The need for business resilience
16 March 2020
We all recognise that we live in a fast changing and increasingly globalised world. As a business owner you have two approaches. Either you can try the ostrich approach and close out those external influences, or you can design your business to respond appropriately when change happens. We all know the right answer, and so building business resilience is key.
However, similar to designing buildings in earthquake zones, something we are all too familiar with in New Zealand,the answer is not always to build the most rigid structure, but to find ways to allow the shock to flow through the organisation and find ways of adjusting and absorbing as change happens. Preparing for uncertainty creates agile businesses who can seize opportunity and weather any storm.
As the business owner you are central to this, and your leadership is key to helping the organisation design for resilience. No organisation is impervious, as we have seen from some of the high profile failures of the last decade. Your business is at risk from loss of key customers, attrition of key staff, damage to your supply chain, the entrance of new competitors and the disruption from new ideas and ways of working.
But you can prepare through some simple changes. Questions you need to ask are:
- Is your decision making process based on evidence and agile?
- Do you understand your chosen markets and what your customers value?
- Have you planned for disruption to your supply chain?
- Do you have over exposure to one product or market?
- Are your finances structured right?
- Do you have the right information to make the right decisions?
- Have you protected key staff and expertise?
Change will happen, whether it is loss of customers, failure of suppliers or changes to markets. You need to prepare for this so you know how to react to give your business the best chance of success. Contact your local BDO office for more advice on how to prepare your business.
Information included in this insight was last updated on 16.03.2020