The global nature of today’s business landscape requires companies to not only maintain their competitive edge but to also remain agile and adaptable to unforeseen circumstances if they are to survive in the long term.
From economic uncertainty and supply chain disruptions to cyber threats and natural disasters, there are numerous factors that can potentially derail business operations and cause major setbacks.
It is paramount that businesses implement strategies that enable them to weather such storms and react in swift and effective ways.
However, despite acknowledging its importance, many organisations face barriers to achieving greater resiliency, as highlighted in Deloitte’s 2022 Global Resilience Report.
From scarcity of talent and competing strategic priorities to a lack of organisational understanding of resilience, these common challenges cited by business leaders can leave their organisations vulnerable to disruptions when they arise.
To mitigate the risk of blindspots affecting operations, this article has outlined several strategies to help businesses build resilience, enabling them to navigate unexpected and turbulent times with greater agility, competence, and success.
Expect The Unexpected
Today, businesses must contend with unique challenges and threats. This heightened risk and unpredictability is reflected through the World Uncertainty Index (WUI) which charts an upward trend in factors like economic uncertainty, stock market volatility, and geopolitical risk around the globe.
Due to the interconnectedness of business dealings and global markets, organisations are reliant on a complex web of factors that influence everything from their talent pool to their customer base and supply chain operations.
A break in the chain can have far-reaching ramifications which, if not handled swiftly, can impact their operations and bottom line as well as their reputation.
By expecting the unexpected, businesses can put contingency plans into action to manage various risks, enabling them to mitigate the damage that would otherwise occur.
This can be achieved by carrying out risk assessments within various aspects of their organisation such as their supply chain, technology, and staffing, to identify weaknesses and gaps that need to be addressed to make them less vulnerable to potential threats to their business.
Prepare A Plan
Without a well-thought-out and robust plan to deal with unforeseen eventualities, businesses can face significant disruption and financial losses which could ultimately lead to their failure.
To avoid this scenario, businesses must remain aware of the environment in which they operate by staying informed of the various challenges that could impact their operations.
This includes following economic indicators like interest rates and inflation, as well as keeping an eye on industry-specific forecasts, consumer spending habits and factors that could disrupt their supply chains such as cybersecurity breaches, transportation challenges and trade disputes.
As a result, businesses can develop comprehensive plans to respond to such emergencies and minimise the impact on their operations.
Whether it’s creating backup systems to avoid loss of data, arranging alternative suppliers to ensure supply chain continuity or testing remote working setups for staff, the specifics of each contingency plan will depend on the nature of each business and its unique operational needs.
Effective Financial Management
Without sound financial planning, a business may encounter difficulties in paying its suppliers or employees on time and meeting other expenses necessary for the smooth flow of its operations.
Effective financial management is, therefore, essential to keep a business afloat during challenging times.
This includes sufficient cash reserves which give a business the liquidity it needs to meet immediate and unexpected costs, enabling it to continue its operations during lean times, as well as reduce its reliance on borrowing.
In contrast to a cash-rich business, one that is highly indebted is more likely to find itself in difficulty during turbulent times.
With less money coming in, the potential to default on its outstanding loan payments is higher, leading to potential legal action from its creditors.
The financial strain caused by such situations may mean a business is no longer able to continue its operations, eventually resulting in it going into administration or insolvency.
It is financially prudent for a business to regularly review where its expenditure can be cut, enabling it to reduce its exposure to debt or other funding sources.
By doing so, it will be in a much healthier financial state and better equipped to deal with unforeseen challenges and potential disruptions to its business.
Expanding Revenue Sources
A business that is able to generate new revenue streams with agility and speed is more likely to survive during difficult times than one that relies solely on one source of income.
By expanding into new areas that have not been compromised or badly affected by current situations, a business can open its doors to new customers and income streams, enabling it to continue its operations despite the difficulties it faces.
This requires a business to review its current offering and assess its vulnerability to changes in market trends, consumer habits, technological advancements and other areas that could impact demand.
The result of this exercise may lead to the development of new products or services using existing production supplies and materials, allowing it to pivot into a new market where demand continues to exist.
By doing so, such businesses can capitalise on new opportunities and shift into other areas, allowing them to explore previously untapped revenue streams and continue their operations despite the setbacks they encounter.
Through the implementation of these strategies, businesses can build resilience to unexpected challenges and disruptions to their operations, enabling them to overcome adversity and sustain their success over the long term.
