By Scott Grossman, Chief Financial Officer, Ensono Athletes adapt existing skillsets to the nuances of the challenge at hand. In an era of unrelenting disruption, business leaders must do the same
In August 2022, The Maven Report launched amid the still-churning social and economic upheaval of the most profound global disruption in a generation: the COVID-19 pandemic.
Supply chains were in shambles, remote work was on its wobbly transition from a short-term fix to a permanent state, and the Great Resignation was the story of the moment, with employees upping sticks in droves in search of greater fulfillment on their terms, and employers scrambling to stem the tide and fill the gaps.
Two years later, those challenges haven’t so much disappeared as been pushed to the backburner while a new set of urgent market-impacting disruptions has once again set companies on edge and leaders struggling for the right response. It may have been reasonable to think things couldn’t get any more “unprecedented” back in 2022. It would also have been wrong. Consider just a few of the major disruptors that have entered the economic fray since then:
Though the inflation rate has been steadily declining1 since its June 2022 peak of 9.1%, the increased cost of goods and operations, strained supply chains, constrained individual and corporate budgets and prohibitive borrowing costs are still with us. Even if the cooling continues, the pain already inflicted is going to linger for the foreseeable future.2
Simultaneous wars in Ukraine and the Middle East have dealt the global market multiple blows, with trade and supply chain disruptions causing shortages, increased costs and delays and general market uncertainty.3 Simmering tensions between the U.S. and China have added another tremor into this already shaky mix, with a giant question mark hanging over the future of trade policies, tariffs and the flow of goods and services.
Closely connected to all of this is the looming and historic U.S. presidential contest, which portends a host of potential business impacts. Changes to tax policies, trade agreements, regulatory frameworks or global alliances ushered in by a new administration could affect everything from consumer behavior and spending to strategic decisions and operational practices.
If you’d said “ChatGPT” to someone two years ago, they might have guessed it was a new kind of navigation system. Today, OpenAI’s brainchild and the countless generative AI-fueled applications it has spawned are fully mainstream—with adoption by both individuals and businesses far outpacing our understanding of the potential risks and downsides and how to manage them. And the jury is still out on the ROI of the nearly $1 trillion of capital spent on AI to-date.4
1 inflationdata.com 2Philip Blenkinsop, “Global trade rift widening as Ukraine war passes two-year mark,” reuters.com, February 2024; “Geopolitical conflict and its impact on global markets,” usbank.com, July 2024.
3Kevin L. Kliesen, “Slower GDP Growth and Falling Inflation in U.S. Economic Outlook for 2024,” stlouisfed.org, November 2023. 4Grant Gross, “Where’s the ROI for AI? CIOs are struggling to find it,” CIO.com, May 2024; “Gen AI: Too much spend, too little benefit?” Goldman Sachs Global Macro Research, June 2024.
In business as in life, change is constant. Yet the complexity, interconnectedness, speed, scale and convergence of the changes we’ve experienced over the past few years—coupled with the ever-present and escalating impacts of cyberthreats—make this a uniquely challenging economic moment. The overarching lesson is that things can change, dramatically, in a heartbeat.
In this whiplash-inducing economic climate, there is no more important financial and operational muscle to strengthen than agility. The strategic, operational and funding priorities that made sense under one set of market conditions could be useless, even disastrous, under the next. Your business must be able to understand, adapt and respond to changing economic conditions quickly, confidently and with minimal disruption to people, processes or outcomes.
Agility encompasses all these capabilities. It’s also the dial that turns up the heat on every other one, breeding resilience, enhancing collaboration and fueling innovation.
Athletes are a group well versed in strategically adapting existing strengths and skillsets to changing circumstances. A major league hitter will adjust his stance and swing when facing a left-handed pitcher. A marathoner will focus on different techniques when running on a scorching 90-degree day as opposed to a rainy 40-degree one, or a hilly terrain versus a flat course.
Here are four organizational exercises leaders should give special focus to right now to train, strengthen and build up the specific kind of agility needed to meet and thrive through the unpredictable and evolving economic environment we’re in today and the invisible but inevitable future challenges.
Professional caddies are highly valued and richly rewarded for the meticulous work they do long before the first stroke. They study the course layout, analyzing every hole, hazard and potential pin placement to understand the challenges ahead. They walk the course, observing current conditions and thinking through how changes in wind, precipitation and temperature might affect play. And they minutely inspect the greens, analyzing the slopes, contours, grass grain, surface conditions and more to predict the ball’s path in a range of different possible scenarios.
For businesses, one of the most important standard practices to elevate and prioritize in this market moment is contingency planning. Inasmuch as you cannot always know what’s around the next economic or geopolitical corner, you can know how your organization should respond to it if you’ve thought deeply and in detail about the possibilities. That starts with identifying the greatest areas of financial and operational risk for your business and the potential impacts to finances, operations, clients and employees, prioritizing those risks according to likelihood and severity, developing specific response strategies for each one, and outlining clear actions and responsibilities to manage them.
