Suits the C-Suite

06 September 2021

Marie Stephanie C. Tan-Hamed

Changing the game with digital ecosystems (First Part)

(First of two parts)With the continuing uncertainty present in the global economy, digital transformation continues to be a business imperative for companies seeking to create long-term value, secure a competitive advantage, address more rapidly evolving consumer expectations and transform in preparation for the period of recovery. The need to physically distance for safety has deepened the need for digital interaction, online consumerism and new technology platforms. This shift in industry dynamics has blurred the boundaries between industries, leading to the emergence of digital ecosystems.According to the new EY study, Building successful digital ecosystems in Southeast Asia, digital ecosystems are becoming a competitive game-changer. A digital ecosystem is formed through a combination of strategic partnerships and platforms in the form of omnichannel architecture that delivers value to consumers through personalized products and services. By presenting an interconnected set of offerings composed of businesses across different sectors, a digital ecosystem can fulfill consumer needs in one integrated experience.A digital ecosystem is not just about a partnership or merger and acquisition (M&A) — it is about building a truly integrated network of enterprises that encourages and facilitates the sharing of applications, technology infrastructure and data. The shared elements of a digital ecosystem enhance and complement each other, resulting in improved innovation, trust and digital experiences.Organizations need to map their roles in a digital ecosystem as well as monetize the digital ecosystem to drive sustainable growth. To create an effective digital ecosystem roadmap and strategy, companies must take three considerations into account before embarking on their digital ecosystem journey. This article will discuss the first two: evaluating the digital ecosystem maturity of the organization and defining the business model.EVALUATE THE DIGITAL ECOSYSTEM MATURITY OF THE ORGANIZATIONWhile digital ecosystems present myriad opportunities to all value chain participants, there are also various hurdles that need to be overcome before reaping the benefits of a digital ecosystem. Companies often find it a challenge to choose the appropriate role for them and the path to achieve it. This makes a robust digital ecosystem strategy critical for every organization regardless of where it stands in its digital ecosystem journey.As part of devising a digital ecosystem strategy, organizations need to understand the different maturity levels to be traversed in the digital ecosystem journey, and assess where they lie on the maturity curve. These are based on the digital capabilities a business has developed and the level of transformational impact it creates. There are three maturity levels to consider: digital ecosystem adaptor, digital ecosystem accelerator, and digital ecosystem attacker.Most organizations start at the digital ecosystem adaptor level, where the transformation of an organization is at a modular level and is limited to a particular geographical market or business unit. The transformation initiative may be in the form of a pilot program, or the company leveraging partnerships and platforms to create value for its customers.The next stage is the digital ecosystem accelerator, where the organization scales the transformation to a company and industry level, adding more digital capabilities and creating value from the platform economy. This can disrupt the respective industry of the company as it redefines how business is conducted by being a pioneer.An organization at the level of a digital ecosystem attacker drives large-scale transformation across multiple industries, leveraging cross-sector collaboration and technology capabilities across various parts of the value chain. The transformation of the organization at this level utilizes multi-platforms, omnichannel plays and super apps, with strategic partnerships across different industries and geographies.The impact and value brought by an organization into the digital ecosystem broadens from the company level to an ecosystem level as it moves from being an adapter to an attacker. As with any maturity model, organizations at the first stage must transform themselves before transforming their industry and ecosystem in the last stage.DEFINE THE BUSINESS MODELAfter assessing and determining their own digital ecosystem maturity level, organizations need to identify the business model to leverage as a digital ecosystem participant based on parameters such as the nature of the ecosystem, the scale of industry partnerships and the revenue model.Businesses that are just starting out on their digital ecosystem journey usually leverage pilot programs to develop a coherent set of digital solutions through partnerships. At the next level, platform-based businesses must look to connect multiple stakeholders across different industries through a marketplace model. One such example of this is ride-sharing apps that expanded into adjacent segments of food delivery and payments. Businesses at the digital ecosystem attacker level will utilize a multi-platform model, which can be transformed into a single source capable of offering products and services from different industries in one seamless, integrated experience.Businesses can define their business model as a digital ecosystem participant based on three archetypes, each defined by the stages of evolution within a digital ecosystem: the digital ecosystem pilot, platform, and super app or multi-platform.The digital ecosystem pilot archetype creates a coherent solution by digitalizing product capability with new functionalities through digital partnerships. It is orchestrated by the core firm, internal business units or its incumbents, and requires digital ecosystem adapters to launch.The platform archetype offers a single platform that seamlessly connects users and is orchestrated by single platform companies. This archetype requires digital ecosystem accelerators to launch.The super app archetype focuses on integrating several platforms into one service and captures user data from their integrated platform. This archetype is orchestrated by multiplatform companies with large investments or capital and requires digital ecosystem accelerators or attackers to launch.In the second part of this article, we will discuss the considerations in implementing and mobilizing the ecosystem. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Marie Stephanie C. Tan-Hamed is a Strategy and Transactions Partner of SGV & Co.

