In times of business uncertainty, such as during the current pandemic, the strategic role of finance executives is more important than ever. The timeline for making key decisions about the direction of the business get compressed and the ability to be agile – operating quickly and efficiently – could make the difference between success and failure.
But to be agile, you must be prepared. Mid-sized businesses – those with between 50-250 employees – should focus on a couple of key areas. First, they should nurture their most valuable asset – their employees. In addition, they should look to reduce risk within the supply chain and innovate using technology to support the business through the ups and downs.
Detailed scenario planning is a great way to enable financial leaders to ensure they have the right tools in place to manage business operations. This will identify new skills needed to thrive and highlight where innovative technology can be used as a support system. As our current climate poses new business challenges, with the correct planning, today’s uncertainty can also be a time for optimism and courage. So, let’s dive into three ways mid-sized organisations can prepare for uncertainty.
Uncertain times make for uncertain employees
Uncertainty is challenging for everyone. Whether it is a global pandemic or political turmoil such as Brexit, it is natural for employees to be mindful of what lies ahead. So, what can financial leaders do to keep their people focused, while also helping them manage the feelings that uncertainty brings? First and foremost – be empathetic and understanding that people will respond differently and there is no one-size fits all plan. As stay-at-home restrictions have already eased, general practices will need to be reworked, for example by looking at who can work from home and who would be better served to be present on the front line; this may be due to the job they do or from a wellbeing perspective.
Finance leads should also encourage employees to focus on the present – the things they can control – with an eye to the future. After all, any crisis will eventually come to an end, you just do not necessarily know exactly when that will be. Regular communication with your employees during times of change is crucial to maintaining clarity and positivity. From the outset, daily communication tools should be deployed to update employees on key matters. In the long term, as understanding deepens, organisations can move to weekly or fortnightly communication. Using video calls can be a great way to ensure a personal element is present in remote working. Doing so will have a positive impact on the business as you can work together to channel efforts and emerge from uncertainty stronger. People are the most valuable asset that a business has, so it is crucial they are viewed as a top priority. Keeping the workforce protected through forward planning, frequent rewards, upskilling and cross-skilling, will ensure a secure workforce — something fundamental in times of doubt.
Reduce the supply chain risk
Supply chains are incredibly complex, making them particularly vulnerable to disruption as we can see within today’s pandemic. For businesses dependent on specific materials, you may think they have reliable risk management processes in place to deal with any potential challenges ahead, but global pandemics are unique.
To be prepared, financial leads should form in-depth emergency operations structure, including premeditated action plans for organisation and communication. Key employees should have a designated role within the emergency action plan to promote the security of suppliers and customers. Finance professionals should work closely alongside HR and legal teams to run these scenarios and use them to predict the implications of being unable to get supply to customers. Now is the time to protect the supply chain using a proactive planned approach, instead of a traditional reactive method.
Global organisations should consistently monitor what is happening to their supply chains in countries effected by change. Gaining full supply chain visibility should be a priority, as learnings can be taken from different markets. In addition, finance leads should work alongside stakeholders and their most critical suppliers to prepare for potential material and manufacturing capacity shortages. Communicating transparently about these risks will lead to stronger back up plans and the ability to respond quickly if problems do arise.
Innovate and adapt
Although financial leaders have no control over large issues affecting marketplaces, they can regulate how their business operates during this time. Businesses must source avenues to adapt services and solutions to meet the demands that arise during times of uncertainty. By doing so, they can align organisations as part of the overall solution.
Be fast in adapting to change by using technology that enables real-time analytics and promotes business continuity. Today’s cloud technology empowers businesses to adjust to variables that they cannot control, pushing through obstacles that they may face. Be vocal about this change and bring other along on the journey. Finance leaders should focus on how to promote innovation internally and externally to customers/prospects so all stakeholders can understand the ways you are evolving, why you are doing it, and the benefits this will bring.
Although no one can predict the future, agility and adaptability are the secret to managing the unexpected for a smoother ride. Ultimately, finance leads should build a resilient business continuity plan and in times of crisis, adapt that plan with confidence. Employees should be encouraged to look forward through critical times and focus on the things they can control. Organisations can move forward in sync if employees remain open-minded. However, you cannot underestimate the critical role the company plays in ensuring the employees are engaged, encouraged, and positive – even in times of disruption. Consistent communication is key to this.
Finance leaders of today are no longer referenced to as just the ‘numbers people’, they are now strategic advisors, tasked with providing clarity and consistency across organisations. Their job is crucial, especially as our climate is in a state of flux, and they must fulfil a more complex role:
- They must be agile and provide alternative solutions to manage change
- Pre-plan scenarios with the aid of financial management technologies
- Act upon the necessary change through those preplanning strategies – still keeping in mind the end goal
- Ensure that the supply chain is protected from surprises that lay ahead.
Ultimately, this level of strategic insight that a financial leader can offer is second to none. To manage uncertainty effectively they need to be supported by all business departments in order to act quickly in reducing the potential damage an unstable climate can cause.