An unforeseen crisis can push businesses past breaking point, wreaking havoc on financial stability, employee wellbeing and business operations.
We saw this recently when the global COVID-19 pandemic rocked organisations globally; destabilising supply chains, overwhelming medical
systems and forcing companies to change the way they operate. We have seen first-hand the devastation caused by a lack of preparation, so
how can we ensure our businesses are positioned to weather future crises?
Benefits of becoming a resilient business
Businesses that successfully implement resilience strategies experience several benefits which compound to provide a significant advantage over their competitors.
1. Anticipation benefit: Businesses with clear strategies can articulate resilience plans prior to a crisis, which leads to advantages following a crisis.
2. Impact benefit: A comprehensive resilience plan prior to a crisis event will drastically improve a businesses ability to absorb the initial shock by enabling a more agile response.
3. Recovery speed benefit: A resilient business possesses the ability to rapidly rebound from shock by quickly and accurately identifying and implementing next steps.
4. Outcomes benefit: Truly resilient businesses will come out of crisis events stronger than prior to them, through increased capacity to
work in a post-shock environment.
We are going to say your financial position is the most important part of business resilience! Think about it this way though; being in a good cash position is like having a buffer. It helps you absorb the knocks and blows, and it gives you the luxury of time. Time to generate alternative ways of reacting, time to ride it out or time to put off a decision until you’re not under pressure or emotional.
The key to successful cash management is to monitor all the elements of the working capital cycle. The faster the cycle turns, the faster your trading activity converts into available cash. Introducing relatively small changes to your financial management practices can result in significant improvements to your cash position and better resilience against downturns in income.
When systems and processes don’t change over time, they not only become a bottleneck, they also become a chink in your resilience armour. Quite often, in a busy business, systems and processes go unchecked and become ‘the way we’ve always done things’. But in my experience, the businesses that thrive are those that have an appetite for innovation and improvement. It makes sense to start your process improvement strategy with the areas of your business that aren’t working well. Generally speaking, if you have management, team or customer frustration around a particular process area of your business, you have a process problem. And that’s a resilience problem.
Consider how you currently deal with issues like supply chain interruptions or employee absences. What are you dependant on to continue
operations? What could you do without in the short term and still deliver your service? Knowing your dependencies will help you determine
your risk factors and decide what you can tolerate and what needs to improve.
Building a Resilient Culture
In the workplace, an employees’ ability to manage anything from a tough workload to a frustrating colleague will largely depend on how resilient they are. And while it’s true that some people seem to be born with more resilience than others it doesn’t mean that it’s a skill which can’t be learned. Nurturing resilience in your team has so many benefits – not least of all that they’ll be better able to manage stress, a risk factor for anxiety, depression and burn-out.
While some stressors can’t be anticipated (pandemics, floods etc), some common work stressors can. Having access to go-to guides, processes
and resources gives people the tools to troubleshoot when unexpected challenges arise. When team members are encouraged to learn, innovate,
speak up, seek support and help others you create a culture of empowerment and resilience. If you don’t have a large team, utilise your
network for support and as a sounding board for ideas. Resilience ultimately depends upon being able to generate alternative ways of
reacting to situations so use as many pairs of fresh eyes as you can.
Resilient people and businesses know that stressful situations don’t last forever, and negative feelings will dissipate. Remember, you and your business are not passive recipients of stress or powerless to do anything about it. There is always something we can do to change or improve a situation.
At The Money Edge we recognise the dynamic and increasingly unpredictable nature of running a business, enabling us to develop comprehensive resilience strategies. To find out how we can ensure you are equipped to not only bounce back from disruptions but come back stronger than ever, contact us today 07 4151 8898.