There are but a handful of times in the history of our country when there occurs a transformation so remarkable that a moult seems to take place, and an altered country begins to emerge.
Resilience is top of mind. It could influence future growth given the uncertain external environment. And it is increasingly a measure of value among investors as they shun fragile business models.
The importance of a strong balance sheet and efficient working capital are greater during times of stress.
A strong balance sheet was cited by 2 in 5 firms. With financial markets favouring firms with strong balance sheets, 13% named it their top priority.
Specific actions businesses have taken to consolidate or strengthen their financial position include: ensuring they have sufficient cash flow (29%) and sufficient financial reserves (28%); reducing their cost base (27%); and debt level (23%).
Just as descending is the most dangerous section of a climb, business failure rates spike in the recovery phase. Resilience therefore goes beyond shoring up finances.
While a majority of respondents have spent more time on short-term planning, a significant proportion are planning ahead and actively seeking new customers. Larger and more established companies are more likely to plan long-term.
of businesses are actively pursuing new prospects; 38% are focused on existing customers
By necessity, many companies quickly adopted ways of working they had long aspired to during the crisis — from quicker decision making and fewer bureaucratic structures, to empowering employees to solve problems. The data suggest firms are looking to continue these new ways of working.
Conformity of routine can breed conformity of thinking, whereas businesses want diversity of thought and to act differently. Workforce and culture are therefore viewed as critical to resilience.
Signalling cultural change in action, the data show that decision makers recognise the importance of relationships. Businesses feel closer to their customers, employees and suppliers – a remarkable finding given the restrictions in place. This may also accelerate the trend of B2B businesses selling directly to consumers, as witnessed by consumer brands offering direct delivery to homes during this crisis.
This also enhances reputation. A business’s approach to employees, clients, customers and the local community during the crisis will remain imprinted long beyond the flattening of the COVID-19 curve.
identified cultural and financial factors as the biggest barriers to building resistance
|Restoring customer relationships||23%|
|Quick and effective digitisation of the business||22%|
|Access to advanced technology||21%|
|Accessing finance to support our business||21%|
|Access to our workforce||20%|
|Access to working capital||19%|
|Changes to our supply chain||19%|
|Need for re-employment||14%|
|NET – Finances||62%|
|NET – Workforce||62%|
|NET – Technology||37%|
Nassim Nicholas Taleb conceptualises an “antifragile” approach: moving beyond resilience and robustness so that companies can adapt to, and even thrive on, disorder. The resilient resist shocks and stay the same; the antifragile build back better.