Resilience requires both agility and speed

Organisations are always facing disruption, whether social, economic or geopolitical disruption, but once-in-a-lifetime events, such as the recent pandemic have certainly stress tested the worldwide business community’s resilience and uncertainty readiness. However, it’s more than just survival. True organisational resilience is about uncovering value and dynamically shifting business focus to address the market.

A typical crisis unfolds across three phases. Respond, during which the company deals with the present situation and manages continuity. Recover, when a company learns and emerges stronger. Thrive, where the company prepares for the ‘next normal’ with robust, and resilient strategies. The challenge lies in being able to nimbly consider all three phases concurrently and allocate resources accordingly.

Resilience is described as the ability to respond to a crisis and/or to recover quickly from difficulties. Having strong organisational resilience can help not only to persevere in the face of adversity, but also adapt, rebound and prosper. The pandemic has forced many organisations to become more efficient, to rethink their product, business and operating models driving them to become more agile – all of which could potentially drive higher productivity growth.

This rapid change has, for some, resulted in some decision-making without all the facts. Organisations do not have enough time or information to make, often difficult, decisions that may affect both employees and the business itself. Leaders have had to rapidly adapt their business models to survive during extremely uncertain conditions.

The pandemic fast-tracked large-scale digital transformation in organisations and taught businesses a great deal about their agility and resilience.

Finance will have to prioritise and communicate during business disruptions

When a crisis first occurs, it’s important to carry out a systematic appraisal of the current situation and map out a range of scenarios including any financial implications. Any assumptions will need to be regularly checked and updated with latest information. For CFOs it may mean daily communications across the executive leadership and board members, depending on the state of the company and potential financial impact.

Depending on the scale and impact of the crisis, it’s worth evaluating business as usual processes and identifying those that can be eased or delayed without damaging the business or risking control breakdowns.

Ensure regular, clear and consistent internal communications of any actions and changes, updating any internal systems or intranet pages, providing answers to frequently asked questions. And, if there is an impact of staff, for instance during natural disasters or the recent pandemic, work closely with HR on possible scenarios and communicate with the teams affected.

Communicating with investors during a crisis is critical, especially as uncertainty is the last thing that investors want. So, providing them with information within regulatory guidelines about what action the organisation is taking to deal with the crisis and how it may impact performance is essential.

Regulators are another key stakeholder group during a crisis, who may require current and forward-looking information.

For further information, including how a finance crisis checklist, download our finance resilience whitepaper.

Our next blog includes a checklist of the specific areas where finance plays a crucial role during (& after) a business disruption.