It’s been a unique start to 2017. The first quarter brought us an interesting mix of uncertainty coupled with overall steady conditions and solid job growth. As we move into the second quarter, the opportunity for meaningful, dynamic gains is very real, and I advise business leaders to think boldly about growth. In fact, it’s time that they step on the gas as they examine their industry and market conditions, hire new people and plan for new products and service lines.
Point B has taken a close look at high-priority industry and service sector drivers for the remainder of 2017 to help businesses navigate the year successfully.
Mergers become streamlined. We can expect to see additional mergers to gain efficiencies and reduce competition among not only providers and health plans, but between groups joining/aligning to form a combined health plan and delivery system. Also, as the existence of standalone provider systems shrink, merger and affiliation candidates are more limited and competitive. Parties need to act fast, as many acquirers are on their second or third round with efficiencies of experience under their belts.
Health promotion initiatives see an increase. In an effort to keep healthcare costs at bay and address the high cost of caring for chronic conditions, there will be a growing focus on health promotion initiatives and patient adherence programs, affecting both payors and providers of healthcare services. In addition, with higher deductibles, the patient as “payer” is incented to engage with recommended health promotion programs more than ever.
An overhaul of the ACA takes center stage. With the “repeal and replace” of the ACA underway, healthcare organizations can be proactive by enhancing strengths and identifying the gaps that require attention throughout the organization to help lay the groundwork for the next set of challenges facing this constantly evolving healthcare industry. For example, many provider organizations are bracing for the potential of an influx of newly uninsured.
Customers want things (even) faster. Consumers’ demands for immediacy, particularly by millennials, coupled with shifts to instant delivery and same-day service, will drive an even greater number of retailers to offer more order-online-and-pick-up-in-store, curbside, and drive-thru options (would you like fries with that blouse?).
Loyalty is still king. Omnichannel retailers will strive to engage consumers with loyalty programs to better measure cross-channel behavior and harness the same power of analytics in brick and mortar environments as they have for online customers.
Employee satisfaction is even more critical in the fast-paced retail world. With workers asking for more predictable schedules, and some cities looking to mandate predictability, retailers will revisit labor optimization models to ensure they work not just for the customer and the bottom line, but that they also drive employee satisfaction. Organizations will also need to develop strategies for implementing new compensation structures as they begin to become more relevant and even mandated.
Technology investment is strong. There will be more focused investments in Fintech (Financial Technology) and the use of technological innovation (e.g., artificial intelligence, blockchain, mobile payments, etc.) for financial services organizations this year, making technical due diligence and system testing more important than ever before.
Cybersecurity threats become omnipresent. As financial institutions continue to migrate to an “all-digital” environment, the risk factor for cybersecurity breeches will increase exponentially. The likelihood of a potential breech and its negative impact on financial institutions will move cybersecurity to the top of the list on executive agendas.
We’ll see a continued focus on growth once interest rates begin to rise and regulatory demands are eased. As we get further into a post-election world, the outcomes of these two events will mean more capital to spend on strategic initiatives that focus on long-term growth and success. This will lead to renewed innovation efforts and the exploration of multi-dimensional business models to drive new revenue streams.
Best practices will need to be shared across industries. The trend of applying best practices across industries, such as the development of “urban resorts,” will continue. Great projects will deliver innovative places that meet the evolving needs and expectations of consumers by blending the best across industry business models and development practices.
Technology plays a bigger role. Developers will need to take advantage of advancements in construction methods and technology to develop more efficient, flexible projects. For example, using cross-laminated timber (CLT) construction is cost-effective, can speed up construction, and provides desirable design aesthetic attributes.
Multiple use is the new black. Never before has it been more important to create spaces with flexible design and adaptability for multiple uses and product types. Consumers are becoming used to traveling to fewer places offering more experiences, and developers will need to plan and execute based on this focus in 2017.
Innovation in the enterprise takes a step forward. More companies will continue to add corporate venture capital, intrapreneurial and incubatory capabilities as they push for new and more provocative ways to innovate. However, those who try without leveraging venture capital experience will be susceptible to early costly mistakes that become realized in future years.
Mergers and acquisitions come home to roost. Companies have been stockpiling cash, and this surplus will manifest itself in significant M&A activities in 2017. Organizations will need a defined strategy, strong discovery and assessment processes, cultural integration methodologies and a robust transition playbook for optimum success.
Series A funding becomes a challenge. Large VC funds will continue to raise a larger portion of available VC dollars. This will make it more challenging for startups to find Series A funding unless they have clear IPO paths, or can tap into other financing sources, such as direct corporate and family office capital.
Mike Pongon is the CEO of Point B Inc., an integrated management consulting, venture investment and property development firm. With more than 600 associates serving clients in a diverse set of industry and functional areas across the U.S., Point B has helped organizations form, execute and thrive for the past 22 years.