According to the Harvard Business Review article “How to Succeed in an Era of Volatility,” the last 30 years have been “a remarkable period of macrostability, characterized by largely peaceful geopolitics, generally falling interest rates, expanding credit markets, and moderate inflation.” This environment has led us to believe that maintaining low margins, just-in-time processes, ruthless efficiency, and simple business continuity are the secrets to success. Now those beliefs are under pressure.

Welcome to the Era of Volatility.

To survive our new business landscape, leaders must embrace business resilience to weather the coming economic storms. Since it is rare for business schools to teach resilience, few modern leaders are comfortable redesigning their operations and culture to meet the demands of this new and uncertain business landscape.

But, if you want to overcome obstacles in the future, you must start preparing now.

First, What Is Business Resilience?

Business continuity is often confused with business resilience, so let us first clear up the differences.

According to the ISO, business continuity is the “capability of an organization to continue the delivery of products and services within acceptable timeframes at predefined capacity during a disruption.”

According to HBR, business resilience is “a company’s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances.”

In other words, continuity is the ability to bounce back and keep meeting customer expectations, no matter what happens. But as a recent McKinsey article eloquently stated,

“Resilient organizations don’t just bounce back from misfortune or change; they bounce forward.”

Modern business technology is built to help your company thrive amidst uncertainty. Today’s tech helps even small businesses to “bounce forward” by tapping into the power of advanced automation, accessing real-time data with on-demand insight, and evolving with a flexible modular setup that adapts quickly to unexpected events.

7 Tactics to Increase Your Business Resilience

Here are some tactics to help you get started.

1. Create extreme scenarios you can use as war games

Do not waste your time with inconsequential problems; a scenario only matters if it would make you change your ways. Once you’ve come up with extreme potential scenarios, HBR suggests that you should structure your responses to each scenario in 3 ways:

• “No regrets” decisions will align with your mission, values, and overall strategic plan.
• “Options and hedges” should seek to capture emerging opportunities or mitigate risk.
• “Big Bets” will reposition your company for a surprisingly altered future.

Flexible business solutions with robust reporting capabilities will help you make reasonable predictions and forecast into the future. This ability should help you determine which scenarios might be on your horizon.

Remember, however, to revisit your forecasts and predictions often. To paraphrase Zurich University of Applied Sciences professor Franz Röösli from his article on business agility in the age of uncertainty, instead of considering forecasts to be prophesies or predictions of exactly what will happen, consider forecasts to be a dynamic prediction you can use to plan a few steps ahead in the face of ever-changing data.

2. Manage your company like an investment

Once you’ve determined your scenarios and responses, use them as templates to allocate your business resources. Put the bulk of your money into those “no regrets” decisions, but make sure to invest budget and labor into your “options and hedges” so you have the resources to develop speculative opportunities and mitigate disruptive risks.

Make sure you allocate responsibly by remembering that small risks deserve small budgets, and big opportunities deserve big budgets.

One great way to mitigate risk while saving money is to put modern technology to work for you. A cloud-based ERP solution can give you the power to centralize similar duties in a single role, so you can hire one person located anywhere who can tackle specific opportunities or mitigate specific risks across all of your locations at once.

3. Monitor changes and trends

Stay ahead of the curve when you pay close attention to emerging patterns in the greater business landscape. Labor, consumer patterns, and tech or industry disruptions are great places to focus. If you integrate data points from each of these into a dashboard, you’ll be able to quickly spot and act on changes that match your scenarios.

This means that real-time dashboards and reporting are a must have for you to make agile decisions in our unpredictable environment. Make sure you choose a solution that features real-time insight for all stakeholders and that provides flexible, user-friendly reporting, dashboards, and widgets that do not require IT involvement to set up or maintain.

By not waiting around for IT to build you a report, you’ll have the power to predict, adapt, and act faster than your competitors.

4. Leverage automation and other time savers

We all know that automation is critical for business continuity, but it can also help build resilience. Using automated tools to collect data, set critical monitoring alerts, and offload time-consuming manual processes can help you see coming disruptions and set aside the time to handle them.

Make sure you consider other time-savers as well. For example, if you choose a managed cloud ERP like Acumatica, you’ll have the freedom to focus on tackling disruptions while the Acumatica team and your solution partner take care of critical yet irritating IT tasks for you.

Trust us. We’ve had decades of experience in the software industry and we can assure you that, when a crisis is looming, you will not want to allocate resources to researching replacement options for your outdated servers or finding more efficient ways to cool your server closet. If you leave the IT portion to someone else, you’ll be better prepared to overcome all those inevitable challenges in your future.