The spate of present-day disruptions listed previously are a natural and useful starting point for contingency planning. But leaders should encourage each other and their teams to push the envelope of their “what if” thinking here. The prospect of a protracted intra-European ground war may have seemed unlikely to many just a few years ago. Yet some organizations had clearly prepared for the possibility of significant regional instability and were able to respond quickly and decisively when Russia’s invasion of Ukraine threatened their business interests. Others were seemingly caught off guard by the event and suffered significant financial and operational losses as a result. Anticipate and plan for the relevant “ifs” that lie just beyond the current visible risk horizon... then walk your minds a few steps further.
Crucially, communicate your contingency plans to everyone who would be involved in executing them or affected by them. Speed and agility are two sides of the same coin: the latter maneuvers, the former accelerates. Everyone should understand their role and its purpose well in advance, so they’re ready to move fast should plans need to be activated. (See also, “It’s time to bolster your BCDR”.)
There’s a reason why the quarterback gets all the glory in American football. He doesn’t just throw the ball; he orchestrates the entire offense: predicting the opponent’s moves, adjusting strategies on the fly and communicating clearly with teammates to ensure everyone knows their role. His level of agility and foresight are in direct proportion to the team’s ability to navigate the complexities of the game, adapt to changing conditions and capitalize on opportunities to score.
On today’s fast-paced and unpredictable field of business play, where economic conditions often go sideways and business-critical decisions about funding, allocation, investments and liquidity must be made quickly, the finance organization needs to be the quarterback of the organization. This requires a shift from providing siloed support to acting as a proactive strategic partner—offering insights that go beyond numbers to help the business anticipate market shifts and adjusting financial strategies in real time.
In this Finance-as-a-Service (FaaS) model, reporting speed and accuracy are priority number one. This means leveraging advanced technologies and analytics to deliver information that is timely, relevant and accessible. FaaS is also about fostering a collaborative, communicative partnership with each business unit to deeply understand their unique needs, goals and drivers and tailoring reports and guidance accordingly. And just as a quarterback breaks down complex plays into understandable steps, FaaS-focused finance teams go beyond reporting numbers; they educate leaders on how to interpret financial results and understand their real-world implications. Teaching the business to expect, receive and execute on an always-on flow of relevant, highly actionable financial insights is essential to fostering the holistic agility this moment demands. (See also, “Unleashing the power and promise of AI-driven finance.)
When 2023 Chicago Marathon winner Kelvin Kiptum crossed the finish line, people marveled not only at his record-breaking 2:35 time but also at the extraordinary carbon-plated Nike “super shoes” that carried him there. And Speedo’s Fastskin swimwear—which incorporates space tech coating like that used on satellites to create a feeling of weightlessness in the water—was the suit of choice for the 2024 U.S. National swim team at the Paris Olympics. Olympian Ryan Murphy said the first time he swam in the suit, “I felt like Superman.”
The technology surrounding and supporting your business functions in the same way. When fully optimized, IT infrastructure streamlines and accelerates performance and helps you break away from your competitors in a challenging and crowded space. Clean, connected, accurate, accessible and secure data is the hallmark of modern optimized IT, and a critical key to agility in today’s environment of rapid-fire, multi-front disruption. It’s what will enable your business to respond to the onslaught of new information and challenges with speed and confidence. And it will empower you to innovate and grow even in a difficult business climate. Getting to that data state is what your digital transformation efforts should be laser focused on right now.
That mandate is even more urgent given the arrival of generative AI. The benefit your business will derive from AI-based applications, and the extent to which you will avoid their risks and pitfalls, rises and falls relative to the quality of the data you feed into it. (See also, “So you think you’re ready for AI?” The Maven Report, Spring 2024.)
Six-time NBA champion and four-time gold medal Olympian Michael Jordan is quoted as saying, “Talent wins games, but teamwork and intelligence win championships.” It’s also the formula for building the agility necessary to navigate a time of crisis and uncertainty, which calls for an all-brains-on-deck approach.
From reviews to planning to IT transformation, tapping different players and seeking a broad range of perspectives can surface information and ideas that would never have arisen within a smaller, more homogeneous group. A director-level associate who works regularly with a vendor in your supply chain, for example, is going to have more insight into their current or potential vulnerabilities than a SVP several clicks removed. Engaging a diversity of experience and expertise can also provide a bulwark against groupthink, assumptions and individual biases.
At a practical level, this comes down to regular conversations, open communication channels and active feedback loops. The same list of issues guiding your contingency planning should also inform team and 1:1 meeting agendas as a standing point of discussion, with established mechanisms for getting valuable insights onto the radar of decision makers.
The winning strategy for a game with no end in sight
What may have seemed like an economic sprint as we were nearing the end of 2022 has turned out to be an ultramarathon, and the finish line keeps on moving. Maintaining the overall health of your organization is vital at a time like this; there’s no business capability you can afford to devalue or neglect. But by homing in on agility and fine-tuning it to the unique challenges and demands of this moment, you’ll be able to stay resilient and adaptable through what’s happening now, and whatever may come next.