30 August 2021

Wilson P. Tan

The V in SGV

The S in SGV was a business icon in the person of Washington SyCip. Last June 30, SGV celebrated his centenary which coincides with the Firm’s 75th anniversary.On August 26th, SGV celebrated another centennial milestone — that of our Co-Founder, Alfredo M. Velayo. They were born just 57 days apart in 1921. The two met when they were five years old on the first day of First Grade in P. Burgos Elementary School. They then remained friends for the rest of their lives — they were the original BFFs even before the term was coined.Mr. SyCip convinced Mr. Velayo to return to the Philippines after the Second World War. Mr. Velayo had migrated to California with his young family at the time. Seizing the opportunities of post-war reconstruction, Mr. SyCip had started a one-man accounting firm in 1946 and not long after, wrote to Mr. Velayo to join him. That historic correspondence is considered the firm’s first recruitment letter and is now proudly exhibited in the SGV Museum.Together, Mr. SyCip and Mr. Velayo worked hard to grow the company. They shared the same values of integrity and excellence; the same vision of helping in national development; and above all, they shared the same deep love for the Filipino people. In just two decades under their joint leadership, SGV had grown from 5 people in a one-room office to more than 2,000 professionals in member firms throughout Southeast Asia called The SGV Group.The growth of SGV was phenomenal and it can be attributed to the balance that Mr. SyCip and Mr. Velayo brought to the practice. Each of them had their roles cut out for them. While both were heavily involved in client work, it was Mr. SyCip who focused on much of the external requirements of the young firm. On the other hand, it was Mr. Velayo who was depended on to take care of the house. He was affable and his winsome ways encouraged a familial work environment. He took very seriously his role as mentor and steward. His legacy in this respect is embodied in SGV’s Purpose to nurture people and leaders. In fact, when people think of Mr. Velayo, the first thing that they recall is the largeness of his heart.While Mr. Velayo retired from SGV when he was only 50, his presence was larger than life in SGV. He would faithfully attend all our events and he also chaired the SGV Foundation. He was also a client of the firm and that is how I personally got to know him. Two months ago, I had shared in this column some of the life lessons learned from Mr. SyCip. Here are some nuggets of wisdom that Mr. Velayo imparted to us. The first is to strive for perfection.Mr. Velayo was a man of precision — he always started and ended every activity on time. He was also a man of accuracy, which can be attributed to his being an accountant. Many who had worked with him in numerous Boards recall how he would come prepared for every Board meeting with questions that demanded exact answers. Being an eloquent person, he was impatient with people who could not articulate themselves properly. Mr. Velayo was also always impeccably dressed and looked like a movie star. The second lesson is to care for your people.While Mr. Velayo believed deeply in the value of hard work, he believed even more strongly in the importance of taking care of his people in SGV. He focused on finding ways to bring out the best in people and letting their inner strength shine through. He famously said that SGV does not give people jobs, they are given brighter futures.Caring for others can also be shown in small acts of kindness. He would tell us that little things matter — a lot. Take, for example, a thank you note to someone who had given you a gift or had done something nice. That short scribble can go a very long way. The third lesson is to give back or pay forward.When Mr. Velayo retired from corporate life, he didn’t stop working. Instead, he directed his formidable energies and intellect to finding ways to help and create opportunities for those in need. Not only was he the chair of the SGV Foundation, he also became president of the William J. Shaw Foundation. Both foundations support public educational institutions among many others.Looking back on his roots, Mr. Velayo was also inspired to support the schools that gave him and Mr. SyCip their educational foundations. At his instigation, they made numerous donations over the years to the P. Burgos Elementary School, the Victorino Mapa High School, and the University of Santo Tomas (UST).His passion for education shone through both as a student and teacher. During his early years in SGV, he would teach evening classes in UST. Little did he know that more than 60 years after he graduated from UST, the school would honor him with the creation of the University of Santo Tomas — Alfredo M. Velayo College of Accountancy — an institution that now carries on his life’s vision to educate and care for future generations. The fourth lesson is to have a sense of humor.This was his trademark — he loved to make people laugh. While he was very serious when it came to business, Mr. Velayo always managed to see the lighter side of things. He never ran out of jokes and anecdotes on any occasion. Of course, some of them were recycled over time but, because of his masterful storytelling, everyone would always end up in stitches. Mr. Velayo enjoyed the company of people. He would host luncheons or dinners for small groups where he would narrate his fascinating life stories peppered with jokes.The V in SGV is no other than Mr. Alfredo Velayo. The V in SGV stood for his vivaciousness and vitality. The V in SGV represents his values of integrity, excellence and compassion that have endured the test of time. The V in SGV is the vision that our co-founders so carefully crafted and worked for which is to nurture Filipino professionals who can contribute to national development.Thank you, Mr. Velayo, for your legacy that continues to inspire us in our SGV Purpose to help build a better Philippines. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Wilson P. Tan is the Chairman and Country Managing Partner of SGV & Co.

23 August 2021

Julie Christine O. Mateo

The certainty of Purpose

Every day, the volatility and uncertainty we see in the world continues to grow. People, organizations, and even countries are grappling with increasingly complex disruptions caused by the COVID-19 pandemic, and it often feels like we are constantly one step behind the changing times. However, while the global situation remains unpredictable there IS something that can provide us clarity and certainty — and that is Purpose.The global COVID-19 pandemic has revealed underlying weaknesses and vulnerabilities in many organizations. Many companies were caught off guard and needed to scramble to cope with new challenges, not just to growth, but even to survival. As we’ve discussed in previous C-Suites articles, companies are already rethinking how they work and the value they bring to their customers in the new normal and post-pandemic. For some, this has involved a reevaluation of their Purpose.To be clear, an organization’s Purpose is not just tested during times of crisis. It is an ongoing journey that companies need to undertake each and every day in the fulfilment of the organization’s collective “Why.” But we also need to see that a Purpose can resonate even more deeply when people struggle to find meaning in why they do what they do and the difference that it makes. It is a roadmap that reinforces the company’s values, gives weight to sacrifice, and encourages people to see the bigger picture. A Purpose acts like a North star — a beacon that can guide an organization’s people through dark times. Purpose is not a mission, vision or strategy — these can change over time. True Purpose endures and can provide clarity and conviction when we need it the most.DOES IT RESONATE WITH PEOPLE?A Purpose has to appeal to people on various levels — rational while being emotional, ethical yet strategic, important and enduring. It helps to state a core issue or challenge that the organization wants to address, and not simply make statements about their products or services. Sometimes, it also helps to go back to the organization’s roots and why it was founded. It also helps if the Purpose clearly illustrates the company’s identity in some way — does it reflect the interests and priorities of a company’s leadership? Does it include any metrics beyond financial value? Does it resonate with your people on a deeper level, and bring truth to what you wish to achieve?In SGV, for example, our Purpose to nurture leaders and enable businesses for a better Philippines is anchored on the bedrock of the vision, values and real-life examples of our founders and generations of alumni. The ideals of developing people, helping companies thrive and doing our part for our country and communities are already in our corporate DNA. By anchoring and articulating our Purpose on our roots, we provide our people with a familiar roadmap that feels achievable and something that they can actively contribute to.DOES IT ARTICULATE YOUR WHY, WHO AND HOW?WHYAuthor and motivational speaker Simon Sinek’s book Start With Why: How great leaders inspire everyone to take action illustrates the importance of clearly communicating and stating the WHY behind the company’s existence. The WHY (provide a better way of life, creating healthier communities, create a more inclusive society) is more effective than merely stating WHAT (produce high-quality, low-cost goods, provide seamless services) the company does. In addition, many organizations with a powerful and motivating Purpose put people, both within and outside the company, at the heart of all their efforts.WHOA Purpose should clearly state who the organization aims to benefit beyond its shareholders. It is important to state or demonstrate how the organization’s work can benefit those beneficiaries. The beneficiaries can be as specific (marginalized women, small and medium enterprises, primary school children) or as general (healthy communities, a better country, every home) as the organization wishes. However, it should also be authentic and believable to be acceptable to your people and the public.HOWTo round out a Purpose statement, it should also clearly state “How” it intends to achieve its “Why” for its “Who.” This is often where organizations stumble as they strive to find the balance between being too abstract (becoming a world-class company, promoting innovation) or too specific (manufacturing cars, creating devices). Organizations that can find that “sweet spot” where a concrete, measurable and definable “How” can be communicated are more likely to crafting a powerful Purpose statement that will inspire people to truly embrace, act on and advocate it.DOES YOUR COMPANY CULTURE DEMONSTRATE IT?A unique and powerful Purpose can not only unite the people in your organization behind a personally meaningful, inspiring and achievable vision for the future, it can also provide a competitive advantage as it translates into better employee engagement, stronger commitment and more focused efforts and initiatives for the organization.However, it has to be authentic and believable, and it must necessarily permeate the organization from the top down. As stated in an article by EY Global, Why business must harness the power of purpose, for purpose to truly matter, it must go beyond any single initiative that sits on the margins of an organization. It must be driven operationally by the leadership team, and supported with training, performance metrics and talent management. Purpose also has to continually and organically suffuse every aspect of the organization, and should be constantly part of the dialogue between the leadership and the people in a company.Purpose, by itself, will not take the place of strategy or planning, but it does intensify the will and intent behind them. It is also a continuing journey, one that everyone in an organization needs to constantly work together to truly achieve. By leveraging and truly embodying the power of Purpose, business leaders can help their people find certainty and assurance in an uncertain world. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Julie Christine O. Mateo is the Talent Leader and Purpose Council co-chair of SGV & Co.

