adminincreasingly plan for contingencies in the future instead of focusing primarily on short-term goals.
Some time ago, many business managers had a deep-rooted belief that their organisations’ long-term goals could wait until they had dealt with the current crisis. Alas, they cannot afford to do that in the current environment. The rate at which change used to happen a long time ago is no longer the same with now. It is almost like everything has been put on fast track.
Look at the way we are conducting business now — the phone can now be used to make your financial transactions. The internet has changed the way we used to do business.
A lot more brick and mortar businesses have moved to the internet.
Many businesses are now jumping on to this digital platform which has grown beyond most people’s imagination. A network comprised of billions of minds taking actions every day is now affecting business in an instant.
The traditional way of operating was that we would watch industries change and grow gradually, with some form of predictability. Now there is so much of “microwave growth”. The speed is influencing the way business, Government, politics, and the economy operate at a much faster rate.
What is amazing, however, is the way in which businesses must get used to this anomaly.
The current volatile economic environment reminds me of an extreme version of the Stockholm syndrome .
This was coined after a Swedish bank robbery in 1973 in which the victims in the robbery identified with and defended their captors after only five days of being held hostage.
Volatility is not good for business as it is for the human brain.
Business owners and investors have been known to adopt a wait-and-see attitude when faced with challenges like elections and market inconsistency. They avoid making important changes in the hope of receiving more consistent information down the road.
Over time, however, businesses become accustomed to bad news and adjust to “Stockholm Syndrome Incorporated”. Faced with such an environment, businesses may need to take a relook at their business plans which took into account some suppositions and conditions. This is the time when revenue figures and cost estimations may be revised. This may also be the time to visit project plans.
If these plans extend a period of over six months, try evaluating whether some goals can still be met.
A lot of times contracts with third parties must be dropped or evaluated to find out if they can still achieve the same results as before.
Sometimes the company will need to consider the scenario of the hire or purchase decision. In most industries it is possible to outsource non-core activities. If cash flows are under pressure, the inherent flexibility of outsourcing may be more appropriate until the financial situation improve.
It is also wiser to manage your creditors, it is of no use placing all your customers on 30 days account that will result you being stuck with a working capital deficit during the month.
Avoid a drastic cost-cutting exercise. If you trim your wage bill by half and send off some people, be sure to know that you have every role covered by the remaining workers.
You could now be faced with the option of overtime which is still an unwanted cost.
Quote: Without the element of uncertainty, the bringing off of even the greatest business triumph would be dull, routine, and eminently unsatisfying. (J. Paul Getty)
May God richly bless you.
Shelter Chieza is an advisor in management issues. She can be contacted at [email protected]
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