Navigating your organisation through uncertainty
Not since the 2007-08 financial crisis have businesses had as many unknowns on the horizon as they do today.
Against a backdrop of rapid change, and a lack of relatable data models for such wholesale disruption, organisations face the challenge of forward planning. But in this planning cycle, business leaders are presented with one of the biggest, and perhaps most interesting, questions: How do we best prepare our companies for the unexpected?
In speaking with our own clients, two elements come to the forefront. The first is ensuring the organisation is able to pivot as governments adjust their lockdown measures and economic forecasts shift on a weekly basis — this is agility. Secondly, businesses must focus on transparency. They have to be transparent in their communications with employees, partners and customers alike — even when it is difficult.
Agility in the face of uncertainty
Agile businesses are able to react quickly when faced with change. They can respond decisively to customer demands, market shifts, and competitive threats. This is because many have implemented continuous planning — an approach to planning where static annual or bi-annual plans are replaced with a continually updated plan — setting them up to weather uncertainty. In fact, a recent study from Adaptive Insights found companies which implement continuous planning are 1.5 times more likely to be able to adapt quickly and re-forecast within just one week. These companies are also four times more likely to respond quickly to market change. Underpinned by continuous planning, agility is an invaluable asset, and the essential defining attribute of organisations able to respond to this crisis and chart a new, resilient course for the future.
Agility in planning, agility in execution
Under pressure to survive and maintain business continuity, agile finance teams — which have implemented continuous planning — have a competitive advantage as they can rapidly plan and replan as the landscape shifts. For example, the global manufacturing industry is in constant flux currently — facing everything from staffing restrictions to fluctuating prices of imported components. These unpredictable changes have meant that the likes of Belkin and Hitachi, to name but a few, have had to react quickly to the changes in the supply chain ecosystem to ensure they can source materials and that the associated costs have minimal impact on their margins. Once the impact has been assessed, they must execute on decisions made by the business, analyse the results, and then repeat.
As the business environment alters on an almost daily basis, being able to adapt planning from a yearly or quarterly activity is a matter of urgency. Having the ability to quickly model different scenarios gives management teams the insight to make informed discussions around critical pain-points, and make decisions that will sustain the business. To capitalise on this, businesses need the systems, processes, and resources which allow them to execute these decisions at pace. This relies on teams getting the most out of their technology investments. Ultimately, processes which enable businesses to plan continuously, forecast constantly, and model virtually anything will become increasingly critical in times of uncertainty.
It is easy to discuss rapid change at the executive level in the face of a crisis, however communicating this with the wider organisation, customers and partners, is an altogether different challenge. Transparency can be easy during good times, but uncertain periods provide the true test in this area.
Transparent communications in murky times
Having the agility to plan and execute rapidly provides a significant competitive advantage, however, it can also cause problems if external and internal communications aren’t managed properly. A sudden change in operating conditions or a worrying financial forecast is unsettling for both employees and external stakeholders alike. And it is during moments of crisis, such as the one we’re facing, that transparency is crucial to maintain trust.
Recent changing working conditions, economic disruptions, and constant new guidance delivered by governments and businesses have an inevitable impact on employee morale. Having an open line of communication about what is happening outside of the business, and how the company will react internally demonstrates honesty and builds confidence among the wider organisation. This has been illustrated perfectly by the likes of Amazon, who swiftly created a COVID-19 help bank as soon as the pandemic measures took effect. Having a single point of truth which can be continuously updated is vital in times of trouble, as days of silence can destroy years of hard-earned trust. Being clear and transparent despite global uncertainty helps build stronger relationships with employees, which will pay off the next time leadership needs to navigate challenging waters.
Another point of consideration is employee retention. As economies attempt to restart across the globe after a temporary shutdown, we are likely to face a more competitive talent market. People will often stay put during times of uncertainty, but once things improve, their loyalty will depend on how they were treated during challenging times. Businesses must consider how their approach to planning and communications now will impact their ability to accelerate out of the other end of this crisis.
As we continue to move through the year, companies must take steps to ready themselves for the impact of change. Improving agility and focusing on transparency are two ways organisations can remain strong — no matter what lies ahead.
This article was contributed by Tim Wakeford, VP Financials Product Strategy, Workday
For more information on business topics in Europe, Middle East and Africa please take a look at the latest edition of Business Chief EMEA.
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