built.

Fewer CFOs say they are very confident about building skills for the future (45%) and identifying new revenue opportunities (27%).

There will be a growing need for new ways of working to enhance the creativity required to sustain this innovation

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Accelerated digitalisation and data relianceBusinesses with robust digital capabilities will be in an enviable position as we see accelerated demand for ecommerce and e-services.

Greater government involvementThe government will exert more influence over our lives and the economy; but what form will this take investor/owner, regulator, or reformer?

Debt and capitalIncreased levels of government support lead to higher government debt and interest payments; access to private capital may be limited.

Consumption behaviour The ‘new way of living’ will impact consumption behaviours with consumers becoming more cautious and digital.

Productive, flexible and distributed working

Increased technological competency means new high-tech skills will be required over traditional low-skill work and productivity must remain high.

Industry consolidation With such large changes to business models likely, industry structure changes will follow, resetting the basis for competition.

Resilient secure supply chainsSignificant disruption highlighted vulnerabilities and revealed exposures of the current local, national, and global supply chains.

Tax reform

With additional government expenditures to support the economy, governments will be challenged to reinvent their tax systems without stifling economic growth.

MigrationThe quantum and ‘quality’ (skilled versus unskilled) of migrants will shape productivity outcomes, and affect demand for housing and infrastructure.

Forces of change shaping Australia’s future

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Source: Strategy& Analysis

COVID-19 Recovery Opportunities

Lag

ging

Headwind

Emerging from COVID-19 (5+ years)

Str

ong

Entry into COVID-19

Healthcare Provider

Leading University

Top Australian Airline

Commercial Banks

Dominant Telco

Top Investment Bank

Medical Manufacturer

Largest Supermarket

Traditional Sport

ESports

Tailwind

Leading Miner

+

-Budget Australian Airline

SaaS Provider

computer

Build agile model to respond Drive winning position

Emerge stronger (and survive)

The opportunity – how to not waste a crisis

Bank the benefits through...

- Strategy iteration - Op model

refinement- Culture-led change

Redirect and reimagine your...

- Customer strategy- Operating model- Cost/productivity

agenda

Consolidate your leadership with...

- Refined growth agenda

- Accelerated capability build

Trigger fundamental transformation via...

- Cost structure rebuild

- Op model revamp- Culture re-set

Capture emergent op model advantage

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Radically transform your cost structure- Capture learnings of true ‘lights on”

cost base

- Lock in transformation catalysed by COVID

- Trigger rethink of strategic costs and digitisation

Reimagine your operating model- Accelerate digital business model

evolution- Adopt flexible enterprise agility- Optimise “smart” resilient supply chain

Source: Strategy& Analysis

Activate culture-led behaviour change- Lock in the bright-spots emerging through

COVID-19- Harness and optimise new ways of

remote working

Rapidly iterate and refine strategy- Anticipate post COVID-19 scenarios and redirect strategy- Redefine strategic choices and must-haves- Harness the M&A growth and divestiture opportunities

Build capabilities- Redefine differentiating capabilities

in post-COVID context- Harness the momentum created to

accelerate the digital and agile agenda

Build trust- Seize the opportunity

to lead the rebuild- Deliver ecosystem

value beyond profit

What actions should an organisation take to become Fit for Recovery?

Becoming ‘Fit for Recovery’

4 August 20206

PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020Source: Strategy& Analysis

Activate culture-led behaviour change- Lock in the bright-spots emerging through

COVID-19- Harness and optimise new ways of

remote working

Rapidly iterate and refine strategy- Anticipate post COVID-19 scenarios and redirect strategy- Redefine strategic choices and must-haves- Harness the M&A growth and divestiture opportunities

Radically transform your cost structure- Capture learnings of true ‘lights on’

cost base

- Lock in transformation catalysed by COVID

- Trigger rethink of strategic costs and digitisation

Reimagine your operating model- Accelerate digital business model

evolution- Adopt flexible enterprise agility- Optimise “smart” resilient supply chain

Build capabilities- Redefine differentiating capabilities

in post-COVID context- Harness the momentum created to

accelerate the digital and agile agenda

Build trust- Seize the opportunity

to lead the rebuild- Deliver ecosystem

value beyond profit

What actions should an organisation take to become Fit for Recovery?

Becoming ‘Fit for Recovery’

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020

Radically transform cost structure and digitise post C-19

Source: Strategy& analysis

Rationalise portfolio across brand, products and services – where applicable right-size to capital envelope

Simplify governance and entity structures to enhance decision agility

Migrate customer interactions to digital and simplify physical footprint and customer relationship structures

Re-engineer front to back customer journeys and embed new ways of working

Create an eco-system of partners and outsource providers to expand reach and access scale

Enhance culture and ways of working to improve flexibility and lift agility

Simplify enabling functions and remove shadow functions

Streamline organisation structure including reduced spans and greater project accountability

Strategic Cost and Digitisation Levers Post C-19

Portfolio decisions ...

Optimising for customers ...

Delivering efficiently ...

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020Strategy&

Trigger a re-imagination of your operating modelPwC Strategy& Approach to Contemporary Operating Models

Agi

lity

of P

eopl

e &

Cul

ture

Optimal growth path(focus on both agility of people & culture, process, & technology & architecture)

Over-focus on agility of people can create future barriers and frustration...

… if not balanced with structural improvement facilitating how people work

Agility of process and architecture

Separate ‘change’And ‘run’

Integration Platform (APIs)

State of the art IT4 IT

Participate in API ecosystem

Agile Risk & Controls

AutomatedIT controlsIaaS Micro services

architectureSoftware as a

Service consumptionInflexible

Outsourcing contractsSOA

architecture

Agile Vendors

Continuous Integration

Everythingas a service

Rationalized IT landscape

Continuous Delivery

• A short cycled rhythm or cadence of teams to review and manage issues is eminent to making distributed teams perform

• Empowered decision making and cross-functional teaming optimised to ensure that teams work on the most valuable things for the organisation as a whole

• Focus on progress (and on concrete outputs) instead of planning for perfection

Traditional Digitally Enabled(Agile Delivery)

Digitally Enhanced(DevOps)

Digitally Led(BizDevOps)

Digital Native (NoOps)

Cul

ture

, peo

ple,

or

way

s of

wor

king

Technology, architecture, process

!COVID19 has led to accelerated change from traditional to digitally enabled agile models

Temporary becomes the new normal 

?

Lessons from COVID-19 

More agility in the way people work than the traditional processes and systems can absorb

✓

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 2020Strategy&

Build Trust

Where to from here?

Have you defined the behaviours to shape your organisation post COVID-19?

Is your operating model flexible enough to be resilient in the face of future disruption?

Do you understand how radical a change you need to make? Have you explored growth through targeted M&A?

Do you have full organisational alignment on what should be your new ‘differentiating’ capabilities as digital becomes ‘table-stake’?

Rapidly iterate and refine strategy

Reimagine your operating model

Build Capabilities

Activate culture-led behaviour change

Do you have a clear approach to tackling ‘good’ vs ‘bad’ costs to balance rapid P&L improvement with sustainable recovery?

Radically Transform Cost Structure

Focusing Questions

Do you understand the impact of your choices on your ecosystem?

Do you have a plan to emerge stronger and contribute to a more productive and resilient economy?

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PwC | Shaping tomorrow – harnessing productivity in your business 19 June 202013