A new survey study finds that building resilience into a company’s DNA is crucial to better cope with crises such as the Covid-19 pandemic.
A report of the HSBC Navigator entitled “Resilience: Building back better” surveyed over 2,600 businesses across 14 countries, markets and territories around the world between April 28 and May 12, on actions taken to surpass the crisis and seize emerging opportunities in the new normal.
The report, released last month, found that “companies that build resilience into their DNA will better weather crises.”
Many firms were found to lack proper planning in key areas such as technology, finance and sustainability prior to the crisis, with nearly half saying they could have done more to prepare for the challenges posed by the pandemic.
But companies are adapting fast and making significant changes to how they operate after many found their contingency plans to be inadequate.
These changes include modifying their operations (63 percent), changing their products and services (44 percent), diversifying (33 percent), and becoming more specialized (17 percent).
“Businesses aren’t waiting to be told how to build back better, they’re starting now,” Barry O’Byrne, chief executive of global commercial banking at HSBC, said.
“Since history shows that some businesses will fail coming out of a downturn, it’s vital that leaders push ahead with efforts to make their enterprises more agile and more resilient.”
By necessity, many companies are quickly adopting new ways of working such as quicker decision making, fewer bureaucratic structures, and empowering employees.
Resilient businesses, the report added, look for new solutions for aspects of business affected by the pandemic. About 38 percent of the companies said they are looking at new solutions to changes in production and office locations, while 37 percent are seeking new ways to access finance.
They are also in search of better strategies to access key trading markets, deliver or ship products, increase availability of materials and labor supply, and respond to changes in customer demand.
The paper further noted that businesses that show resilience and agility share some key characteristics. Aside from adapting fast to external events, they also value their customers, treat their employees well, have a strong balance sheet and steady cash flow, and act sustainably.
Data showed that more than four in five businesses had grown closer to their employees, suppliers, and customers, preferring collaboration over self-sufficiency.
“Businesses feel closer to their customers, employees and suppliers-a remarkable finding given the restrictions in place,” the paper said.
“This may also accelerate the trend of B2B businesses selling directly to consumers, as witnessed by consumer brands offering direct delivery to homes during this crisis.”
Other report findings highlight adoption of technology to improve agility, productivity, and help prepare employees for the future.
It also found that to strengthen their financial position, companies are reducing their cost base and debt level to ensure sufficient cash flow and financial reserves.
The pandemic is also making sustainability increasingly integral for 85 percent of businesses surveyed.
Those businesses which prioritized environmental sustainability felt better prepared for this crisis, more resilient, and more prepared for intensifying environmental risks and for creating long-term growth opportunities.
“Resilience is top of mind. It could influence future growth given the uncertain external environment. And it is increasingly a measure of value among investors as they shun fragile business models,” the research said. – Press release
April 30, 2024