16 August 2021

Noel P. Rabaja

Repositioning for growth beyond COVID-19

More than a year into the COVID-19 pandemic, it is apparent that the impact of this global health crisis has far-reaching implications. Countries are still battling to contain the virus and businesses continue to adapt and find ways to address the resulting disruption. According to the EY Global Capital Confidence Barometer, 92% of global respondents reported a negative impact on their profitability due to COVID-19. For companies to thrive in this disruptive and rapidly changing landscape, looking beyond the immediate challenges is key — companies need to also seize the opportunity to transform and make long-term, strategic decisions on how to reframe their future.To accomplish this, it is important to be able to distinguish between temporary shifts in behavior and enduring changes. Companies have to focus on key trends that had been shaping up even before 2020 but were accelerated by the pandemic, and which will significantly impact how business is conducted. These trends were identified in the EY article, How companies can win in a dislocated economy. Companies need to consider these key trends in their strategy in order to reposition themselves for growth beyond the pandemic and achieve long-term success.DIGITALIZATIONEmerging technologies such as data analytics, artificial intelligence and robotics continue to have a transformative effect on companies regardless of their size, and across all aspects of business. As technological disruptions continue to arise today even under the shadow of the pandemic, companies will need to fully embrace digital instead of adopting it in silos. They need to incorporate it into their culture and corporate strategy, as well as allocate resources to accomplish their digital transformation goals.The 2020 study EY-Parthenon Digital Investment Index found that companies that achieved higher returns on their digital investments have better technical execution and clearer strategies. These digital leaders reported stronger revenue growth in the past two years and expect to sustain this growth in the future.ESG AGENDAThe pandemic has also heightened awareness of environmental, social, and governance (ESG)-related risks. As a result, there is increased pressure from stakeholders for companies to review their efforts to address global challenges such as sustainable growth and climate change. Businesses are driven to take action on these issues by rebuilding a stronger post-crisis business landscape underpinned by sound ESG principles.Companies that prioritize the ESG agenda benefit by driving improved financial returns and simultaneously making a better overall impact on the world as they do business. Research has proved that ESG initiatives positively correlate with the performance, financial value and reputational value of a company to investors. A University of Oxford study reveals that 88% of companies with robust ESG practices also demonstrate better operational performance.Given how wide the scope ESG can be, it may be a challenge for some companies to identify specific priorities and focus areas that can best deliver material sustainability, yet the data show that this is a necessary step for continuing growth.SECTOR CONVERGENCESome sectors did better than others in recovering from the uncertainty of COVID-19, resulting in uneven K-shaped recovery that is pushing sectors to converge as they push to survive. Lines between sectors such as media, telecommunications and healthcare were blurring even before the pandemic, driven by changing consumer behaviors and technological advancements. Digital ecosystems now connect very different stakeholders, indistinguishably linking insurers, governments, healthcare providers and consumers.We are already seeing this trend in our own market where, for example, we see a telecoms provider bundling healthcare and COVID-19 insurance into its packages, in addition to traditional voice and data plans. Similarly, some insurance companies are found on online retail platforms to market their products.Moving forward, companies will have to determine the impact of sector convergence upon their operating environment and find ways to rise past the challenges that emerge while also creatively coming up with adjustments to existing business models so that they can better capitalize on resulting new opportunities.CHANGING GEOPOLITICSThe pandemic exacerbated an inward-looking approach for several countries, impacting how governments made policies in their efforts to protect their citizens, create more jobs and address falling economies. However, Southeast Asia saw an opposite trend where countries like Vietnam and Indonesia liberalized their laws to attract foreign investment. In the Philippines, there is also a move to liberalize foreign investment in certain industries through the proposed amendment of the Public Service Act, Retail Trade Liberalization Act, and Foreign Investment Act.Global leadership is also simultaneously becoming more multipolar as the US, EU and China emerge as competing powers. Smaller countries will have to align their activities to address changing global dynamics, while companies need to focus on applying and building resilience into their supply chains to anticipate the disruption from geopolitical shifts.REPOSITIONING FOR GROWTH BEYOND THE CRISISCompanies need to consider these key trends in developing their blueprints for recovery and growth. However, they will find that there is not one formula that can fit all, and that the right strategy will vary across industries.Businesses from any sector can nonetheless reposition for growth amid the current economic landscape. To do this, companies need to adopt proactive strategies based on a strong understanding of the key trends as well as the resulting sector dynamics and rapidly changing market landscape. These proactive strategies include taking bold decisions to transform existing businesses or transact through acquisition or divestment. Acquisition can help the company expand its capabilities or reach new markets and accelerate growth, while divestment can help build resilience. Past experience shows that companies who made the early bold choices — particularly acquisition or divestment — during crises had significantly higher total shareholder return over time, even if this meant taking an initial hit on their cash flows. These bold strategic decisions can create competitive advantage and long-term value to the business beyond the crisis.By integrating the key trends into their growth strategies and identifying the right path to follow, companies can reframe their future and emerge stronger in the period of post-pandemic recovery. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Noel P. Rabaja is the Strategy and Transactions Leader of SGV & Co.

