Corporate strategy, defined broadly as providing meaningful and actionable strategic analysis, planning, and development to management teams, is critical to company direction and growth. To build a balanced portfolio and drive sustainable value, companies must calibrate their mix of assets, capabilities, and processes across resource allocation, performance improvement, M&A, and divestitures.
But the fact of the matter is that corporate strategy faces insurmountable challenges when it comes to strategic execution. Harvard Business Review notes that strategy executives are often pulled toward internal issues: resolving conflicts, reconciling budgets, and managing performance.
Making corporate strategy challenges infinitely more complex is the COVID-19 crisis. The impact of the global pandemic is far-reaching, affecting businesses across all sectors and resulting in extreme supply chain disruption. Global businesses are quickly adapting to the “new normal” as executive leaders look for proactive strategies to protect their employee bases – and their bottom lines.
To find out more about PTC’s corporate strategy during COVID-19 – and beyond – I recently sat down with Kathleen Mitford, PTC EVP, Chief Strategy Officer. A 14-year veteran of PTC, holding leadership positions in product and market strategy and product management and R&D for PTC’s core and growth businesses prior to her current role, Kathleen is well-versed in strategy, corporate development, partnerships and acquisitions, corporate marketing, education, and portfolio management.
Let’s take a look at how PTC’s corporate strategy function is helping leaders understand the impact of COVID-19 on the business and consider the capabilities PTC will need to emerge stronger on the other side:
Corporate strategy’s primary role is to make sure the company is set up for success no matter the circumstances. This includes times of crisis (pandemics, recessions, natural disasters), as well as times of stability.
We want to make sure PTC has a sustainable business, so there are several factors to keep in mind: What’s happening in the market? How do we create a balanced portfolio? What are the technology trends we should be proactively watching? How do we put the customer first, understanding their current priorities and how their needs will change in the future?
Earlier this year, we mapped out our FY20 corporate strategy goals in several key areas, including developing a long-term SaaS growth plan that is additive to our existing portfolio, identifying and actioning acquisitions that will accelerate PTC’s market position for select technologies, and driving existing and strategic partnerships, among others.
All of our FY20 initiatives remain priorities during COVID-19, but some are being accelerated. Take SaaS, for example. In corporate strategy, we saw there was going to be a technology shift toward SaaS and we thought about how it would impact our customers. Cloud, SaaS, and mobile first are widely adopted in spaces such as CRM (e.g. Salesforce), but we have not hit that level of maturity in engineering software. We saw the tipping point for cloud/SaaS adoption has arrived in some product development segments and projects, so we made the acquisition of Onshape; we acquired it as a platform to be leveraged in the future.
Onshape, however, has been a shining star for us during the COVID-19 crisis. Many different engineers and developers cannot access their CAD software remotely, but with Onshape users can access their software anywhere, anytime.
SaaS is a technology trend that we were watching, and we were proactive about it. We thought it would be mainstream in engineering two or three years from now, but COVID-19 happened, and we have been able to proactively manage the crisis as well as future-proof the business.
When you think of corporate strategy, you try to understand what is happening in the market, what you should participate in, what is declining, and how customer needs are changing. Corporate strategy is focused, in large part, on the ways technology will evolve and how the business can get ahead of that.
PTC’s Barry Rubenstein, senior director of corporate strategy, has research and analysis that shows 89% of companies are looking at accelerating their cloud and SaaS initiatives. During this year’s LiveWorx event, we will announce what this means for PTC as a company.
All strategy initiatives outlined at the beginning of the fiscal year still make sense for PTC as a company. Today, more than ever, we are seeing a need for technologies that allow our customers to navigate the crisis – like PLM systems that allow engineers to design anywhere. It all comes back to understanding evolving customer needs, particularly in light of COVID-19.
Take augmented reality (AR), for example – we had a goal of accelerating our AR market position in FY20. The reason we are in the AR space is because of workforce productivity and worker skills gaps. We want to prepare future workers for that physical, digital, and human convergence. The way we interact with objects is going to change. We need tools to help get younger workers get up to speed quickly and capture the knowledge of the older workers who are retiring – this can all happen because of AR.
Another example of an accelerated initiative is with PTC’s education strategy. This year, we had a goal to get 1 million Onshape users by 2021.
Due to COVID-19 and the accompanying remote learning, we have accelerated our education strategy with Onshape by making it easier for schools and universities to have access to the software. But it’s not just the technology itself – we’ve reexamined the curriculum we provide to schools and universities. It’s designed for classroom learning, but we’ve revamped our curriculum quickly to make it suitable for remote learning.
One of the things we are able to study now is how school and university learning will change during and after the COVID-19 crisis. I think we will see an increase in remote learning, not just from college courses, but from accredited classes like Onshape for CAD being accepted towards a student’s degree.
Things have been accelerated, with more emphasis on technology that can be deployed where you don’t need people on site to do an implementation. We want our partners to be successful both now and in the future. With Microsoft, for example, we’ve learned how to accelerate plans to integrate with their collaboration tools.
Looking at the COVID-19 crisis, we notice reports mention coronavirus may return later this year. Companies are thinking about how we react today and how we will set ourselves up should we face another crisis. We are expanding the possibilities on how we work together with partners and what we work together on. Customers will need solutions quickly.
There are many things that are uncertain during the COVID-19 pandemic, but this much is clear: Companies that think strategically and adapt quickly to these unprecedented challenges will come out ahead.