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Rethinking business margin improvement strategies
6 bold insights from the 2024 MarginPLUS study
The economic uncertainty of 2023 was not vastly different from challenging periods of the past. The way many organizations responded to it, though, marked a bold shift. Insights from our study of more than 300 business leaders show a move in favor of a more strategic and focused approach.
A reimagined response to economic uncertainty
Business margin improvement and technology-enabled transformation efforts are taking place at nearly every large company around the world—not only in reaction to known pressures, but also as a way to address widespread uncertainty. Business leaders aren’t strangers to uncertainty, but our 2024 survey findings showed—amid inflation, global conflict, new regulations, and high interest rates—many of them changed their approach to it.
Before, the prevailing approach was to address cost and margin across a wide front. The urgency of the moment called for bigger, bolder, faster responses—but their outcomes didn’t always live up to the hope. In contrast, Deloitte’s 2024 MarginPLUS study of more than 300 business leaders shows a new focus on more specific moves that focus on fewer, but more targeted, parts of the business.
Nearly every executive in the survey confirmed taking on some initiative to drive growth or cost transformation. However, executives have reported that their programs are increasingly missing their targets. In response, we have found companies are shifting their approach to cost-reductions and corporate transformation strategy, with an added focus on generative artificial intelligence (GenAI)—mainly driven by an increased interest in overall AI capabilities—in an effort to drive growth and competitive advantage.
6 bold business margin improvement insights
The survey aimed not only to learn where companies are focusing their efforts, but also to determine which strategies have worked—and which ones have fallen short. Here are some of the most prominent things they told us.
What do these findings tell us about corporate transformation strategy?
The pressure is on across nearly every industry to preserve margins, and this will require new, more targeted approaches to transformation—a firmer reliance on technology, investment, and innovation, and (as margin efforts become more targeted) renewed leadership accountability.
As your management team finalizes its corporate transformation strategy, consider probing on the following questions:
- Is there a clear business case for the margin improvement effort?
- Is a solid tracking and reporting process in place for the business margin improvement effort?
- Is the management team agile in assessing, validating, and adjusting targets reasonably, according to the reality throughout implementation?
- Are you targeting the right commercial, product, and operational capabilities needed to help drive competitive advantage and differentiate your business from the rest of your industry?
- Are you proactively investing in technology improvements to enable data availability, improve reliability, and facilitate decision-making with an eye on the future of your industry?
- Are change management activities deployed to raise awareness, acceptance, and benefits of initiatives?
- Are leadership roles and budgets distinct for the business margin improvement efforts?
Ready to reimagine your business margin improvement efforts? Learn how Deloitte can help your business target the right capabilities to drive growth and effective business transformation.
Get in touch
Abhijit Chakraverty
Managing Director, Strategy / LSHC | Deloitte US
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