At the beginning of 2020, Baker McKenzie research among leaders of the largest global Industrial companies highlighted resistance to change. Far from a lack of ambition, this skepticism was borne out of the practical challenges of transformation and concern with protecting immediate business performance. Balancing innovation with core strengths is complicated, but for industrials, the cost of managing legacy assets, environmental impact and labor issues, in particular, adds significant complexity to any effort to change. One year on, these challenges remain, but the calculus has shifted. Disruption arising from COVID-19 has accelerated trends already apparent in the market –– particularly digitalization and trade volatility –– and transformation has gone from “nice to have” to necessity. There is a significant imperative to change and, with greater stakeholder buy-in and long-term viability outweighing short-term performance, industrials have a new license to be bold.
Interviews with sector leaders highlight renewed action and energy, with companies looking to acquire technology and reimagine systems, networks and services to thrive in future. They report three areas of focus: adapting to the new market, digitalizing for growth, and disruption-proofing supply chains.