Nearly one in two managers in Morocco think that their company will not survive over the next ten years without a transformation of the mode of operation, according to the first edition of the CEO Survey Morocco survey by PricewarterhouseCoopers (PwC) recently published. Business owners indeed expect that several changes – initiated by the recent international crises – will continue or be accentuated: changes in customer demand and requirements; regulatory developments; the transition to new energy sources; supply chain disruptions; technological disruptions with the advent of artificial intelligence (AI), the metaverse and the blockchain, or the arrival of new competitors from similar business sectors.
“Optional subject” became “priority subject”
For these reasons, business leaders in Morocco intend to invest at different scales from the current year, in order to evolve with their economic ecosystem. As such, increasing the skills of talent in priority areas, the automation of processes and systems and the deployment of technology are the first three investment targets. Then comes the adoption of alternative energy sources, the adjustment of the company’s supply chain and the decarbonization of the business model, to name a few. “Recurring crises are today seized by leaders as accelerators of change and transformation”declares Réda Loumany, Territory Managing Partner of PwC in Morocco, emphasizing that the logic in which business leaders are part fits into the state of mind of the Kingdom’s New Economic Development Model.
As the Moroccan economic fabric – like everywhere else in Africa – is dominated by small and medium-sized enterprises, is the transformation of entities (really) easily conceivable, at a time when the national economy is suffering the setbacks of the unfavorable global situation that prevails? following the Covid-19 pandemic and the war in Ukraine? “On the contrary, the context of economic uncertainty has an advantage, it has made the transformation of companies go from the status of ”optional subject” to that of ”priority subject” for managers”answer to The Africa Tribune Jonathan Le Henry, Partner Strategy& (the strategy consulting entity of PwC), responsible for Strategy& activities in the Maghreb. According to him, the situation that has prevailed in the world for three years – and which directly and indirectly impacts each region and each country – has made evident the need for change for companies that want to ensure sustainable growth in the future. . “While there are specificities from one sector to another, the overall dynamic remains the same. No sector can ignore the need to transform”insists the expert.
Financing, a challenge that does not dampen the enthusiasm of CEOs?
On the macroeconomic level, 71% of business leaders in Morocco are not optimistic regarding the national economic growth for which they expect a slowdown in 2023, while inflation remains galloping, posting 9.4% in first quarter according to the High Commission for Planning (HCP). While interest rates are generally on the rise, business transformation strategies should probably refine the financing function. “The transformation of companies is indeed a challenge that is often more accentuated for SMEs insofar as the mobilization of the financial and organizational means necessary for this transformation is sometimes more complex”explains Jonathan Le Henry. “Our economic fabric, he continues, is made up of a large number of SMEs, many of which export to foreign markets. As such, they must find new levers of competitiveness. Leaders have moved beyond the operational complexity of transformation. They are aware that in the current period, the only sustainable response they can give to economic volatility is to accelerate the process of transformation of their companies”.
Several other subjects such as risks related to corporate cybersecurity or climate change, including awareness of environmental, social and governance (ESG) risks, are also watched more or less closely by business leaders. While waiting to achieve their transformation objectives, Moroccan CEOs are already framing their priority actions in order to counter any shocks and keep their boat afloat. At the forefront of their actions: reducing operating costs, diversifying and increasing the prices of their products and services or finding other suppliers…