Strategies For Building A Resilient Business

In today’s uncertain business climate, many companies are continually evaluating their performance improvement efforts to take control of margin improvement. This involves regularly evaluating the effectiveness of current strategies, identifying areas for optimization, and transforming to adapt to changing customer needs and market conditions. A proactive approach to performance evaluation can enable companies to not only improve their profitability but also enhance their overall resilience and competitive advantage.

In its latest installment, Deloitte’s 2025 MarginPLUS study: Resilience and innovation revealed that while leaders view cost reduction essential to margin improvement, 79% of surveyed companies did not meet their cost savings goals—an improvement from 82% in 2024, but still worse than the 72% in 2023. Further, the report showed respondents’ overall business outlook growth expectations are down—just 27% expect their company’s revenue to grow by more than 10% down from 45% last year. Many companies are also shifting from spend optimization to hard-dollar cost reduction, up 26% year over year. All this underscores the ongoing challenges and the critical need for effective cost management strategies in today’s business environment.

To understand what’s triggering today’s companies to transform how they do business, we asked nearly 400 executives from across all industries and geographies how they are addressing internal and external growth barriers, and the lessons they can offer. In short, they’re doing it by accelerating technology investment, targeting cost-reduction efforts, and being bold enough to learn lessons from not only their successes, but also their failures.

Precision Over Broad-based Cuts

When it comes to cost reduction and transformation, precision over broad-based cuts is a key trend that carries over from last year. In 2025, the number one way for respondents to pursue cost reduction continues to be targeted actions taken to reduce costs in a few divisions, business units, functions, or geographies (69%, up from 65% in 2024). This emphasis on targeted actions instead of across-the-board cost-cutting reflects a more thoughtful, nuanced, and focused approach to cost reduction and transformation.

Business leaders also indicated a significant growing use of cognitive solutions such as AI and machine learning over the past year (from 22% in 2024 to 35% in 2025) to achieve cost results.

When asked about top levers for achieving transformation, organizational structure design (50%) ranked as number one with data and AI strategies following close behind (48%); and process reengineering and automation (47%) coming in at third. As leaders take a more focused approach, the average number of levers that respondents expect to address is down sharply from seven in 2023 to just three in 2024 and 2025, highlighting how companies are becoming more precise in their transformation efforts.

Leveraging AI to fuel innovation and growth

According to Deloitte’s State of Generative AI in the Enterprise study, nearly every surveyed company is already using Generative AI (GenAI) in some capacity. Further, in its Q4 update, findings show that while improved efficiency and productivity continue to be the most commonly sought benefits from GenAI, and many organizations (40%) reported they are already achieving their expected benefits in this area to a large or very large extent, respondents cited slightly higher levels of success in a small handful of more strategic benefit areas, particularly “innovation and growth” (45%). This reflects the dual impact of the technology on margin improvement – addressing both cost reduction and growth acceleration.

This closely mirrors Deloitte’s 2025 MarginPLUS study, where results show companies are increasingly focused on using GenAI to not only operate more efficiently, but also to serve customers more effectively and deliver higher-quality experiences. GenAI is also being harnessed to develop innovative products, services, and business models that can unlock new revenue streams and support market expansion.

Among industries, Technology, Media, and Telecommunications (TMT) leads all sectors in using GenAI for innovation (25%), while consumer companies are at the forefront in applying GenAI to elevate the customer experience (33%).

Given that the top transformation trigger this year is competitive pressure (cited by 43% of respondents), it’s no surprise that organizations are prioritizing the implementation of new technologies and digital tools to deliver an unmatched customer experience as a key performance improvement strategy.

Leading practices to support transformation efforts

With transformation failure rates persistently high, as noted from the past three MarginPLUS survey findings, how do successful companies achieve their cost reduction and broader transformation goals? The data suggests that success may be less about what companies are doing and more about how they are doing it.

As business leaders embark upon their transformation strategy, companies indicated that they are increasingly aligning around a clearly defined strategic north star, allocating dedicated enterprise-level budgets for transformation initiatives, establishing formal governance structures and committees, and—most critically—introducing specific transformation leadership roles.

Notably, 56% of companies have added transformation leadership roles, signaling a promising shift according the 2025 MarginPLUS study. This could mark a turning point in addressing the nearly 80% failure rate historically associated with large-scale transformation. In fact, data from Deloitte’s 2025 Chief Transformation Officer report shows that when a Chief Transformation Officer (CTO) leads the effort, transformation programs are significantly more likely to succeed—80% meet or exceed their performance goals according to survey responses.

Ultimately, successful transformation hinges on commitment, discipline, and execution. Companies that take deliberate, proactive steps – continuously seek to pursue performance improvement strategies – may be better positioned to unlock new growth opportunities and seize competitive advantage.

Would you like to know how cost reduction can increase your resilience? View our Deloitte Dbriefs to identify keys to business transformation success and actions you can take to manage transformation.