8 out of 10 Dutch companies to review strategy and operating model

23 November 2022 Consultancy.eu 3 min. read

A large proportion of Dutch companies will be forced to overhaul their strategy and business model in the coming year, according to new research. With labour shortages, supply chain issues, and inflation impacting bottom lines, executives still have to reckon with long-term issues including cybersecurity and digitalisation.

FTI-BOLD, the Dutch branch of FTI Consulting, surveyed approximately 600 directors, supervisory directors and managers of medium and large companies from 250 employees or $ 50 million in turnover. According to the advisory firm, the compound effect of staff shortages, rising energy costs, inflation – and more – poses a multiple threat to the competitiveness of Dutch companies.

A 78% chunk of board members surveyed therefore expect to have to make adjustments to the strategy. And top of the agenda for many is the war for talent. An 87% portion have recently adapted their approach to attracting and retaining talent. Meanwhile 26% see recruitment and retention as a major reputational risk, and expect to be scrutinised by the media in the next 12 months.

Netherlands C-suite concerns

Inflation, the war in Ukraine and the associated geopolitical risks, the current recession in the Netherlands, and supply chain disruption are the other top five concerns. At the same time, executives remain busy with important issues that have been on the rise for some time, such as cybersecurity, data protection and ESG investments.

The latter in particular is high on the strategic agenda. No less than 82% of the companies surveyed have increased their investments in ESG and sustainability in the past 12 months. More and more administrators now see the theme not only as an obligation, but also as an opportunity.

Companies in the financial sector, food and beverage, consumer goods and mineral processing will be the most proactive with ESG drives in the coming period, FTI-BOLD suggests. This is important as many investors are currently warning they may withdraw backing from companies who fail to live up to their environmental, social and governance expectations, in order to cut costs.

Reasons for conducting M&A in the next 12 months — Netherlands vs. key sectors

To manage or accelerate the transition to ESG, a quarter of companies plan to improve their ESG profile through mergers or acquisition. This will help them gain more knowledge and expertise in the area. However, a similar number of directors indicate that they will also use acquisitions to build technology knowledge and systems.

Faced with all these macroeconomic and sector challenges, business leaders will have to “make tough choices,” according to Klaas Wagenaar, Senior Managing Director at FTI-BOLD.

He added, “Large Dutch companies are facing challenges on multiple fronts simultaneously and will need to change course to keep their business models competitive and profitable. After all, leaders will have to develop and implement strategies on several fronts simultaneously in order to remain operationally and financially resilient in the long term.”