Clive Stevens, Chairman at The Frameworks, explains how you can make your business more resilient.
Facing up to an unpredictable future requires resilience. The Covid pandemic threw business plans into disarray and many companies are still struggling to keep their doors open. Those that have survived, often adapting to a new way of working, are now prioritising strategies that will maintain their resilience when the next challenge or crisis comes along.
Covid underlined that we live in a VUCA world – one that’s volatile, uncertain, complex and ambiguous. It’s an acronym that’s been around since the 80s, but when the business landscape is changing so rapidly, it feels even more relevant today. Tech is constantly evolving, as is regulation, which leads to higher customer expectations in an increasingly connected – and competitive – global market.
The sheer pace of change can make it difficult for businesses to predict and respond to challenges and turn them into opportunities. So, how can businesses develop resilience?
Be prepared to listen – and listen to be prepared
To be in a strong position to deal with future challenges – even unforeseeable ones – business leaders need to keep track of what’s going on in the world and within their own organisation. If a leader doesn’t listen to people outside – and inside – the business, they are unlikely to spot challenges or opportunities. Take Kodak for example – it failed to adapt its camera business to digitalisation and went into decline.
Business leaders should actively seek advice. Some will be paid counsel from the likes of accountants, consultants and lawyers, but some will be informal. At The Frameworks, we rely on a veritable kitchen cabinet of influence to stay ahead. I am involved with the Institute of Chartered Accountants of England and Wales (ICAEW) on their Council and am also Chair of Trustees at the Turner Contemporary in Margate, and so I get exposed to a variety of influences that I can bring back to The Frameworks business.
This knowledge enables a business to react faster to problems as and when they arise. While it’s impossible for an organisation to eliminate every uncertainty, a business that exposes itself to different views mitigates against risks far more than one that thinks it has all the answers already.
Difference is power
The people that make up your organisation impact the business’s resilience too. A diverse team provides you with a range of voices that reflect your audience, which helps a company to identify and respond to customer concerns quickly. It can be challenging to manage a diverse team because it means dealing with a range of sometimes conflicting views. But diversity is redundant without inclusion. People need to be shown trust and empathy if you’re going to unlock their skills and knowledge. This comes back to listening. If a business is treating diversity as a quota rather than a business strategy, it will never see the benefits. Leaders need to walk the floor. Engage with their people. Listen to what they think.
And diversity should be at board level too. It’s not enough to discuss varied points of view; those voices need to be in the room. A study by BoardReady found that age and gender diversity among directors of companies on the S&P 500 correlated with better financial performance during the pandemic.
A model for resilience
Listening to advice will help business leaders to identify upcoming hurdles, but the way a business is structured and how leaders focus their energy will determine how well a business can navigate problems when they arise.
There are only four ways to increase profitability: cut costs and save, go out and find new customers, sell more to existing customers, or put your prices up. Three focus on sales, and that’s an important consideration when building resilience. In times of difficulty cutting costs might seem like the only way out. But if you’ve built a business that focuses intelligently on sales, there’s a possibility of avoiding that. How? Look at who you sell to.
If you’re not relying on one client – or even one market – you will be more resilient to changes in demand, because the risk is spread out. A broader customer base boosts resilience.
Sustainable businesses put sustainability first
This model for resilience relies on businesses engaging with current trends too. Today, businesses need to think about – and act on – sustainability. It’s the number one boardroom discussion right now, and a major focus for many of the brand and campaign strategies we develop for our clients. And for good reason: there is no business on a dead planet.
Customers expect companies to engage with sustainability. Companies that want to ensure resilience need to demonstrate they are taking it seriously, such as adopting some of the UN’s 17 Sustainable Development goals. If a business doesn’t, it may find lack of action impacts its ability to increase or boost sales as its customer base wanes.
A digital advantage
Fast-changing technology can seem like a challenge, but it can be an opportunity to grow a business, broaden your customer base, and ultimately boost resilience. The rise of data has transformed modern business models. Big FAANG companies (Facebook, Amazon, Apple, Netflix, and Google/Alphabet) use data to get, and stay, ahead. That’s resilience. Data can help a business to understand their customers’ needs better and offer more personalised services. It also helps a business to determine the best way to talk to potential customers and even the best time and place to target them with adverts. This depth of customer knowledge can boost sales and enable a company to manage uncertainty. Even businesses that don’t have sophisticated systems can use data to boost sales. A small company can compete with bigger businesses thanks to the levelling power of digitalisation.
The pandemic was an unexpected challenge, one that many businesses sadly didn’t survive. Luckily remote working was possible for The Frameworks team, and a broad customer base helped too. But, for some businesses, that wasn’t the case. Pubs, for example, had to be agile. Those that innovated, expanding their services to include things such as meal-delivery services, demonstrated the energy needed to bounce back. When a challenge is as unpredictable as Covid, resilience can simply mean taking bold action to turn adversity into opportunity – and survive.