We’ve made it a whole month in to 2023! For better or for worse, we’ve learned a few lessons from the year past: 2022 was a tumultuous year full of the unexpected, the controversial, and the slow crawl back towards some sort of normalcy.
Amidst changing Fed rates, the Inflation Reduction Act, and war in Europe, our leaders have pulled together some lessons learned from 2022 that should be kept in mind for the coming year, regardless of industry:
1. Everything is scenario planning.
In early 2022, we thought we were close to getting a handle on supply chains. The pandemic was subsiding, companies had adjusted to manufacturing and shipping delays, and it seemed like costs were going down. Then Russia invaded Ukraine. Buying oil and natural gas from Russia became unfeasible, rising fuel prices drove up the cost of everything from energy to groceries, shortages began to reoccur, and consumers and business leaders both began to ask: is there no such thing as normal anymore? What 2022 taught us is that the pandemic wasn’t a one-off: scenario planning in our supply chains and beyond has to a best practice going forward, or we’ll continue to be at the mercy of circumstances. Because as we also learned this year…
2. It’s a small world after all.
We are living in an increasingly global world. What happens in Kyiv affects Chicago. Demand in Bangalore is met by suppliers in London (trying to make this feel a bit more global). This is part of what makes scenario planning so necessary—it may be a small world, but it’s a diverse one with lots of natural and man-made disruptions. But for Spaulding Ridge, it’s also a good reminder that “All Business is Personal”—no matter where we do business, there’s no substitute for building and maintaining relationships to help you understand what’s going on.
3. Spend smarter and hold the line.
Our procurement officers have become champions of cost savings this year. While costs have skyrocketed and supply chains have resisted untangling, savvy procurement officers kept costs down and margins where they needed to be by spending smarter. Whether we’re discussing healthcare or energy, managing spend is the first line of defense in an uncertain economy.
4. Inflation is still in effect.
Unfortunately, between the war in Ukraine, strict COVID-19 mitigation efforts in China, tight labor markets, and other continued structural issues, inflation stayed high throughout 2022. Things have begun to even out, but after the year we just had, no one is ready to breathe a sigh of relief just yet. In many countries, governments are raising interest rates to contain inflation, and higher rates have begun to have their own impact. Furthermore, there are ripple effects that will still be following us into 2023—stubbornly high prices, layoffs, shortages, and more—and it’s still too early to tell whether the US will be able to curb inflation without causing a recession. What did we learn from all this? Again, be ready for anything, but more specifically, make sure to account for the full range of inflation outcomes on every level of business.
5. ESG matters.
It’s been an interesting year for ESG. Inflation pressures might have seen some companies pull back on their commitments to sustainability, but the SEC proposed rule regarding ESG disclosures has now created real accountability. Regulators and investors alike are demanding proof down to the vendor level that companies practice the ESG values they preach. In addition, the Inflation Reduction Act, the most sweeping piece of climate legislation passed in US history, has given companies incentives to prioritize environmental impact. Yet at the end of the day, many companies are going all in on sustainability efforts, not only because investors demand it, but also because studies have shown sustainable companies perform better in the long term. And still more are going beyond even what’s immediately profitable simply because it’s the right thing to do. Expect all of this to continue into 2023, in spite of temporary pushbacks.
6. A single source of truth is vital, no matter the industry.
The single source of truth, or SSOT, is a system of aggregating data from an entire organization to one central location to allow business leaders to make decisions based on the same data, in real time, without the blind spots that come from working in silos. A SSOT allows leaders better insights into spending, processes, opportunities for growth, and more. It also allows for better transparency and accountability.
While many companies consider themselves data-driven, the truth is that doing whatever the data tells you isn’t a solution. Companies learned in 2022 that they need to be data-informed. This means analyzing data, understanding what it says, and deciding based on quantitative insights that you can trust. The year ahead will belong to the companies that can use their data as one tool among many. A word to the wise: achieving SSOT is a necessary, but complex effort that requires expert integration of software solutions. The right partner can mean the difference between success and failure.
7. Service is going remote.
In 2022, companies started to accede that, for at least part of their workforce, remote and hybrid work was here to stay. In some industries, like healthcare, customers began to demand remote service. Telehealth was not, as some predicted in 2020, a band-aid method that went away with the worst of the pandemic: It has expanded healthcare into some of the most underserved communities and been met with a booming demand. And with this demand came the need for investment in almost entirely new infrastructure. Healthcare is just one extreme example of how most industries have at least some business that has now gone virtual, requiring a technology pivot. As 2023 unfolds, look for the shift online to continue to develop.
8. The World’s Got Talent…right?
Despite layoffs across several industries, 2022 still saw a labor shortage at all levels, from minimum wage workers to management-level professionals. Skilled technical workers are in particular short supply in the US, forcing companies to employ different strategies to attract new and retain talent. There is little indication of this trend changing anytime soon. Offering remote work is one of the top desired benefits right now, as is flexible scheduling and paid family leave.
9. Sales talent needs field time.
The worker shortage—and companies’ need to tighten the belt in some cases—has left many in the sales field doing more administrative work than before. In many cases, sales professionals say that the amount of paperwork and administrative duties they are expected to perform gets in the way of meeting their sales goals. This highlights the need for better, more integrative sales tools that help those in the field complete administrative tasks quickly, without taking up too much of their selling time.
But in addition to taking these lessons from 2022 into the year going forward, what do the leaders of Spaulding Ridge predict we’ll see in 2023?
“I think we’ll see companies will continue to consolidate onto fewer platforms, and cloud technology solutions that don’t deliver measurable value will be on the chopping block. This is a time for doing more, consolidating the solutions.” –Kevin Josephson, Senior Managing Partner, Chief Delivery Officer
“People are going to be asked to do more with less. How do you keep growing your business with a smaller sales team? How do you consolidate the vendors you are working with? How do you generate more sales from fewer regions?” –John Beringer, Senior Managing Partner
“AI, machine learning, and automation might start to become a necessity to businesses. I bet people will start to look harder there, and we’ll see it adopted more broadly.” –Sam Kubek, Senior Managing Partner
What do you think we’ll see in 2023? Let us know on LinkedIn.