In an age of relentless disruption, businesses must abandon traditional approaches and embrace agility to navigate unforeseen challenges like the Covid pandemic. Embracing flexibility and rethinking strategies, from fixed costs to scalability, becomes imperative for thriving in a rapidly evolving global landscape.
The last decade has been anything but normal. It seems these days that disruption is around every corner and businesses need to anticipate what they can’t see coming and respond to events beyond their control as they unfold.
In the past relying on established and proven structures and processes have been effective however the same traditional approach to business rarely proves to be adequate these days.
Events such as Covid have been both long in duration and significant in impact and have required a re-think for businesses to remain competitive.
At one time globalisation was viewed in a positive light. Servicing clients in different geographies on the other side of the world was considered sensible as it provided a commercial hedge.
However, with supply chain disruption and geo-political uncertainty, many businesses have retrenched, streamlined and simplified their operations to remain competitive, mitigating risks and re-priced their core business to service markets that are closer.
The term agility in business is overused these days but it is still part of the solution.
Adopting shorter planning cycles follows on from this, and while financial and people planning should be done on “the most likely” scenario, it’s also important to include “at best” and “at worse” as well.
In the case of the former, what would your business do if people and financial resources were better than expected? What initiatives would “turn the value dial” the most and how would you deliver it?
In the case of the latter, if things end up being worse than expected, what does your organisation resemble under this scenario? Is your business viable? What would you need to curtail or do differently in order to continue trading?
Without doubt fresh thinking is required across all elements of your business to eliminate wastage, liquidate unproductive assets that improves liquidity, and focus on managing key expense items.
Many businesses have had to focus on their property and facilities risks with the “work from home” trend set likely to continue, even if there is an increased expectation that employees should to some degree return to the office.
As AI becomes embedded in our working culture there will be a renewed focus on executive productivity and value from employees. Over time we anticipate seeing a more transient C suite market, as next to facilities, this is often the next most significant cost.
Essentially, where possible, moving fixed costs to variable so that the business can scale either way and maintain healthy margins has got to be part of any strategy going forward.
While bank profits have surged with the lift in the OCR, getting finance remains challenging for many, so ensuring you have diversified funding streams is paramount.
And though the economic global outlook is looking to improve in 2024, it’s still almost certain that disruption in some form or other will continue. Whether it is business led, societal, political, weather related or something else we have yet to encounter, it will appear and impact future business decision making.