Responsible growth: Why it's time to go beyond the financials

Rowena Morris:

Welcome to the latest episode of our Business in Focus podcast, I am Rowena Morris and I am your host for today. Following the disruption caused by COVID-19, the strategy that businesses choose to shape their recovery and growth is a high priority on the boardroom agenda, but as we've seen in the past, growth at any cost can demand a high price in terms of reputation, and ultimately long-term success. How can businesses successfully embrace responsible growth, and what are the key strategic aspects that deliver results? In this episode, we are going to be delving into the challenge of understanding what responsible growth is and why achieving it can feel so difficult. We'll be looking across industry and society for insight into who's getting it right, and what lessons and tools can be applied to your own strategy. I am delighted to be joined today in our virtual studio by Colin Light and Caitroina McCusker. Hi Colin and Cat, I wonder if you could both give us a brief introduction, and maybe Colin, if I come to you first.

Colin Light:

Sure, thanks Rowena. Hi everyone, my name is Colin Light, I look after Strategy& and customer led transformation for PwC in the UK.

Rowena:

Brilliant, good to see you Colin. Cat, over to you.

Cat:

Thanks Rowena, hi everyone, I am Cat McCusker, I am a partner in G&HI and education leader as well.

Rowena:

Brilliant, we will start off Colin with you, the appetite for change and a focus on growth has been kicked into high gear by the pandemic. What do we actually mean when we talk about responsible growth, and why should this be in the context business leaders view their future growth?

Colin:

We've seen obviously lots of innovation during the pandemic around how corporations and government reach customers, patients, citizens, and many of those businesses have also looked to accelerate their growth during that period. What we've seen, both during the pandemic and coming out of it, is huge variability around how many of them really consider the responsible elements of that growth. By that, we mean how are they growing for the benefit of the wider stakeholders, not just their financial shareholders. Those stakeholders aren't just the customer themselves, but actually also their employees, wider society, ecosystem partnerships, technology partnerships, and so on. The key there is, how do you make sure responsible growth considers the balance across all of those stakeholders.

Rowena:

That's definitely a theme that's been coming through as we've been talking through similar sorts of topics around this podcast, around really thinking carefully who your stakeholders are. Actually, speaking with a number of clients I’ve been on, people realising that actually the stakeholder landscape is much broader, and definitely a big focus across the board in terms of really thinking carefully through that and spending quality time working through that. Cat, if I come to you, the transformation and growth agenda is also a priority across government and education, as Colin references. What are your thoughts on what we're seeing from across that industry, and how the customer is changing?

Cat:

It's become a really important issue across government, in particular, because as citizens we now have huge expectations on what we want to be seeing from government and how they engage with us on the data they're keeping on us, on the insights that that’s bringing, particularly with the younger generation, we've seen a real inversion around Maslow's hierarchy of needs. Actually, they're putting value and the impact on society and sustainability really much more of importance to them than in previous generations, so the expectations are really high. In my sector, for example, in education, they're really looking for the universities to be having real purpose driven and values outcomes for what they're going to, not just study, but what's going to be the whole environment that they're going to be able to achieve and be successful in. I really want to have that insight coming from the universities, really as young as 14 and 15, about why they're going to become a customer of theirs and how they're going to have loyalty beyond reason with that institution for many years. That's where that real ability to grow and understand the impact on societies becomes really important.

Rowena:

That's just one example there of just an approach that makes strategic sense and that's just one industry. My next question goes on to, why is it so tough to put into practice, and maybe Colin, if you could cover that?

Colin:

Most of our clients are engaging in one or more elements of growth. We think about six levers of growth. We think about customer insight and experience, we think about sales, service, marketing, pricing, and promotions, all elements around commercial, and then finally around innovation. Most often, we see clients focusing on one or two of these levers of growth, because they've identified a particular need. A really good example of this, during the pandemic obviously, is everybody rushing to look at digital commerce solutions, direct consumer, and ways of selling, which is understandable. However, the real levers of growth happen most when they're pulled together. You might not need to pull all six, and you certainly wouldn't need to do it at the same time, because of the level of change it would create in an organisation, but it is about creating the right balance for your industry, for your customers, your patients, your citizens. That is the bit that really is the unlocking of how you accelerate growth overall.

Rowena:

Really helpful to think about it with those six key pillars. I want to move on to who's really getting it right and what can we learn from those pockets of success. Colin, maybe if you could share a couple of examples, then maybe Cat, if I come to you.

