By Ruchi Sharma, above, Vice President, UK Commercial, American Express
Business leaders can’t control external factors outside of their business; what they can control is their preparedness in the event of the unexpected. However, according to research from productivity champions Be the Business, only about half (53%) of UK business leaders believed they are prepared for unforeseen events. Perhaps a surprising statistic given that success is rarely a linear trajectory for entrepreneurs – and navigating unexpected external circumstances which can impact day-to-day operations and cashflow make it even more challenging.
And the benefits of getting preparedness right and greater resilience go beyond the business itself. According to analysis by Be the Business, if every small business created an annual 1% productivity improvement over a five-year period, this would inject £94 billion annually into the UK economy, creating a more stable external environment overall.
The silver lining is that business leaders aren’t alone; their peers across the UK are facing similar challenges, and there is a variety of existing resources and support to help them build business resilience in a way that is right for them.
American Express recently partnered with productivity champions Be the Business to produce a guide for small business leaders to help build organisational resilience, spotlighting critical areas of business finance, such as cashflow forecasting and scenario planning.
The research highlighted in the guide found that only about a quarter (27%) of UK business leaders planned to increase investment in assessing, mitigating and responding to risk; for those yet to act, being prepared isn’t as daunting as you may think. Every business has the potential to increase its productivity and organisational resilience through simple improvements, planning ahead, and establishing a strong support network.
Dedicating time to prepare
Businesses exist because of, and are influenced by, their wider societal and economic context – they are created when a demand arises or when entrepreneurs spot an opportunity. A common challenge for these leaders is finding themselves spending a lot of time working in the business, but not necessarily on the business. However, by dedicating time to counter this, their business will become stronger overall. For example, supply chains are prone to risk and any disruption can potentially negatively impact the business – meaning having clear visibility of your suppliers, where and how they operate can help business leaders approach issues more strategically.
Another productive exercise is to create a crisis response framework, which outlines clear and agreed actions and processes in the event of a crisis, to ensure that the business manages the situation effectively. By planning in advance, business leaders can seek input and feedback from managers, team leaders, and other colleagues who may have different views or alternative approaches.
The power of support networks
Leading a business, while rewarding, can be all-consuming and often leaves senior execs with little time to seek support when they need it. By building a network, business leaders can access fresh perspectives or new ideas which they may not otherwise have considered. The research found those businesses that have a trusted network of peers are more resilient to challenges, and therefore more likely to find the solution they need. In fact, the research revealed, a third (33%) of those businesses who received advice, reported increasing revenues, compared with about a quarter (26%) who didn’t.
Of course, risk is inherent in running a business and comes in various forms, but how business leaders reflect and respond is what will ultimately give set them up for sustainable success.
The guide is part of Be the Business’ and American Express’ joint ambition to provide support for the UK’s small business community, helping them to improve their productivity and become more resilient to disruption and change. Download guide here.
