Business resilience and how to build it

Have you ever wondered how some people manage to keep bouncing back from adverse events? How they just keep on keeping on no matter what gets in their way? My grandmother used to call it grit and determination. Others would describe it as perseverance, tenacity or persistence. Whichever word you choose, we’re essentially talking about the same thing: Resilience. The ability to handle disappointments and setbacks. The ability to face challenges and overcome them.

Businesses are no different from people. Some are able to weather all storms while others are eroded little by little by each one. Resilient businesses use setbacks and disappointments as an opportunity to learn, make changes and do things differently in the future. This kind of adaptability and flexibility has been essential to business survival over the past years as we all deal with COVID.

Besides the ability to manage through major disruptions like global pandemics and floods, business resilience also includes the capacity of a business to adapt and adjust to everyday pressures and setbacks. Luckily, business resilience can be built. If you’re going to work on your business’s resilience, it’s helpful to break it down into these three key areas: financial, systems and processes, and culture.

 

Financial Resilience

It’s fairly predictable that, as an accountant, I’m going to say your financial position is the most important part of business resilience! Think about it this way though; being in a good cash position is like having a buffer. It helps you absorb the knocks and blows, and it gives you the luxury of time. Time to generate alternative ways of reacting, time to ride it out or time to put off a decision until you’re not under pressure or emotional.

The key to successful cash management is to monitor all the elements of the working capital cycle. The faster the cycle turns, the faster your trading activity converts into available cash. Introducing relatively small changes to your financial management practices can result in significant improvements to your cash position and better resilience against downturns in income.

 

Systems Resilience

When systems and processes don’t change over time, they not only become a bottleneck, they also become a chink in your resilience armour. Quite often, in a busy business, systems and processes go unchecked and become ‘the way we’ve always done things’. But in my experience, the businesses that thrive are those that have an appetite for innovation and improvement. It makes sense to start your process improvement strategy with the areas of your business that aren’t working well. Generally speaking, if you have management, team or customer frustration around a particular process area of your business, you have a process problem. And that’s a resilience problem.

Consider how you currently deal with issues like supply chain interruptions or employee absences. What are you dependant on to continue operations? What could you do without in the short term and still deliver your service? Knowing your dependencies will help you determine your risk factors and decide what you can tolerate and what needs to improve.

 

Building a Resilient Culture

In the workplace, an employees’ ability to manage anything from a tough workload to a frustrating colleague will largely depend on how resilient they are. And while it’s true that some people seem to be born with more resilience than others it doesn’t mean that it’s a skill which can’t be learned. Nurturing resilience in your team has so many benefits – not least of all that they’ll be better able to manage stress, a risk factor for anxiety, depression and burn-out.

While some stressors can’t be anticipated (pandemics, floods etc), some common work stressors can. Having access to go-to guides, processes and resources gives people the tools to troubleshoot when unexpected challenges arise. When team members are encouraged to learn, innovate, speak up, seek support and help others you create a culture of empowerment and resilience. If you don’t have a large team, utilise your network for support and as a sounding board for ideas. Resilience ultimately depends upon being able to generate alternative ways of reacting to situations so use as many pairs of fresh eyes as you can.

 

And lastly…

Resilient people and businesses know that stressful situations don’t last forever, and negative feelings will dissipate. Remember, you and your business are not passive recipients of stress or powerless to do anything about it. There is always something we can do to change or improve a situation.

If you’re interested in learning more about business resilience, check out this great read: ‘Resilience at Work: How to Succeed No Matter What Life Throws at You’, Maddi and Khoshaba (2006). Or feel free to contact me for a chat.

 

This article was first published in the Winter 2022 edition of the Women’s Network Magazine.

 

Further help

You can find out more about working with Marsh & Partners here. As your Absolute.Account.Ability partner we’re on a mission to make your business life better. We’ll help you set goals for your business, devise an Action Plan to make them happen and meet with you regularly to ensure you stay on track.

Not sure what needs tweaking in your business? We’d love to hear about what’s keeping you up at night and work out how to help. You can contact us on (07) 3023 4800 or at  mail@marshpartners.com.au.

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