Businesses have been operating within a very uncertain climate ever since the beginning of the Covid-19 pandemic but now their stresses have been compounded by the war in Ukraine.
According to a report in CityAM the majority of investors managing around $1trn in assets are expecting an equity bear market this year and are slashing their exposure in response.
Risk management and building resilience:
Dr Gianluca Pescaroli is a global expert in risk management, and more specifically in how businesses and other organisations can best plan for, and cope with, the impact of a crisis.
He says: “You need to have a very, very clear idea of your critical processes and services. These are essential, independent of whether it is a pandemic, or Ukraine, or climate change. The better you prepare, the better you adapt and react.”
The little things are important:
While pricing and supply issues need to be addressed you should also have a checklist of vulnerabilities for everything needed to keep operations flowing smoothly.
These can be such simple things as whether your top managers still a landline at home as a back-up in case mobile networks fail. In the office, have back-up generators in case of power supply loss and more than one staff member trained in operating them.
Alternative/back-up suppliers are essential especially with so many Russian providers now sanctioned.
Costs: can you Reduce overheads – by System automation, Outsourcing or Innovation?
It may be that you can renegotiate payment agreements with your existing regular suppliers to your mutual benefit. Remember they too will be hurting thanks to all the disruption so having reliable agreements in place may suit them too.
Cash reserves – can you increase them?
To answer this question your board needs to know exactly what the business finance position is at any moment in time. You can easily keep on top of this if you download our free cash management tool here.