09 August 2021

Lisa Marie T. Escaler

Reimagining the future of work (Second part)

(Second of two parts)While many organizations have embarked on implementing more agile, people-centric and digitally-enabled workplaces, these same enterprises were not sufficiently equipped to deal with the rapid proliferation of COVID-19. After more than a year of adapting to the new normal and transforming how we work, it became evident that employees, workplaces, and the future of work have changed in significant ways that we could not have previously imagined. According to the EY 2021 Work Reimagined Employee survey, which comprises the results of interviews with more than 16,000 employee respondents across 16 countries, employees are fully embracing the flexibility that has made remote work possible, with 48% of respondents believing that their company culture improved during the pandemic.In the first part of this article, we discussed how companies need to understand the new normal worker, enabled by technology. In this second part, we continue by determining when and where work can be done in terms of remote and hybrid workspaces, and the necessity of making data-driven decisions fueled by workforce insights.WHEN AND WHERE CAN WORK BE DONETransitioning to video conference meetings and online chat presented a number of challenges. Employees reported varying levels of distress learning to manage remote work and work-life balance, such as a lack of boundaries, losing track of time over days and weeks, and feelings of isolation. These were the most common concerns raised in an EY Work Reimagined Leader’s Forum in the discussion on the challenges posed by remote work. In the survey, 78% employees and leaders responded that they felt the increased pressure to be constantly connected to their jobs.Up to 77% of survey participants also selected the loss of human connectivity as their top concern about increased technology adoption and agile working. This indicates that human connections still matter — and are perhaps even more important now as many employees globally face limitations on mobility, travel and returning to physical work spaces.In light of this, companies should consider incorporating “digital well-being” into their technology and tools to help employees manage remote work, such as leveraging fitness apps or digital fitness programs and emotional well-being apps to sync with enterprise technology. This technology aims to give employees insight into when they need to recharge and disconnect.Leaders designing remote and hybrid work strategies will want to position employee well-being at the forefront. They will need to understand what well-being features available in enterprise tech can benefit their employees and, concurrently, reinforce leadership communications that emphasize how they prioritize and support the well-being of their people. Despite the widespread adoption of remote work, survey data indicates that most employees are still not ready to embrace a completely virtualized work experience. The study shows that two-thirds of respondents wish to resume some form of business travel, and that a large majority of employees would prefer to work in the office two to three days a week once it is safe to do so.Many corporate leaders are already creating hybrid workplace strategies that bring together remote and in-office work. However, the hybrid work model risks falling flat unless the purpose of the office is made clear: as a place that helps people accomplish their best work and create meaningful connections. Employees enabled by technology have already realigned their working style to be more agile and flexible. New tools and technologies have already set the workforce on a new trajectory underpinned by flexibility. Based on the EY survey results, tomorrow’s employees will likely desire more freedom to design their workdays and meet virtually or in-person when needed to innovate and collaborate. In brief, employees want the flexibility to choose where and when to work while assisted by technology at all end points.To capitalize on this trend, the Chief Human Resources Officer (CHRO), Chief Technology Officer (CTO) and the Head of Corporate Real Estate should deliberate and consider how future work models can offer diversity and flexibility while encouraging a diverse and inclusive workforce, finding a good balance among location, technology and human interaction to bring out the best in their people.MAKING DATA-DRIVEN DECISIONSLeaders now have access to technology to drive their organizations forward, becoming increasingly accustomed to written communications and virtual appearances. The increased deployment of survey technology also allows leaders to align more quickly to their company purpose and employee needs.Leadership communication has improved in terms of expressing empathy, trust, and support, according to one comment at the EY Work Reimagined Leader’s Forum. The pandemic had a humbling effect on everyone, especially leaders, leading people to be kinder and more considerate under the collective challenges that we are all experiencing today. Technology rapidly broke down barriers between leadership, management, and employees, allowing leadership to sustain a more positive culture that saw gains in 2020.Technology leaders and the CHRO can support leadership by exploring technologies that can measure sentiment in real time during leadership video messages and livestreams. It will be important to constantly listen and collect workforce feedback to provide leadership with timely insights. Moreover, it’s no longer enough for leaders to delegate digital leadership — leaders must understand the interplay between technology and megatrends to enable their businesses to deliver long-term value and remain relevant post-pandemic.THE WORKPLACE OF THE FUTUREThe future of work, where we work and how we respond to work have all been transformed by technology, and organizations that navigate this seismic shift can successfully take advantage of its transformative opportunities. Leaders will need to continue assessing how the new ways of working can further enhance productivity among their employees to make more informed decisions about what can be kept or improved. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Lisa Marie T. Escaler is the People Advisory Services – Workforce Advisory (PAS WFA) Leader of SGV & Co.

