How do you prepare your organization for the road ahead when the road ahead is unclear? Businesses have been operating in a time of profound uncertainty, and the speed of change is only increasing. So how do you break down what feels impossible into manageable, actionable steps?
Start at the Beginning
The speed at which the pandemic impacted businesses exposed gaping holes and issues for many organizations. For some, it was in their supply chain. For others, it was succession plans, or lack thereof.
“Organizations must remedy the vulnerabilities the virus exposed,” says Partner Joe Kristan. “You have to look across your entire organization. It may be in your capital structure—too much debt can make you fragile. It may be in your systems, especially if you weren’t adequately prepared for a remote workforce.”
Leaders can move forward by looking back and taking a holistic look at their organization. “Focusing on your core competencies, eliminating product lines or services that distract from your core business objectives and providing superior customer service will keep businesses viable,” says Partner Shelley Earsley.
What can you do?
Begin with your financials.
"Liquidity should be top priority for businesses," says Partner-in-Charge of Business Valuation, Chad Flanagan.
Make sure you:
- Conduct financial modeling to understand how various scenarios impact cash flow and liquidity
- Manage your assets on the balance sheet
- Increase your turn on inventory and accounts receivable
Rather than hiring internal employees or specialists, organizations often turn to outsourcing to complement the skill sets and knowledge of their team and to grow their thinking. Outsourcing services allows organizations to scale quickly and offer support through transitions or periods of short staff.
Embrace New Technologies
The digital revolution continues to impact the way we do business. A 2023 HLB survey found that 52% of businesses plan to accelerate modern technology adoption to improve workforce productivity. Respondents identified AI (50%), cloud (47%), and renewable energy technologies (40%) as the most important for businesses over the next 5 years.
Strengthening digital capabilities will be a key component of future growth and innovation for leaders. This has never been clearer than now. Organizations have had to embrace digital transformation almost overnight as physical office spaces and store fronts closed.
“In the last two decades, organizations that have separated themselves are the ones who have committed and embraced digital business,” says Ross Manson, Chief Practice Officer. “Given the current state, digitization of business becomes an even bigger separator than in the past.”
Survey of Business Leaders 2023
The 2023 HLB Survey of Business Leaders, “Leading Through a Perfect Storm,” is now complete! The report explores essential leadership behaviors needed to successfully navigate through times of crisis. Gain insights from both peers and experts on how to survive today and evolve tomorrow.
Understand Your Data
With digital transformation comes more data than we’ve ever had before. Understanding and harnessing that data will be critical for businesses that wish to make strategic growth decisions.
The future of business is based on the ability to make informed business decisions in real time and based on accurate data. This means relying on far more than just your financial statements. Business leaders should embrace leading indicators like operational analytics to get a clear snapshot of their organization’s current state and where they’re headed.
What can you do?
67% of business leaders are committed to improving operational efficiencies while at the same time investing to innovate and grow. Discover how operational analytics can help you reposition your organization
Readiness to Adapt
It all starts with innovation. “You can’t always use the past to predict the future,” says Partner Laura Srsich. “We now know that anything can happen to disrupt business. Thinking way outside the box for preparedness will become an integral part of all businesses, from planning to budgeting.”
Yet, even in turbulent market conditions, business leaders believe in their organizations' resilience. 79% are confident about their company’s ability to grow over the next 12 months. When it comes to new business models, leaders should develop three to four business models that outline various plans for success. Developing multiple scenarios encourages a more deliberate path forward, eliminating the tendency to choose the middle path.
Truly resilient businesses will be those who focus on staying relevant. They will take a deep look at what they offer, from product to consumer experience, and take the necessary steps to enact change.
“All business leaders should start thinking like a start-up company,” says Manson.
“Companies have to stop doing things just because they’ve always done it that way,” says Flanagan. “Now is the time to revisit short- and long-term strategy. How can you use digital solutions, new markets or products and emerging technology to move forward?”
What can you do?
Focus on customer loyalty and added value.
“It’s not the ‘freebies’ or giveaways that instill loyalty ... that only cheapens the value of your relationship. Continuing to add value to services you are charging for not only retains the customer but makes them more loyal as a valued partner.”
Embrace a Flexible Workforce
While the shift to a remote workforce has proven that things can get done from a distance, remote working has also presented challenges.
Flexible working arrangements are key to an organization’s future. The majority of business leaders report exploring more flexible work arrangements in order to attract and retain future talent.
“Employers who can use the recession to hire great people cast adrift by the recession will be the long-term winners,” says Kristan. “Recessions don’t last forever, and strong employees will put you in a position to take advantage when recovery comes.”
For Earsley, success comes back to your employees. “The key is strong leadership and employee retention in essential roles. When an organization emerges on the other side of economic difficulties, it is critical to have retained key employees with their talents and loyalty to more rapidly make the business successful again.”
It’s Time to Focus on Your Business
While it’s hard to know what’s around the next corner, organizational leaders who re-evaluate their business model, look for ways to embrace digital transformation, prioritize their employees and learn from their data will be better positioned to move forward and plan for the future.
The steps you take now will be critical for the future of your business. Here’s how to move forward with digital-first thinking in mind.