Businesses are constantly evolving and many astute owners and senior managers understand that adapting is the key to thrive in a constantly changing scenario. In a world that is continuously developing, change is the only constant.
Just a few months ago, the priorities for several businesses revolved around sustainable growth, whereby a company would invest significant efforts to ensure increased profitability year on year. A company that would not record profits on a consistent basis was deemed as unsustainable.
Fast-forward a few months to 2020 and 2021, the situation for businesses has changed dramatically, as no one would have expected. In view of the disrupting landscape caused by the COVID-19 pandemic, the priorities of businesses have changed dramatically. From focussing on sustainable growth, businesses are now emphasising on survival and business continuity.
To maintain their operations, a number of businesses had to transition their employees to remote working, to adhere to restrictions imposed by the Government. Transitioning a workforce to work remotely is no easy feat, especially with IT infrastructure issues and potential security threats that may arise. Having the experience and know-how to abandon the brick and mortar office, even if temporarily, whilst maintaining adequate levels of operational continuity is no easy feat.
Prior to such a black swan event, it was very common amongst businesses to exhaust their cash reserves rather than leaving idle money. In a prosperous and growing economy, allowing money to remain idle does not represent good business sense, and is deemed to be wasteful as it could be used for other purposes which would benefit the organisation. In an environment of economic contraction, several businesses now understand the importance of allowing healthy cash reserves in case the unthinkable happens. Those businesses who have cash reserves to turn to when the economy isn’t brimming are more likely to survive throughout such a period, and would be in a better position to rebound once the situation normalises. During such dire times, the saying that “cash is king” has never been more relevant.
In view of this experience, going forward you can expect businesses to invest in their operational resilience and crisis management. The priority surrounding the readiness for a crisis is likely to be given higher priority and that way, a business can still survive and thrive when faced with black swan events.