02 August 2021

Lisa Marie T. Escaler

Reimagining the future of work (First part)

(First of two parts)While many organizations had previously embarked on implementing more agile, people-centric and digitally-enabled workplaces, these same enterprises were not sufficiently equipped to deal with the rapid proliferation of COVID-19. After more than a year of adapting to the new normal and transforming how we work, it became evident that employees, workplaces, and the future of work have changed in significant ways that we could not have previously imagined.According to the EY 2021 Work Reimagined Employee survey, which compiles the input of more than 16,000 employee respondents across 16 countries, the workforce has positively adapted to the uncertain circumstances in real time. On a 1 to 10 scale, almost 75% of employees rated their job satisfaction at a 7 or above. Employees are fully embracing the flexibility that has made remote work possible, with 54% indicating that they would leave their company if the same flexibility in work location and scheduling is not extended post-pandemic. Despite the lack of physical connection between employees, 48% of respondents believe that their company culture improved during the pandemic.Because the data indicate that workforce needs are changing to adapt to the present circumstances, there is an opportunity for leadership to reimagine the future of work. Though employees value their new levels of flexibility and appear to be equally productive working from home, we’ve yet to determine the long-term effect of remote working. There is also less clarity surrounding how much is lost from the lack of in-person engagement and interactions, especially in terms of coaching and mentoring.To deliver long-term value for employers and their employees, organizations will need to consider three critical courses of action: gaining deeper insight into the transformed employee experience; enhancing the collaborative needs of employees through remote and hybrid working environments; and supporting leadership with workforce insights.UNDERSTANDING THE NEW NORMAL WORKERVirtual collaboration has become the norm in enterprises across multiple industries and internally across functions from operations to innovation, with organizations leveraging technology to shift manual processes and workflows to a virtual platform. With an increase in adoption rates, user data and resources, tech companies have capitalized on the opportunity to evolve and enhance their offerings. Tools enabled by cloud technology are now ubiquitous, with new collaboration software features such as reactions, cross-platform sharing, and image filters digitizing the human connection. Organizations are exploring how to better leverage cloud technologies to deliver enhanced employee experiences to retain high employee engagement rates.Employers who initially expressed skepticism about maintaining the productivity of tech-enabled remote work can now objectively view the data that indicates that productivity remained high after a full year of working from home, according to the 2020 Harvard business review study, “Research: Knowledge Workers are More Productive from Home.” While the long-term productivity implications of working remotely remain uncertain, EY survey participants responded positively: 65% agree that remote work enables better productivity, and 66% believe that their productivity can be accurately measured regardless of where they work. Now that employees are aware that their work does not have to be limited to specific locations, they want their employers to provide them with more technology, benefits, and support to further improve their remote working experience. They have expressed their desire for reimbursement for hardware and home office setups, followed by training for remote presentations. In certain countries like the Philippines where a stable internet connection is not always guaranteed, some employees are also looking to their leadership to provide solutions to their data needs so they can work more effectively.With a vast range of tools, technology and platforms available to the workplace, HR and technology leaders should assess which of these add the most value and identify which of these are the most pragmatic to deploy given their unique culture and business model, while mapping out their new enterprise tech stack. EY Global Technology Consulting Leader Dan Higgins believes that leaders will likely uncover surprising findings that show how new tech impacts employee experience and retention. He added that 40% of employees want their organizations to offer better communication and collaboration tools to boost their productivity.To achieve this, Chief Human Resources Officers (CHROs) and Chief Technology Officers (CTOs) need to collaborate to assess their workforce and garner insight into how tech enables and transforms the employee experience. They will need to understand how tech enhances inclusive contributions and ideation in areas of collaboration and team dynamics, while also remaining aware and prepared as new cybersecurity and technology-related risks arise.After assessing how the new ways of working and rapid adoption of technology impact employee productivity, leaders will also need to better understand and potentially expand employee expectations around flexibility. The transformational journey will have implications on how office spaces can be configured to encourage certain work practices and better support the physical and mental well-being of the workforce.In the second part of this article, we discuss how to optimize work in the use of remote and hybrid workspaces, and the necessity of making data-driven decisions fueled by workforce insights. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Lisa Marie T. Escaler is the People Advisory Services – Workforce Advisory (PAS WFA) Leader of SGV & Co.