Colin:

It varies enormously across different industries. If I just pick up on a couple of industries.We have seen a dramatic change in the last couple of years in the retail banking industry, for example, people like Starling Bank and Revolut, and others, have really shown what does a customer centric bank look like. How do they accelerate a very different set of experiences, a set of KYC (Know Your Customer) processes that are much more customer friendly and customer centric in the speed with which they can execute both service, and new opportunities for their own growth. But we also equally look at companies like John Lewis, actually, although they've had a very difficult time during the pandemic, and we read a lot in the press obviously around store closures, actually they have put forward a very strong vision of what responsible growth will look like for them. They have a very strong identity around the employees and partners within the group of how they look after them, and by looking after those employees, how do they in turn deliver better customer experience. That is interesting, being able to pull those things together, the understanding that there are multiple stakeholders that need to align in order to be able to deliver on those levers of growth.

Rowena:

Cat, what's your perspective?

Cat:

From the public sector side, there’s been some really interesting things that's happened, essentially over the last 12 months, coming post pandemic. What we've really seen as well is that whole sense of what data we have on our citizens, and how we are really using that, there've been some fantastic examples. Even with the increasing budgetary pressure, we're always going to have in across government, be that local or central government, but some of the major police forces, they have been really looking how do they use a bit of technology insights into data to really help them build trust in community and connections. We've all heard lots of complaints about the police not being able to respond in time, when people are making complaints that they haven't been able to drive through and actually get results. There's been, really now looking about how you can use some of these insights, to really drive those quicker results. Some of that's even coming from a lot of wearable technologies, how the police are able to record on their cameras, and not all going back in live, so that you're really getting to the heart of some of the citizens’ matters. Particularly, with our local governments, what we've seen is a real rise in that alignment between technology and people, and bringing that bigger awareness into the context for most of our cost efficiency. For example, how do we start to work much more collectively from what's happening in schools and the link to social care, how can we be really aware of that citizen, and any records or insights that we could be making better interventions on a social care agenda to really help protect vulnerable young children, and vulnerable adults, and how we'd link that through to the police side as well. We are really starting to work on that whole public sector ecosystem, really driven by citizen data as well.

Rowena:

It is so inspiring to hear some of those examples and it really brings to life what we were talking about right at the start. Having explored both the potential and the challenges around responsible growth, I'll close with a question around what's your one piece of advice for business leaders wanting to set their own strategy in place? Maybe, Cat, if I start with you.

Cat:

For me, a lot of the things really starts from the vision, it is about how can they really start to think about what we're trying to get in place here. One piece of advice I would give in regards to setting your strategy, is don't be limited by what you think you have to have and what you think that from a private sector what your shareholders want the answer to be. Really start to think about what is the art of the possible. Just to some of Colin's earlier points, you may not pull in all the levers at once, but really have that view on what each of those levers are going to be given to you over time, and how you're going to achieve it. Really focus on what's the short-term wins that you can get to make real impact for your customer as well.

Rowena:

That's great advice, thanks Cat, and how about you Colin, what's your perspective?

Colin:

For me the key is around how do you actually get the first set of changes to pay for the next set of changes, rather than trying to pull all those levers of growth at the same time, or transform your business, that's often too much to do in one go. One example of that is, for example, looking at your marketing transformational capability. Where, for example, can you either reach the same number of customers, but with less spend or use the same amount of spend to reach more customers. That can yield a benefit either in the increased revenue from reaching more customers or in the cost saving from reducing your marketing spend. There are very specific ways that we go about helping clients do that, so that they can quickly get after the decision around, ‘okay, well that's going to help our marketing transformation, but how can we then use that benefit to pay, for example, our service transformation,’ if that's what happens next in terms of the next best action for growth. Really, thinking about the sequence and starting at the very beginning with thinking, what is the responsible lens we're going to put through all of those levers of growth. Once we see clients doing that, we find the transformations are far more successful, and often far quicker.

Rowena:

I really like thinking about it in the way of those three questions that's really helpful, thanks Colin. That draws us to a close of another episode of our Business in Focus podcast. Thanks so much Colin and Cat for a fascinating discussion, and of course thank you to everyone for listening. If you'd like to explore how to start putting your own responsible growth plans in play, as part of a wider transformation agenda, visit Beyond Change at pwc.co.uk/issues/transformation. Finally, don't forget to subscribe to keep up to date with all of our future episodes. Thanks everyone, and please tune in again soon.

Participants

• Colin Light
• Cat McCusker
• Rowena Morris