My mantra throughout the pandemic has been that flexible, agile and resilient organisations are the ones that will survive and flourish. As we gradually start emerging from the health crisis, it is clear that these traits will be as essential in the future as they have been to date.
Finance departments that have done the work to ensure they have a finger on the pulse of what is happening on the ground so that they can react quickly and decisively to changing circumstances are set up to succeed in the post-pandemic world. Because, unfortunately, the volatility we have recently experienced that made year-long planning cycles obsolete (see my column in the March 2021 issue of Accountancy SA), is not going to magically melt away as we emerge from the health crisis. We are unlikely to return to the relatively predictable, stable and certainly slower-moving business environment of the last few decades.
On top of COVID-19’s long tail impact, which includes the fallout from global vaccine inequality and the inconsistent opening of borders, several other macro forces at work will drive constant change in the future. Fragile supply chains, already disrupted by the pandemic, are set to be an ongoing, and increasing, challenge. We’ve had first-hand experience of just how shaky global and national supply chains are when civil unrest in KwaZulu-Natal closed our busiest port (and the second-largest container port in Africa) and interrupted the network of travel and transport logistics that support it. This and the unrest led to food, medicine and fuel shortages locally and further afield: the Port of Durban also serves Botswana, Zambia and Zimbabwe to our north.
Now also consider the potential the climate crisis and cybercrime have to disrupt the supply chains that, in a globalised economy, we rely on in our personal and business lives. Look at the pandemic-related delays in smart devices, including vehicles fitted with smart technology, thanks to our global dependence on semi-conductors produced in Asia. Or the shortage of fuel on the east coast of the US following the ransomware attack on the Colonial Pipeline.
While you can’t control, or even predict, these interconnected threats to essential supply chains, you can expect them. And this should convince you that any efforts to support a faster, more responsive information flow into speedier and more frequent budget and forecast cycles should be more than just a short-term band-aid effort for the health crisis and must become embedded into your organisation’s fabric.
Not just a band-aid
Embedding agility and flexibility into your organisation for the long-term starts with looping in the people who are living these changes every day. This is how you will find out about the shortage of a critical component or raw material, or about the reduced quality or the hiked price of what is available. So, as with the health crisis, your best line of defence is to take a dual approach: access to the latest information from the coalface of your organisation and develop the ability to shift rapidly in response. These are critical adjustments in how you work, and how you empower your people, that can have long-reaching benefits.
As published Accountancy SA - December 2021