26 July 2021

Karen Kaye M. Sta. Maria-Constantino

Reimagining healthcare

A year and a half into the pandemic, we have seen how almost every industry has had to undergo rapid transformation in order to develop new methods of product and service delivery. One industry that has perhaps been forced to rapidly move beyond traditional processes is healthcare. In the Philippines, we have seen a dramatic shift to using technology to promote telemedicine and virtual healthcare to allow for personalized, effective and convenient healthcare in socially-distanced safety.However, developments such as video or online consultations serve as a beginning, not an end point. Companies now have the opportunity to permanently transform how healthcare is delivered in a way that addresses the increased needs of care providers and their patients. To tackle the evolving needs of consumers, we look at three key areas identified in an EY article, Five trends redefining the health sciences and wellness operating model that companies should closely consider in their strategic focus and in the deployment of their human and financial capital and efforts.DEVELOPING INTEGRATED SOLUTIONS AND PERSONALIZED HEALTH OUTCOMESThe current health infrastructure is provider-driven, supply-oriented and siloed, placing consumers in a disparate model. In the future, consumer demand will drive a seamlessly connected healthcare system with humans at the center, delivering a personalized and informed experience. Imagine, for example, a one-stop system where a patient only needs to use one platform for initial consultation, treatment, the delivery of medication and follow-up consultation, all with centralized medical record access.While such a platform is yet to be developed, Philippine healthcare providers can start reimagining a future where technology and patient-centricity can drive a competitive advantage. Such a patient-centered model will require aggregated data that is shared to fully understand and more quickly respond to the needs and wants of a patient. Healthcare will have to take a more proactive role, bringing care to a patient instead of forcing a patient to spend time, money and energy searching for the care they need.For companies to put humans at the center, they must partner or collaborate with companies to gain capabilities in user-centered design, behavioral science and services. They can also build or employ the services of experts in artificial intelligence and machine learning algorithms as well as interoperable system integration. Already there have been several developments around the world in using AI to provide personalized healthcare, such as the launch of a cloud-based platform by one company to help patients manage chronic disease by managing both medication and patient responses to the medication remotely. Another is developing a system to conduct liquid biopsy and remote monitoring so that patients do not have to go to a hospital and undergo invasive tests. Another system does real-time monitoring of patient biometrics, allowing for a quick response in case of a medical situation.While such technologies may not be immediately available to Philippine healthcare providers, the continuing development of 5G technology and other innovations here could open the door to rich opportunities that healthcare providers can explore as part of their post-pandemic strategies.OPENING UP ACCESS TO DATAIt has been estimated that humanity generates up to 2.5 quintillion bytes of data each day. For the healthcare industry, an estimated 50 terabytes of data were created in 2020 alone, and the number is expected to increase exponentially as the effects of the pandemic continue. However, having all the data means little if we cannot properly analyze the information. Most of the data generated by the healthcare industry sit in siloes every year, but the difficulty in extracting the information’s true and extended value lies in various technical and ownership issues as well as regulatory reluctance. In addition, most companies tend to be very protective of their data, considering the information a source of potential intellectual property assets and new discoveries.However, the reality is that no single company is able to or should own more than a fraction of the total volume. At the same time, the monetary value of proprietary data is significantly less than the data that a company can actually access, interrogate and apply to the operations and product development. Simply owning data generates costs but accessing and assessing data can generate valuable insights for the health system. Moreover, refusing to share or grant access to data impedes meaningful progress in healthcare.While this is certainly a thorny conundrum, it is something that the healthcare industry should explore. Two key questions come to mind: How can companies mine their data to get the right information that is critical to their business model, and how they can share access to their data with selected, tightly regulated partners so that more long-term value can be gained by combining resources, knowledge and insight?Answering these will take time, investment, and no little amount of compromise. But consider the possible discoveries in such a situation. For example, a hospital that shares data on the most and least effective COVID-19 treatments and medication with a company that manufactures diagnostic machines might be able to develop more effective, life-saving technology. Or if we wish to consider recent news, there has been talk of combining various vaccine brands to achieve a greater protective effect — this is a potentially game-changing area where sharing and combining data could have incredible benefits.Of course, companies will need to develop structured data system arrangements to protect proprietary data while allowing access to vetted companies. They will also need to work with government, regulators and data security experts to establish norms that are acceptable and fair to all parties and while protecting data integrity. In addition, healthcare companies may need to retrain or acquire talent that can develop proprietary data processing technologies to help speed up the R&D process.BUILDING SUSTAINABILITY INTO OPERATIONSAn EY survey with almost 15,000 respondents discovered that up to 45% of consumers believe in the increased importance of sustainability compared to a year earlier. In the Philippines, we hear about the challenges that medical facilities and providers are now having in dealing with medical waste and used protective equipment. Consider as well the number of disposable syringes that are being consumed daily all over the world due to vaccination and we can better realize the increasing need for companies to measure and report sustainability practices tied to environmental, social and governance (ESG) disclosures.Though it may seem obvious that products and services that help people treat or manage disease have significant social value, more and more people are also weighing the import of environmental and economic issues.For companies to demonstrate their commitment to sustainability, they need to establish a measurement framework to gauge the impact of their sustainability programs based on their business model, and also be able to communicate the value of their sustainability initiatives to their patients, customers, stakeholders and investors.ACCELERATED TRANSFORMATION FOR BETTER HEALTHCARE DELIVERYCOVID-19 has highlighted the gaps between what companies are capable of now and what they will need to accomplish for future growth. With the acceptance and adoption of new technologies fueled by data and driven by consumer demand, companies in the healthcare industry need to start reimagining how they can generate innovative, long-term value for their business and use that to springboard into post-pandemic recovery.The pandemic is not the first, nor will it be the last, major disruption that will trigger forced transformation and evolution for companies. While we cannot predict what the future may bring, we can certainly reimagine how it should be. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Karen Kaye M. Sta. Maria-Constantino is a Tax Partner of SGV & Co.

19 July 2021

Benigno F. Leongson

The inestimable value of reliable accounting for estimation transactions

This challenging period during the COVID-19 pandemic has made demand for reliable and transparent financial reporting rise even higher. The increasing uncertainty in accounting for complex business transactions requires not only present information, but in certain cases, also requires estimation in order to be properly accounted for in the books of account and sufficiently reported in the financial statements.This pandemic has added a layer of uncertainty to an entity’s ability to achieve its long-term goals, requiring management to implement more frequent reviews of financial budgets and forecasts in assessing the valuation of corporate assets. In many respects, management applies estimation in financial accounting and reporting, posing unique challenges. For example, in accounting for the acquisition of a business, management estimates the valuation of assets and liabilities acquired and, in the process, must determine what information will be used and where such information will be sourced. Management also has to have a robust process for ensuring that the estimation transactions are processed and accounted for consistently, including the determination and application of the appropriate methodology especially when there are various acceptable approaches in the industry. While it is true that accounting estimation is not a new concept in management and financial reporting, it has become complicated yet inestimably valuable in this period of uncertainty.Given such challenges, management can only put its best foot forward by using its deep experience and knowledge of the industry and exercise sound judgment based on the available information to properly measure and report these transactions in the books.A PRUDENT EXERCISE OF JUDGEMENTManagement needs to exercise sound judgment in accounting for and recording estimation transactions based on the latest available information at the time the estimate is made.To exercise prudence of judgment when dealing with estimation transactions, management needs to use the most up-to-date information about the transaction, select the most appropriate measurement method, and gather other relevant data in supporting the assumptions to be used in arriving at the estimate.To make the most reasonable estimate, management must also ensure that there are appropriate controls in place within the financial accounting and reporting process. The entire financial accounting and reporting process generates the financial statement amounts, making it necessary to establish the appropriate and sufficient controls to ensure that the output from processing estimation transactions is reliable. This process includes the necessary risk assessments and related activities necessary to ensure adequate financial statement disclosures. These estimated amounts largely drive what should be recorded in the books and disclosed in the financial statements.Management also needs to identify areas in the estimation process that are prone to error, and thus increase the risks of material misstatement and unreliable information in financial reporting. It must revisit the previous bases of accounting for estimates especially when the data and assumptions used are highly dependent on macroeconomic factors and thus are subject to frequent changes and would require regular reassessment. It will also need to be conscious of potential biases to ensure that it continues to objectively evaluate all required information when arriving at the estimates. It is likewise important to remember that anything that has been proven and accepted in the past may no longer be relevant considering the changing business landscape and business outlook.ACCOUNTABILITY FOR ESTIMATIONSTop management and those charged with governance bear the responsibility of formalizing and approving the estimation process. At times, management may need the assistance of experts particularly for more complex estimates. However, this does not relieve it of its responsibility to carefully evaluate the work of experts. The same is true in the selection of an appropriate financial accounting and reporting policy that will be used for such transactions, assessing the need to change from previous years’ assumptions and addressing the potential impact of the changes on certain financial reporting assumptions. The process to be used will depend on the level of risk and the nature of the estimate. Any significant changes in assumptions and models from previous years must be fully supported and the basis of the change should be documented.Management may further need to thoroughly document the rationale behind the selection of estimation models and assumptions among various alternatives. This is to respond to any questions from users of the financial statements by showing the bases and processes that led to the amounts and disclosures. The more complex the estimate is, the more structured the process and risk assessment is expected to be.WHAT’S NEXT FOR MANAGEMENT AND THOSE CHARGED WITH GOVERNANCEThe adoption of new and complex accounting standards as well as the evolving business landscape increases the demand for sound financial reporting that maximizes the use of available external information to produce reliable estimates. At the same time, management needs to ensure that it is still able to satisfy the information needs of stakeholders and users of financial statements. It will also need a robust assessment of all inputs used and strong justification behind the selection among various models in accounting for estimation transactions.Beyond just compliance, management must consider how the disclosures help users of financial statements better understand the relevance of the estimate and its impact on the financial statements — from having adequate to reasonable disclosures. A robust risk assessment for estimates should be part of entity-level controls as it will set the tone for how transaction level controls will be set. For more complex and significant estimates, management and those charged with governance need to revisit their processes and controls and address the related risks identified on the estimation transaction.Management must have its own stand-back approach to revisit and assess the effectiveness of the processes that are in place. This should enable it to accordingly revise the processes based on the evaluations done.RISING TO THE CHALLENGEThe use of reliable estimates in financial reporting has become increasingly complex because of the pandemic. It is quite likely for regulators and other users of the financial statements to scrutinize and challenge financial statement estimates, as the estimation of these values are judgmental in nature. Accordingly, this would require closer collaboration between management and those charged with governance to ensure reliable and transparent financial reporting. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Benigno F. Leongson is an Assurance Partner of SGV & Co.

