The four key challenges of business

It can feel like COVID-19 has changed everything about business.

But, after some big changes to the way we work, many organisations are now doing business safely and successfully, and thinking about what comes next.

Preparing for future disruption is top of mind, as is how to cope with the other challenges impacting organisations today.

In the Vodafone Business Future Ready Report 2020 we set out to discover which businesses are most confident and well-prepared for emerging trends, challenges and possibilities, and what they’re doing differently to the rest.

We call them ‘future ready’ businesses (FRBs).

Compared to their peers, these businesses are taking a very different approach to the challenges of the current environment and as a result are coping much better during the pandemic.

In our research, we found five key challenges facing every business. Resilience is covered here. In this article, we’re looking at the other four challenges and highlighting small and medium enterprises. Comparing them to their larger competitors and looking at what they are doing to prepare themselves for the world of tomorrow.

1. More powerful consumers

We know keeping customers happy has always been critical. But, in this digital age, it’s easier than ever for consumers to compare products and alternatives.

Because of this, 88% of ‘future ready’ small and medium businesses believe that customers are growing in power and almost half of ‘future ready’ SMEs are already seeking data-driven insights (45%) to understand and meet rising customer expectations, which includes growing demands for social responsibility.

Most ‘future ready’ businesses (87%) say that customers are increasingly demanding of brands to act ethically or have a purpose beyond profit.

For small businesses, 54% say that their customer’s preference to buy from or work with socially responsible organisations is one of the top three reasons for changes in their organisation. This is joint first with a genuine sense of moral obligation.

Understanding the customer has been a strength of smaller businesses for a long time – and it’s more important now than ever before.

2. Sustainability as standard

Sustainability is high on the agenda too. As customers and society become more aware of their environmental footprint, and work to minimise it, businesses are expected to do the same.

Many organisations are taking steps to get on top of this, such as adopting a ‘paperless office’, reducing the amount of employee travel and donating to environmental charities.

The majority of SMEs (67%) are using the most energy-efficient technology available. And the main driving force for more than half is a genuine sense of moral obligation (40%), as well as the fact that customers prefer to buy from sustainable organisations (37%).

3. Deciphering the digital economy

The good news is that small and medium-sized businesses are even more aware of the possibilities of the digital economy, putting them in a strong position compared to larger counterparts.

90% of ‘future ready’ SMEs agree that data is becoming an increasingly important strategic asset. That’s compared to 79% of SMEs overall.

There are obstacles as well as opportunities though – including lacking the resources to keep up.

Nearly half of SMEs believe that a shortage of technical skills will be one of their biggest talent challenges in the future (43%) and just under a quarter of all SMEs (22%) feel ‘less than reasonably well equipped’ to securely store and process data.

SMEs that are ‘future ready’ are more likely to be aware of the power of data, both for business strategy and public health.

The majority of these SMEs say data is key to being able to make the best commercial decisions.

4. Tackling talent challenges

Talented staff are key to business success today – but smaller businesses are having to contend with significant skills shortages.

To solve this, many SMEs are focusing on upskilling to strengthen their talent pool by investing in retraining staff.

They are also changing the way that they recruit, targeting a neuro-diverse range of candidates (26%) and a wider range of ages (40%). Something we found larger companies are exploring too.

And providing the right working environment will be key as training, technology and flexibility start to outrank career prospects in importance. As such, all businesses are now concentrating on offering good training and flexible working hours in order to attract and keep staff.

What’s clear is that making changes now can help you flourish in the future.

To learn more about how ‘future ready’ businesses are doing things differently, explore the full Vodafone Business Future Ready Report 2020.