With global economic indicators looking very much like those in the lead-up to the global financial crisis (GFC), businesses that make the effort to boost their resilience will have a much better chance of survival.
The global economy is challenging, from interest rates and inflation to ESG demands and the threats and opportunities of the rapid proliferation of generative AI.
As insolvency rates tick up above pre-pandemic levels and access to finance tightens, every leader is (or should be) wondering if their business will be around in six-to-12 months – and taking action to ensure that it is.
Here are five key ways to strengthen resilience, garnered from almost three decades of working in corporate turnaround and business transformation.
1. Know your purpose
To survive long-term in business, you need the right strategy, appropriate funding and the right team to execute your plan. You also need a powerful ‘why’, or purpose.
Create a one-page strategic plan and ensure your ‘why’ is incorporated into your marketing and recruitment collateral.
To survive long-term in business, you need the right strategy, appropriate funding and the right team to execute your plan.
Work on your brand promise, your elevator pitch, your long-range goal (even 15–20 years) and understand who your ideal customer is.
Having this in place as part of a clear, concise strategy helps you and all your stakeholders easily see where you are heading. It helps them buy into that journey.
Most importantly, make sure that your management team is aligned to the strategy.
2. Foster habits for success
The businesses that survived the GFC, the COVID-19 pandemic and other world economic events are the ones that fostered the habits that lead to success.
Habits, such as communication, are so very important when times get tough.
Everything from sales team effectiveness to whole-of-organization morale can benefit from daily and weekly huddles and quarterly goal setting.
Implement or maintain regular employee and customer net promoter score surveys so you’re getting real-time feedback.
3. Critical financial tools
You can’t succeed unless you have the business intelligence in place to help you understand and manage your business, in particular your working capital cycle.
Must-haves include financial and operational dashboards, a rolling 13-week cashflow forecast and a three-way financial forecast projecting your profit and loss, cashflow and balance sheet.
These tools provide real-time critical information so you can make key strategic decisions more quickly.
They will help you to gain an edge over your competitors and strengthen the confidence of your financiers and shareholders.
4. Leadership, governance and culture
Getting these three right gives leaders peace of mind and greater confidence that they are on track for stronger earnings and cashflow and a more resilient business.
With so much of business success coming down to the skill of management and putting the right team and culture in place, you need to work on developing the business’ values, leadership principles and beliefs. Great programs to onboard, train, reward and retain are a must-have.
You need to work on developing the business’ values, leadership principles and beliefs.
Foster a culture that allows staff and leaders to take care of their own mental and physical resilience. This puts you in the right mindset to make tough decisions.
Time out could involve anything from cold plunges and breathwork to exercise, time spent outdoors or meditation. Find what works for you and your team.
This is not just ‘feel-good’; it’s linked to productivity. Boosting energy, sleep, clarity and immunity are vital for putting business leaders and their teams in the right frame of mind to make tough, quick calls.
5. Track resilience so you can improve it
It’s the burning question: How resilient is my business? Will we survive challenging economic times?
Vantage Performance has utilized two decades of experience, along with insights from world-leading business theorists, to create the Vantage Resilience Index (VRI), a metric that is an accurate predictor of future performance and business success.
The VRI is a free resource for businesses worldwide that assesses how resilient and viable a business is, what areas need work and how your business compares against leading businesses that have gone through previous recessions and survived.
Putting key resilience actions in place can go a long way to ensuring you successfully navigate your way through what could be a prolonged downturn.
Business leaders complete 50 yes or no questions in less than 10 minutes (with no financial data disclosed). They then gain free access to a VRI dashboard that benchmarks their strengths and weaknesses against the traits that highly profitable enterprises around the globe have in common.
This provides an accurate indicator of how a business will respond if thrown a curveball. With so many leaders afraid to ask for help or acknowledge warning signs, this tool allows them to confidentially assess what’s happening in their business so they can right the ship before problems grow.
Putting key resilience actions in place can go a long way to ensuring you successfully navigate your way through what could be a prolonged downturn.
Michael Fingland is CEO of award-winning consultancy Vantage Performance and has 25 years of experience in corporate turnaround and business transformation. A Chartered Accountant and Australasian Turnaround Professional of the Year, Fingland works with both high-growth and startup businesses.
