Preparing for uncertainty and becoming a resilient organisation

Slower growth is anticipated in the world’s two largest economies – US and EU, with China expected to pick up in 2023. Weak growth forecasts stem from expected tighter monetary policy and possible escalation of the war.

Global supply chain disruptions, as well as the Ukraine-Russia conflict have contributed to the rise in inflation across the globe. Food and energy prices have been rising faster in the past year, with a key risk in emerging markets.

The global economic slowdown, together with elevated domestic interest rates and structural challenges, are expected to dampen South Africa’s real GDP growth outlook. The poor performance in Q4 2022 stems from ongoing power cuts and logistics bottlenecks to name a few.

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While surveyed CFOs in SA feel that financial prospects and key metrics are set to improve over the coming months, uncertainty is high and CFOs don’t see this as the time to take on more risk. To navigate the uncertain environment and low economic growth outlook, cost optimisation, better cash flow management and digitalisation are top strategic priorities over the next 12 months.

Much of this kind of planning can be understood in terms of how resilient an organisation is. What steps can a company take to safeguard from these pitfalls and safeguard against risk and exposure.

An organisation that’s not able to offer immediate, real-time answers on impacts to their balance sheets, income statements and cash flow will run into trouble.

Resilient organisations thrive before, during and after adversity and have a mindset of what if? And what next? Not just the next risk, but the next opportunity.

Traditionally, resilience was synonymous with the ability to “bounce back” or recover from any given adversity. Recent times have shown that resilience needs to be reimagined. It should be approached as a mindset, a way of life; seeking not only to recover but rather to thrive in the face of adversity. Traditional resilience positions the organisation to recover from risks and resume its former shape, reimagined however, resilience positions organisations to respond to opportunities for growth that disruption always presents. It endeavours to thrive, not only despite business conditions, but because of them. It is ultimately seen as a strategic priority by the leadership team. Within its scope are all areas of the business and not only its operational aspects and become embedded in the way organisations do business.

Embracing organisational resilience as a mindset requires that the common myths surrounding resilience be dispelled. For example:

• Resilience is mainly a supply chain issue. Reality: Resilience is essential in all key organisational functions.
• Resilience is synonymous with risk mitigation. Reality: Resilience is as much about enabling upside as protecting against downside risks.
• Resilience is mainly an operational consideration. Reality: Resilience is strategic.
• Resilience is a cost to the business. Reality: Resilience is a driver of value.
• Crises are too infrequent and unique to warrant investment in resilience. Reality: Companies need resilience to navigate an increasingly volatile world.

A smart way of viewing resilience is also by seeing it through the business cycle. A Good way to remember this is through the 4 “R’s”: Ready, Respond, Recover & Regenerate.

It is a fact: the more resources you rely upon, the more risk you are exposed to. However, you need people, facilities, systems, data and business parties in order to do business. The reliability and continuity of these operations are critical to your business survival and to building competitive advantage.

One can achieve this by implementing resilience by design. Here the organisation has the right foundations and ‘engineering’ to anticipate, withstand and respond to acute shocks and stresses. This includes having plans in place and the ‘resourcefulness’ to respond to events. Resilience through change means resilience by design is enhanced, not compromised, through change. The organisation is able to deliver consistently under changing circumstances, adapting the business model to take advantage of the ‘new normal’. Seeking not only to respond positively to change – seeking to influence it, take risks and learn from experience. Lastly, resilience in adversity means the organisation is crisis ready, able to mobilise quickly and flexibly to manage and resolve high impact events and issues. This includes having robust command, control and communication capabilities in place, together with an ability to deploy resources quickly and effectively.

The learning opportunities for corporate boards and treasury management are abundant and all are pointing to a strong need to automate treasury.

CFOs without real-time visibility into cash and automated real-time payment capabilities built into their treasury and payments platforms are deer in headlights, unable to catch up to those with on-demand visibility and actionability.

CFOs need a liquidity platform that supports their real-time data strategy. Speak to Digiata to find out how we partner with organisations to put the platform in place, and ultimately be truly resilient.

It is a fact: the more resources you rely upon, the more risk you are exposed to. However, you need people, facilities, systems, data and business parties in order to do business. The reliability and continuity of these operations are critical to your business survival and to building competitive advantage.

One can achieve this by implementing resilience by design. Here the organisation has the right foundations and ‘engineering’ to anticipate, withstand and respond to acute shocks and stresses. This includes having plans in place and the ‘resourcefulness’ to respond to events. Resilience through change means resilience by design is enhanced, not compromised, through change. The organisation is able to deliver consistently under changing circumstances, adapting the business model to take advantage of the ‘new normal’. Seeking not only to respond positively to change – seeking to influence it, take risks and learn from experience. Lastly, resilience in adversity means the organisation is crisis ready, able to mobilise quickly and flexibly to manage and resolve high impact events and issues. This includes having robust command, control and communication capabilities in place, together with an ability to deploy resources quickly and effectively.

The learning opportunities for corporate boards and treasury management are abundant and all are pointing to a strong need to automate treasury.

CFOs without real-time visibility into cash and automated real-time payment capabilities built into their treasury and payments platforms are deer in headlights, unable to catch up to those with on-demand visibility and actionability.

CFOs need a liquidity platform that supports their real-time data strategy. Speak to Digiata to find out how we partner with organisations to put the platform in place, and ultimately be truly resilient.