Decode the market: What leaders are letting go of before 2027
Every business leader right now is contending with the same uncertainty: tariffs that shift without warning, interest rates that behave differently than expected, an AI conversation that will not slow down, and a workforce that looks nothing like it did five years ago. And yet some organisations keep pulling ahead while others stall. The difference rarely comes down to having better information. It comes down to which assumptions a leadership team has let go of.
We brought together four Baker Tilly leaders, spanning corporate finance, tax, people and culture, and digital and AI, to talk through what they are seeing across their client conversations. As we touched on in last month's What we learned from six months of client conversations: A ground-level POV, this is the natural next step in a year defined by preparation over prediction. Here is what they say businesses need to unlearn heading into 2027.
Growth used to cover for inefficiency. Buyers are not rewarding it anymore.
For a long time, a growing top line could paper over a lot of operational mess. That is no longer holding true, at least not in the deal market. "The biggest shift I have seen in the Canadian M&A landscape over the last 18 months is a move from a finance-restricted market to a quality-restricted market," says Mike McIsaac, National Managing Director of Corporate Finance. Capital is not the constraint anymore, private equity has plenty of it sitting on the sidelines, but buyers have become far less forgiving. They are scrutinising recurring revenue, customer concentration, and management depth long before they talk price. A quality-of-earnings report is not a formality anymore, according to Mike McIsaac, National Managing Director of Corporate Finance, it is often the deciding factor in whether a deal closes at all.
The same recalibration is showing up in how clients think about technology spending. Nisha Soundararajan, Director of Digital Solutions in our Calgary office, has seen the underlying question change.
"Clients are shifting from asking whether they should invest in digital and AI, to asking which digital and AI solutions will deliver measurable business value and drive results," she says. Buying more tools or expanding a technology stack for its own sake was never the goal. The businesses pulling ahead are the ones that first identify a specific, measurable problem and then evaluate whether a solution can effectively address it. Technology investments are increasingly being judged by their impact on efficiency, profitability, risk reduction, or growth, rather than by the technology itself.
Talent shortages looked temporary. They have become structural.
A year or two ago, a lot of leaders treated hiring difficulty as a passing phase. Nobody on this panel sees it that way anymore. Riccardo Zerbino, Tax Partner in our Montreal office, points to a demographic shift few clients are watching closely enough. "There is a talent gap, and I think it is the shift no one is really talking about," he says, noting that Quebec recently recorded its first ever twelve-month period with more deaths than births. Fewer people are entering the workforce at all, across nearly every traditional trade and profession. "Retention used to be a tool," Riccardo Zerbino, Tax Partner adds. "Now it is a necessity. It is no longer a competitive advantage, it is a basic requirement to survive."
Tracy Mohn, National Director of People and Culture, frames the same pressure from the leadership pipeline side. As AI takes over more of the entry-level work that historically taught junior staff how to think and judge, firms risk quietly hollowing out their own bench. "The cost of underinvesting in people is that technology becomes an expense rather than an advantage.," Tracy Mohn, National Director of People and Culture, says. " Organizations can purchase the technology, but only their people can translate it into performance, innovation, and growth." Mike McIsaac, National Managing Director of Corporate Finance sees the consequence of this play out at the negotiating table: buyers now expect 18 months to three years of demonstrated succession planning before they will trust that a business can run without its founder.
Annual planning used to be enough. Now it is only the starting point.
Perhaps the clearest theme across all four conversations: the leaders who are performing well have stopped treating the annual plan as a fixed document. "We really cannot predict exactly what 2027 is going to look like, so rather than trying to forecast a single outcome, we need to build the ability to adapt as conditions change," says Nisha Soundararajan, Director of Digital Solutions. "Preparation in uncertain times means building the adaptive capacity to make changes and course corrections along the way." Her team advises clients to pilot initiatives in small, reversible steps rather than commit to a predefined scenario.
Tracy Mohn, National Director of People and Culture, describes the same shift in mindset, not the absence of a plan, but a different relationship to it. "The era of having a fixed, fully mapped-out plan is becoming increasingly rare.” she says. Today, success depends less on certainty and more on the ability to move forward with the information available, adapt quickly, and continuously learn along the way." Riccardo Zerbino, Tax Partner sees this play out operationally with his own clients, who have moved from reviewing cash flow once a year to reviewing it monthly, and from a single scenario to several. Mike McIsaac, National Managing Director of Corporate Finance is recommending the same discipline internally, encouraging clients to adopt cadenced management systems rather than a static, once-a-year planning cycle, and to build in two or more years of lead time on structural and tax decisions given how quickly legislation continues to shift.
Preparation, not prediction, is what carries into 2027
Asked what belief about the market they each personally held a year ago that no longer holds true, every panelist landed on some version of the same idea. Mike McIsaac, National Managing Director of Corporate Finance no longer expects a sale to end in a single cheque and early retirement, deal structures now leave sellers carrying risk well past closing. Riccardo Zerbino, Tax Partner expected volatility that never fully arrived, and has learned to plan for stability as carefully as he plans for disruption. Tracy Mohn, National Director of People and Culture, no longer assumes that having a plan means the plan will hold. And Nisha Soundararajan, Director of Digital Solutions has stopped trying to predict a single future outcome and instead builds flexibility into every recommendation.
None of the four experts are promising they know what 2027 holds. What they agree on is this: the businesses that keep outperforming are not the ones with the best forecast. They are the ones that built the capacity to adapt when the forecast turns out to be wrong. If any part of this reflects where your business stands right now, that is worth a conversation with your Baker Tilly advisor.
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