It wasn’t so long ago that Wall Street giant Lehman Brothers filed for the largest bankruptcy in U.S. history – leaving Capital markets stunned. Lehman had all the traits of a global powerhouse – diversified financial services offering, plenty of capital at its disposal, and not to mention brand equity and prestige.
While the Lehman collapse could be attributed to excessive leverage and mismanagement, fast forward 12 years, and the uncertainty surrounding the global Covid-19 pandemic has almost instantaneously crippled industries, markets, and economies. The effects of these uncertainties have been profound, and have led to unprecedented levels of disturbance and turmoil – while all driven by factors beyond human control.
Break it down
Regardless of the source of disruption, any significant global event is bound to have major impacts on businesses. Given the highly connected present-day world, these crises and their resulting impacts on capital markets put additional burden on business leaders to respond and adapt to the ever-changing dynamics.
Given that such crisis situations facing business owners do not come with a proven playbook, they often demand balancing short term needs with workable recovery plans. The need of the hour is a “planning cockpit” that helps businesses prioritize and execute; to build sustainability; to survive now so we can thrive later. The immediate focus should be on near-term strategies such as those outlined below. None are mutually exclusive, and should be executed in tandem through a concerted effort.
|Near Term Strategies||Analytical Tool-kit||Bookr Insights|
|Focus on restarting disrupted operations.||
|Emphasis on highly liquid customers.||
|Drive operating margins by pricing efficiencies and control on fixed costs.||
|Low priority areas: Know where to spend your calories.||
Getting help in execution
The agility that these situations demand further emphasizes the importance of evaluating trends in data. However, delivering strategic change has always been challenging. While having tools at our disposal is important, relying on a competent analytics team (one who knows and understands your business) is better.
These situations demand teams that are practiced at learning businesses and interpreting data – essential skills to build reliable and relevant analyses from raw data. Furthermore, most mid-market companies fighting on the front lines of this economic crisis don’t have access to these powerful tools and strategic minds – simply because of the high cost to implement and maintain these systems and teams.
However, outsourced functions such as compliance, risk, finance, technology, and supply chain management would significantly reduce risks to businesses. Furthermore, these teams are trained to introduce strategies for revival and recovery – all while keeping costs low and introducing flexibility compared to hiring full-time teams and systems.