Dr Alessandro Merendino, from Coventry University’s Centre for Business in Society (CBiS), specialises in research into how leaders’ actions can directly affect the performance of a business. We asked him how businesses can survive crises like the COVID-19 pandemic and Brexit.
The COVID-19 pandemic has brought challenges that for many businesses are unprecedented. However, when combined with the uncertainty of Brexit, the impact seen across different sectors and regions has been much greater than would have been expected by either crisis in isolation.
While it’s normal for a business to face such challenges – such as the departure of a chief executive, an unfriendly takeover, industry decline or new competition – we would not typically expect a multiple of them to come along at the same time and have the global repercussions, experienced over the past year.
The reality is that many businesses will not notice the seeds of a crisis because of a common focus on short-term objectives and performance, such as immediate profit, quickly executed projects, or return on investment (ROI).
Alessandro believes that it is therefore necessary for a wider view to be taken to ensure there is enough resilience in a business to weather whatever storm comes along, and to emerge from it in better shape for the future.
How do you make your business resilient?
There is no one-size-fits all guide to achieving business resilience, however Alessandro has identified five key principles to follow which can help organisations become more prepared for a crisis:
Maximise the use of digital and big data. Championing digital strategies and use of data at board level is critical. It’s more than just having a website and social media presence, it’s about engaging with customers online to keep them entertained and curious, and using data to understand human behaviour, whether that’s customers or competitors; this can revolutionise a business.
Diversify your business. Diversity is not just about demographics. The way you think needs to be more diverse, and on a board of Directors you need a person who can problem-solve, a person who is analytical, another who is a networker, etc. This diversity of thoughts among a team can change the mindset of a company and ensure it constantly revisits and rethinks its strategies.
Adaptability. True adaptability for a business means evolving through trial and error, and reinventing processes to be sustainable. Structures in resilient businesses are designed for flexibility and learning from mistakes, rather than stability and minimal change. Since the start of the pandemic, we have seen manufacturers adapt to produce PPE, which is a great example of thinking outside of the box to thrive in a new environment.
Invest in research and development (R&D). R&D should be considered as an investment rather than as a cost. It has been proven in many reports that investing in your workforce correlates with economic growth, resilience, productivity, and better business health.
Form a crisis management committee. Perceiving the seeds of a crisis is essential to surviving it. Alessandro has found that the companies that were successful in responding to a crisis were those who had previously invested in recognition and resolution expertise, and those who constantly monitor the internal and external environment. Be prepared: do not wait for a crisis to arrive before deciding how to navigate it.