12 July 2021

Anne Margaret E. Momongan

The need to properly close up

With the seemingly never-ending economic and public health uncertainty brought about by COVID-19, we have seen a number of greatly affected businesses incur continued losses. Several have even been forced to close down and cease operations. It seems that despite the grant of perpetual existence under the Revised Corporation Code (RCC), some corporations die natural deaths due to the unprecedented challenges caused by the pandemic.Unlike the joy and excitement of starting a business, ceasing to do business is a painful undertaking. However, will physically closing shop be enough to say that business operations are terminated? Unfortunately, from a legal setting standpoint, it is not as easy. Some business owners believe that for as long as the business conducts no operations, the business is successfully closed and need no further steps to take.Another inaccurate view some may hold is that for as long as the corporation ceases to exist in the eyes of the Securities and Exchange Commission (SEC), that suffices as business closure. This may be partially correct since the RCC provides that if a corporation becomes inoperative for at least five consecutive years, the corporation is placed under delinquent status. Thereafter, the delinquent corporation will be given two years to resume operations and comply with the requirements; otherwise, the corporation’s Certificate of Incorporation may be revoked. However, it should be emphasized that though the RCC provides for delinquency and/or revocation, the closure of the business does not end there. This is where problems usually arise; as a result, business owners tend to overlook the importance of properly deregistering the corporation.While a corporation may have achieved delinquent status in the eyes of the SEC, it is still considered to be in business in the eyes of the Bureau of Internal Revenue (BIR) and the Local Government Unit (LGU). This can cause headaches for business owners — simply because the business was not properly closed and deregistered with all the necessary government agencies. As a result, a corporation will be penalized heftily for failure to file and pay the taxes and returns due from it and/or obtaining the necessary permits. The solution is to ensure that the corporation goes through the proper deregistration processes with urgency.CONSIDERATIONS WHEN CLOSING SHOPSince business deregistration with various government agencies may take time — spanning years for some — it should be highlighted that during the process of deregistration, the corporation stays alive and maintains its separate juridical personality for dissolution purposes. During the dissolution process, the management and/or the Board of Directors (BoD) have several factors to consider, such as deciding which functions are necessary for the dissolution or at a minimum, during the deregistration process. The accounting and finance team may need to prepare various documents, financial statements, tax returns and schedules for submission to various government agencies. The human resource team (HR) must also handle final pay, separation pay, and others.The management and/or the BoD also need to weigh whether to outsource necessary functions to third parties or keep these in-house. More factors for deliberation include the cost of keeping salaried employees as compared to paying consultancy fees. This will depend on the skill set required, hours needed, and the level of control the management wants to exercise over the work performed. Another challenge is when employees jump ship to join another entity. As a result, a corporation may have no employees left to address the government agencies’ clarifications while in the process of deregistration. It is likely for this reason why some opt to hire business professionals/consultants to take care of deregistration matters and at the same time, safeguard business records for easy retrieval.Business owners also need to determine how long the business space needs to be maintained. This will rely on management intent or the availability of an agent or authorized person to receive notices on their behalf. Although the deregistration and dissolution process may take years, the corporation does not necessarily need to keep its business space and employees during this period.DEREGISTRATION WITH THE BIR, LGU AND OTHER GOVERNMENT AGENCIESEmbarking on the deregistration process may appear lengthy, costly and dreary. There is also a tendency to neglect a corporation that is no longer profitable and operative. Is it then worth going through the deregistration process? Will it not be worthwhile to simply be inactive for a long time and wait for the BIR and/or LGU to act? Just like with any other strategy, the impact of inaction or even delay can be frustrating and devastating. When visible and quantifiable, delays or failure to deregister may translate into potentially hefty penalties from the BIR and the LGU.To formally close a business in the LGU, a company needs to obtain clearances such as but not limited to Barangay Clearance; City Treasurer’s Clearance; and other relevant clearances particular to the LGU concerned. The LGU will also assess deficiency taxes and any unpaid annual permits.As for deregistration with the BIR, retiring corporations that have completely paid off their tax liabilities will be issued a Certificate of Tax Clearance. This confirms that the corporation no longer has any outstanding tax obligations to the government. The law is clear that corporations shall not be dissolved until cleared of any tax liability. It should be underscored that the processing of the tax clearance triggers a mandatory audit or assessment for the last three open years prior to the dissolution. Such an examination may result in a deficiency tax assessment unless the corporation has no operations during the periods under audit. Another matter worth emphasizing for the BIR deregistration process is the relevance of end-dating for tax return filing purposes. Prior to end-dating and notwithstanding the plan to dissolve, the company is still required to file returns, which can be nil returns if already non-operational, for reporting or compliance purposes.The corporation must also submit an application for the cancellation of registration or an equivalent notice document in order to formally stop its obligation as a contributing employer to SSS, PhilHealth and Pag-IBIG.It is worth noting that to engage in the deregistration process at the earliest time possible will also make it easier to retrieve accounting records and documents, smoothening coordination with the corporation’s employees who prepared these records. As the corporation ceases to be a going concern, is there an assurance that employees will remain to see through the dissolution process? Human nature can drive employees to look for other employment opportunities. When already employed by another entity, coordination on record-keeping and providing clarifications can be troublesome. Challenges in document retrieval and obtaining clarifications from previous process owners are usually encountered when years have passed before a corporation is properly deregistered.A PROPER GOODBYE THROUGH PROPER DISSOLUTION AND DEREGISTRATIONProper deregistration of a business may be a subject that business owners do not want to confront immediately, especially after the pain of loss. Despite the fact that dissolution and deregistration can be long and tedious, it can still be achieved fairly painlessly with the guidance and assistance of a trusted tax professional — especially when matters on assessments or audit findings come in.Furthermore, in consideration of penalties that may be imposed, it is important for the company to go through the deregistration processes with the assurance and comfort that, in the future, no unresolved matters will haunt the business owners.This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Anne Margaret E. Momongan is a Tax Senior Manager of SGV & Co.

