Businesses that are fit for the future are excelling beyond their rivals. They thrive by achieving goals such as business growth, faster innovation, and improved sustainability. Their strategic foresight and agility have allowed them to succeed amid uncertainty.

Here are some highlights from our Future Fit data, which show how organisations that effectively integrate sustainability into their operations and projects are better positioned to thrive in the evolving healthcare landscape.

• Meticulously establish, review and refine key performance indicators, including tracking external factors such as competitor pricing and government policies.
• Commit to ongoing investment in physical infrastructure to enhance sustainability over the long term.
• Ensure the management team possesses the skills to navigate a volatile landscape and implement feedback-driven decision-making processes.

Healthcare businesses have faced a confluence of increased costs, talent shortages, and low occupancy rates since the Covid-19 pandemic. These challenges have led some business owners to consider exiting the sector altogether. Even high-growth areas like specialist care and life sciences have encountered difficulties, including rising interest rates and increasing capital costs.

However, our research identifies Future Fit healthcare businesses poised to capitalise on emerging opportunities. “The most successful businesses have well thought-out, long-term strategic plans that focus on incremental sustainability improvements within their businesses,” says Barrie Davison, our National Sector Head for Healthcare. “They leverage the benefits of financial and economic models that help generate surplus cash flow to reinvest in initiatives that help reduce energy and create an environment that is attractive for staff.”

These Future Fit businesses excel across four pillars: sustainability , technology  and innovation, talent  and value chain collaboration . They set the benchmark for the sector, providing a roadmap for others to follow to remain competitive and investable.

• Reinvest sustainability savings: Channel savings from sustainability initiatives into more ambitious projects.
• Enhance purpose: Strengthen employee and community engagement through programmes like community wellness initiatives.
• Support healthcare advancements: Collaborate with industry partners to share data and drive healthcare advancements.

Sustainability is the first area where Future Fit healthcare businesses take the lead. While the sector faces challenges on decarbonisation – many businesses depend on older non-purpose-built buildings that can be difficult to retrofit – it is making progress. And more broadly, purpose is being place at the core of leading companies’ business models.

Notably, 36% of healthcare businesses define their purpose in terms of societal and planetary contributions, with 19% prioritising this as their primary objective for improving company performance and culture.

Investing in sustainability yields both societal and commercial benefits. A significant 69% of businesses believe sustainability investments drive competitive advantage, and many are making strides:

• 63% implement tools to monitor and report on key environmental metrics.
• 58% reduce their energy usage.
• 51% now use renewable energy.

Future Fit businesses integrate sustainability at every level, with 65% including contribution to purpose in employee performance reviews.

Barrie urges businesses in the sector to focus on the broad benefits of investment. “Research points to the health benefits of retrofit and deep retrofit of health settings in improving health and life span,” he says.

“This is particularly relevant for non-purpose-built social care settings where investment in renewable energy such as solar and ground source heat pumps, insulation and air quality and infection control have a key role to play.”

• Foster innovation: Encourage a cross-functional approach to digital transformation.
• Adopt a ‘fail fast' mindset: Experiment with new approaches, learning and optimising quickly.
• Collaborate for innovation: Partner with universities, public sector bodies and other groups to drive innovation.

Despite resource constraints, businesses investing in data and technology report substantial returns – from simple gains such as reduced food wastage all the way to better outcomes for care home residents. Actionable insights from data could lead to significant efficiencies and improved outcomes. Currently, 66% of businesses have enhanced their data science capabilities, with 47% implementing artificial intelligence (AI) tools.

“Understanding the value of data is the first step,” Barrie says. “We now see a number of businesses across health and social care that routinely use patient, resident and consumer data to inform day-to-day decision-making, tailor their services and drive long-term strategic thinking.”

This could inform a much more rational approach to investment more broadly. And investments are increasingly data-driven, with 68% relying on empirical evidence before committing. To make progress, 49% have established formal change management competencies. “Ultimately, it is the business’s leaders who will drive this, but they should not be afraid to take independent advice from peers and third parties with experience of what is working for other businesses,” Barrie says.

• Strategic workforce planning: Map future skills needs and develop plans to secure them.
• Enhance employee value proposition: Understand and address what employees seek from the business.
• Engage with the workforce: Regularly gather and act on employee feedback to understand their needs and aspirations.

Talent shortages are a critical issue, particularly in care and primary health sectors. While 72% of businesses understand their long-term talent needs, only 11% have detailed plans in place. Successful businesses leverage vocational passion to attract and retain talent, aligning staff values with organisational goals and fostering a supportive work environment.

“In many of these roles, people see their jobs as vocational,” Barrie says. “The most successful businesses are leveraging that to secure talent.”

Innovative solutions, such as offering accommodation, could also enhance recruitment efforts. “Senior management has to be fully engaged,” Barrie adds. “One of the key issues at failing healthcare businesses is often a remote management team and/or owner.”

• Strengthen supply chains: Avoid over-reliance on a few suppliers and consider local sourcing.
• Prioritise sustainability: Engage in sustainability audits and data requests with partners.
• Enhance value chain collaboration: Foster transparent engagement between health and social care sectors.

Collaboration offers significant advantages and leaders in the sector recognise this. For example, 37% regularly or always collaborate with suppliers on product and service improvements and strategic decisions, and 29% say the same of their customers.

However, while margins in the sector are tight, healthcare businesses may need to consider whether their approach to procurement is too cost-focused. Only 63% of businesses in our research say they see supply chain resilience as more important than speed and cost. And, surprisingly, only 56% are more likely to select a supplier that shares their values even it is not the cheapest.

Collaboration on increased sustainability may be an effective way to move towards closer relationships. Already, 39% demand verified sustainability data from their suppliers and 35% monitor their suppliers’ ESG (Environmental, Social, and Governance) performance.

“Developing ESG criteria for selecting suppliers may not mean a supplier is discounted on day one but it may mean further information is required,” says Barrie. It also makes sense to investigate waste reduction and circular economy practices – this could mean partnering with suppliers to reduce packaging waste, the return of unused items for recycling or the use of products that have longer life cycles.

Leading with intent

Healthcare leaders must navigate ongoing challenges, particularly around talent and costs, with clear objectives and passion. Effective leaders listen to diverse advisers, experiment with innovation, and maintain a long-term vision, guided by quantitative and qualitative data.

“The key for management teams is to have that that North Star view of where they want to take the business,” says Barrie. “Then they use internal and external data to guide the journey.”

By acting now to prioritise change, your business could be more ready to boost future resilience, meet market demand, reduce costs, or access capital. Visit our other pages to see how we could support you:

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