Hanadi Khalife, Senior Director of Operations for IMA (Institute of Management Accountants) MEA & India talks about the key components needed for small businesses to thrive.
While it is expected that all businesses stand to face challenges during their life cycles, the COVID-19 pandemic took challenges to another level, arguably coming in as the most serious disruption to not only businesses but economies across the globe. In the race for survival, the adage, necessity is the mother of invention, proved to be true, yet again. Human impact aside, it is a fact that the pandemic was a catalyst for reinvention and innovation. Companies and individuals doubled down and took recourse to their inherent uniqueness and creativity to cope with uncertainties and the unknown emerging from this extended crisis. As small businesses dealt with the realities of the pandemic and the economic conditions it brought about, other less vulnerable companies took identifiable steps to remain viable and subsequently, ended up thriving.
Who would have thought that a pandemic of this magnitude would act as a mega reset button for the entire planet? One that has on so many levels transformed the manner in which organizations embrace the future and plan for it, forever. There are important lessons to be learned here, especially for small businesses, start-ups, and entrepreneurs. Although there is no standard “formula” for reinvention, there are three very clear pivots to enable company transformation in times of crisis and they all start with resilience.
Visionary leadership, business focus, and a people-centric culture have emerged as key attributes of organizational resilience and as important differentiators that segregated small businesses that thrived from the ones that did not. Keeping this perspective, visionary leaders need to guide their organizations in cultivating a people-centric, inclusive, and creative culture, enabling their companies to achieve goals and profitability, even during economic disruption. These leaders are determined not to be derailed, even during times of disruption. They understand all too well the importance of technology, streamlining processes, and improving productivity.
There is simultaneously an equal opportunity for finance and accounting professionals to reinvent and serve as strategic leaders during a crisis. This is where management accounting can play a significant role. During the pandemic, many companies had to reevaluate their market positions, offerings, and products, to determine the best steps forward. While this external shock exposed areas for improvement, it came bearing the gift of new opportunities for growth. Where available, management accountants assisted in these evaluations, thus living up to their ability to drive value to their organizations by helping small business owners gain a clear picture of how their business is doing as a whole.
Business focus is the second critical component to enhancing organizational resilience. Resilient companies that moved forward during the pandemic had existing agile and forward-looking agendas. As companies reacted to the crisis, the smart ones also prioritized the assessment of their current financial position to minimize missteps. Smart CEOs and CFOs were those who reevaluated the financial viability of their plans, choosing not to expand but rather address existing problems. As part of this, they also reevaluated key performance indicators (KPIs). The pandemic has afforded senior finance professionals, especially management accountants, the time to reevaluate reporting metrics. This includes considering key environmental factors and the analysis of market trends.
Another important driver of resilience and success in companies (not limited to large corporations alone) is reevaluating customer connections to improve trust and credibility. This can be achieved by increasing the number of customer interactions, proactively seeking customer feedback, and leveraging emerging insights to improve services. The pandemic allowed many companies to reconnect to their customer base through multiple channels of communication, while developing deliberate marketing efforts and investing in enhancing their overall customer experiences. A key learning from the pandemic is that resilient businesses foster a people-centric culture by providing a supportive environment for employees to improve learning and creativity and advance ideation. While we are more accustomed to large businesses investing in this, it can be an equally important differentiator for small businesses to focus on – and give them a competitive advantage over their peers.
Thus, the three elements of resiliency – business focus, visionary leadership, and people-centric culture – are key components needed for small businesses to thrive. In a volatile economic ecosystem, buffeted in no small part by high inflation, the threat of war, new outbreaks, and geopolitical tensions, resilience is the need of the hour and will remain so. Small businesses, along with their larger peers, must recalibrate the prospects of returning to a “normal” life, if there is even such a thing. This is where management accountants along with other members of the senior leadership team can play key roles in fronting efforts to pivot, stay the course, and move their organizations forward on the path of resilience.
