By Michael Evans
Although we are approaching the proverbial “light at the end of the tunnel” of the Covid-19 pandemic, the global economy is still months, if not years, away from being restored to the state it was in early 2020. Most businesses the world over have been forced to adjust to significantly lower revenue levels, depleted capital structures, and reduced employee productivity and morale. They have also needed to adopt new approaches to obtaining and serving customers due to Covid-19 quarantine mandates.
While some well-positioned businesses, such as Amazon, Alibaba, and Zoom, have thrived during this period, most middle-market businesses have not. As the world emerges from this exceptionally long “tunnel,” business leaders need to prepare for both growth and resilience in 2021.
Most of us have a good idea of the definition of growth, but resilience is a relatively new addition to our business vocabulary. So here is a good definition to start: “Resilience is the ability to protect and grow value in the face of rapidly changing external conditions.”
To build and maintain resiliency in your business, you must minimize the downside while maintaining the ability to act on opportunities that may present themselves to your business. Business resilience involves financial, operational, strategic, and psychological elements.
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To build and maintain resiliency in your business, focus on four things that will be key to your success:
Let’s take a closer look at what each of these entails, and how they can improve your business resiliency.
Culture: The personality of your organization
Culture is the sum of all of the beliefs and behaviors—at every level of the organization—that shape your company’s strategy and actions. Your culture is like your company’s “personality,” and it can be a help or a hindrance to your success.
Start by revisiting the pillars of your culture: your mission, values, and vision. Here are a few insights as you do this:
- Validate or revise these three pillars based on the impact of Covid-19 to your business.
- Make sure you have buy-in across the entire organization, clear two-way communication between you and your employees, and agreed-upon accountability.
- Create deep connections for all employees by identifying specific ways they can contribute to your company’s mission, values, and vision.
Next, make sure your culture and your strategy are aligned. A top-down culture is not likely to support a strategy that relies on creativity and innovation. Things you can do to align culture and strategy include:
- Deliberately weave messaging about your mission, values, and vision into your planning process, operations, and business development; as a leader you should consistently “walk the talk.”
- Be sure to protect and support the cultural elements that propel your company to success. At the same time, be quick to change or eliminate those parts that are impediments.
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Leadership: Lead with empathy and awareness
Culture and leadership are inextricably bound together, so pay close attention to leadership at all levels of the organization. Culture is affected by line managers as much as by executives, and your company culture plays an important role in business growth and business resilience.
As was the case in the previous year, 2021 is likely to present plenty of uncertainty, so as you focus on leadership, keep these insights in mind:
- Stay nimble and attuned to the challenging circumstances, changes, and uncertainty that will still be with us for the foreseeable future.
- Be aware of how the pandemic has negatively affected your employees. They have been through a lot in the past year—they may have suffered economic problems, emotional issues from isolation, or even lost friends or family members. You can’t have a successful business if your employees aren’t supported, so develop and incorporate a strong sense of caring and commitment to employee well-being.
Change: Assess what needs to change, and how fast
Before you can enact positive change, you must determine exactly what change is needed in your business and how fast you need to accomplish it. As an example, brick-and-mortar retailers with physical store locations have had to quickly adopt internet retailing, new efficiencies in goods delivery, and new approaches to customer acquisition in order to survive the sudden drop in in-person shopping. And many of those retailers that could not change fast enough were forced to file for bankruptcy.
Once you have defined your current state and where you want to get to, you can begin to map the change process. There are lots of different change techniques and methodologies, but the best change programs have the following four traits:
- They are logical and tactical: Be aware of the key levers available to effect the change you want. Some examples include increased revenue due to an improved customer-retention program, or increased employee retention thanks to a stronger employee-incentive program.
- They well planned out: Map out a clear and understandable plan with logical milestones and meaningful metrics. If not jointly developed by you and your employees, make sure your milestones are feasible and acceptable so you will get buy-in across the organization.
- They focus on people: Ensure you have the right people in the right positions—you may want to choose people based on their mindset as much as for their skills and abilities. Consider rotating people into new positions to give them the opportunity to be challenged and grow.
- They include recognition and rewards: Don’t neglect the ongoing support of your team; this may be in the form of resources, recognition, or guidance. And don’t forget to celebrate successes with something more substantial than an “employee of the month” reward. Consider incentive plans with real value, such as phantom stock plans or equity in the company.
Discipline: A relentless focus on execution
Discipline has two facets: a relentless focus and pursuit of your goals, but also an unwavering attention to the tools, processes, and financial resources that protect your business from threats and challenges.
Every company should have a formal risk-management plan in place that evaluates the economic risks to the company. In addition, along with your Board of Directors, you should evaluate your risk level quarterly. For example, companies that had evaluated the risk of a recession before the pandemic likely adjusted to the downturn better than those that were surprised by a recession as a result of the pandemic.
Achieving business resilience
Remember that the world is still a very uncertain place, so you need to be prepared to succeed whether the wind is at your back—or the wind is in your face. Use the four core elements of culture, leadership, change, and discipline to map your way to business growth and business resilience in 2021.
About the Author
Michael Evans has been with Newport LLC since 2012, where he serves as a board member and Chief Executive Officer, and writes and reports on a variety of business topics for emerging growth companies. See Michael’s articles and full bio at AllBusiness.com and LinkedIn.
This article was originally published on AllBusiness.com.