5. Expand your timelines to the long view

Decades of stability have trained us to focus on the short term, but being resilient requires that you expand those timelines and start implementing redundancy, emergency plans, and fallbacks for the future. This takes more planning and will undoubtedly impact your efficiency and performance in the short term, but keep in mind that it is likely to balance out by insulating you from extreme business shocks in the years ahead. 

Start thinking forward as you’re considering your critical business software investments. While you’re evaluating your various ERP or business management solutions, think further than your company’s needs this year or next. Instead, buy for what you may need in the future – or, if you’re not quite sure what you may need, focus on what the software analysts at IDC consider “leaders” in the industry. To be considered a “leader,” these vendors are required to envision what their clients may need in the next 3-5 years.

View IDC’s leaders for 2024

6. Keep decision making and processes modular

Self-sufficient teams, locations, and operations almost inevitably result in overlap and redundancy. Yes, this can hurt productivity in the short term, but it can help your business overcome disruptions more easily in the long term. When agility is the name of the game, it makes more sense to keep everything modular and nimble – but you must make sure that your data remains fully shared throughout the organization.

Choosing cloud-based business technology that provides a single source of truth anywhere and on any device will give you the best of both worlds. You’ll have more flexibility for small, modular teams, and you’ll also empower every team to use companywide data. This way, you can achieve faster trend spotting, faster decision making, and faster recoveryfrom surprising setbacks.

7. Tap into the power of business collaboration

We all know there is no such thing as a “one size fits all” technology solution, which is why today’s top business software developers are focusing on an alternate approach: they offer a buffet of options easily modified to meet a wide range of various industries or use cases.

When you choose flexibility and configurability instead of a precise, one-off software customization, you can stay more agile and keep up with timely security updates. This also empowers you to try out the latest in software offerings and add new tools and capabilities as soon as you want to.

Although many leaders have a bad taste in their mouths from the costly and cumbersome software add-ons of the past, today’s API integrations and modern add-on libraries provide a lot of value to growing businesses. APIs and marketplaces offer a wide range of point solutions that tailor your ERP to meet nearly unlimited specific business needs.

Acumatica’s open API allows flexibility with access to Marketplace solutions providing benefits that help business leaders implement tailored functionality quickly and affordably, without the customization headaches of yesteryear.

Not Sure How to Get Started? Try This.

We admit. If you sit down right now and begin working on tactic #1, you will run into a roadblock almost instantly: the roadblock of uncertainty.

Simply put, it is hard to make concrete plans when you have no idea what is going to happen.

Here is our advice: The biggest key to success with resilience is that you have to start being comfortable with uncertainty and make plans anyway. As the McKinsey article puts it:

“When challenges emerge, leaders and teams in resilient organizations quickly assess the situation, reorient themselves, double down on what’s working, and walk away from what’s not.”

Also remember that some things will always remain certain, predictable, and stable. A recent HBR article on agility quoted Jeff Bezos, who said:

“I very frequently get the question: ‘What’s going to change in the next 10 years?’… I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time.”

Get Additional Tips for Building Business Resilience

To help you get started, we’ve provided you with free access to this excerpt from the white paper, “IDC Marketscape: Worldwide SaaS & Cloud-Enabled Small Business ERP Applications 2024 Vendor Assessment.” This white paper showcases expert advice and additional tactics to help small businesses navigate our modern, chaotic environment so they can confidently choose business software that meets their needs.

The white paper also includes a detailed breakdown to help you understand the latest software trends and considerations, as well as critical advice for today’s software buyers. This helps you make sure you’re getting what you need to maintain agility and position yourself for business resilience going forward.

Access the White Paper to Learn More

 

Accounting Business Solutions is a respected accounting and business management software solution provider. We provide experienced sales, consulting, implementation, training and support services for small to medium-sized companies located in south central and southeast Texas. Our portfolio of solutions includes cloud based, hosted and on-premise options.

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Sources

How to Succeed in an Era of Volatility. Harvard Business Review, Vol 102, Issue 2, pg. 53–57. (2024). https://hbr.org/2024/03/how-to-succeed-in-an-era-of-volatility

Definition of Business Continuity.  From “ISO 22300:2021(en) Security and resilience — Vocabulary.” International Organization for Standardization (2021). https://www.iso.org/obp/ui/#iso:std:iso:22300:ed-3:v1:en

A Guide to Building a More Resilient Business. Harvard Business Review. (2020) https://hbr.org/2020/07/a-guide-to-building-a-more-resilient-business

Raising the resilience of your organization. McKinsey & Company. (2022). https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/raising-the-resilience-of-your-organization

Beyond Budgeting – Business Agility in the Age of Uncertainty. FP&A Trends. (2021). https://fpa-trends.com/article/beyond-budgeting

How to Avoid the Agility Trap. Harvard Business Review. (2024). https://hbr.org/2024/11/how-to-avoid-the-agility-trap