05 July 2021

Randall C. Antonio

A new world where transformation is a precondition

In the last decade before the COVID-19 pandemic, businesses were preoccupied with understanding, harnessing, integrating, and enjoying the benefits of the Fourth Industrial Revolution. Many progressive companies joined the conversation and launched their respective versions of their transformation agenda. Today, a quick look back shows how Business Transformation appears to have been reduced to a buzzword, an empty promise of most corporations trying to reinvent themselves. Articles and anecdotes suggest that during this period, most transformation efforts may have failed for a host of reasons — but while some were external and uncontrollable, most were internal and in fact, preventable. Often, it comes down to the lack of stakeholder support for the scope, prioritization, and scale the business needs to change.As we continue to make sense of the additional brick wall created by COVID-19, and without an end in sight, we need to ride the wave as we reimagine the post-pandemic world. Certainly, the landscape and market have changed, and technology has even more use cases than ever before. This poses the question: Is your company post-COVID-19-ready?TRANSFORMATION STARTS WITH RISK RECOGNITION AND ACCEPTANCETransformation starts when an organization reflects, collectively understands the risks and accepts that their ambitions and goals could get disrupted, or worse, that they could become irrelevant and quickly obliterated. Many organizations do not realize this until it is too late. This may sound simple but depending on a company’s culture and values, it could be very complicated — and sometimes even a painful process.While a transformation agenda, with all its imperatives and financial goals, is usually defined by management and well-supported by the board, the participation, engagement, and cooperation of everyone in the organization is an absolute must for it to succeed. A compelling story of change that resonates with everyone and inspires every member of the organization must be clearly communicated on a sustained basis.In each of the following steps to transformation, executives must consider these questions to determine their own transformation initiatives.BLUE SKYINGAfter a thorough assessment of headwinds and tailwinds, companies must ask themselves where they see the business, and where they want to play. Are there new or emerging markets they had not recognized before?Whether the direction is to complement an existing business or change the business model, the common goal is to stay relevant and profitable, now and in the future. Executives need to set the direction for their future vision for the organization and identify what needs to be done to get there.BASELINE AND KPI SETTINGDo the customers love the product or service offered by a company? Do they love the brand? Does the company meet all Service Level Agreements with their customers and partners? Does the company have a healthy profit and loss (P&L) with a stable source of revenue and an efficient cost management strategy? Does the company have the right people on board?Before anything can begin, companies must know exactly how things are, both internally and externally. This is the stage where all the pain points and improvement opportunities are identified. Once a future state has been defined, a roadmap is developed. Processes and systems are assessed, employee and customer inputs are heard, and clear next steps are drawn. The communication of updates, action plans, and time-based milestones are important to all stakeholders, from the Board and management team to the employees.BUILD OR OPTIMIZE?Whether the decision is to build or optimize, robust business systems are needed to carry the business forward into the future. This lies at the very heart of any transformation initiative. Customer data, supply chain and logistics, manufacturing and accounting are only some of the important business systems that must be put in place and integrated. While the customer is king, nowadays data is queen. Data now, more than ever, holds an important piece in predicting outcomes in this ever-changing world.The resource that must go into transforming a business or its systems is almost always a sore point, as it often hinges on the leaders’ investment principles and priorities. As the strongest and most credible sponsor of a transformation agenda, the CEO must push for any big-ticket expense attached to it.A dedicated, highly skilled and experienced transformation team must also be deployed. To effect change, this team needs organizational and business acumen, the passion to understand the business, its operations, and its customers from top to bottom. Information and data must be made freely available to them.Regular cadence meetings must be scheduled to report on progress and resolve challenges to allow the opportunity to pivot and re-calibrate plans if needed. Prioritizing transformation-related issues and making timely decisions must be paramount, and stalemate positions must be immediately resolved to meet commitments on time and on budget.DELIVERYTransformation will disrupt current operations. An experienced transformation agent is needed to architect and deliver a sound change management program to seamlessly steer the business from its current to its future state. This plan must also have the buy-in of top management, be equipped with the right resources, and get communicated as a non-negotiable priority to the entire organization.There are cases where a business seems to be on business-as-usual mode, and nothing seems to be going wrong. Should it then consider undergoing transformation? There are studies that prove that a parallel transformation — where the core business is free to operate as usual, as a parallel effort reengineers its version 2.0 — has seen some successes.Ultimately, transformation, with all the disruption, changes and opportunities created by digital technology, and more recently, the pandemic, is a precondition for any company that wants to stay relevant. Technology will only continue to develop at breakneck speed and force those who understand the risk of being disrupted to innovate at scale. Companies need to continuously innovate, pivot, and always be open to change — while executives must always be aware of the question, what will put me out of business tomorrow?This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Randall C. Antonio is a Consulting Principal of SGV & Co.