5 minute read
Business resilience basics
Resilience is the ability to cope with ever-changing dynamics, and this extends to company culture.
BY ANG LLOYD
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An informative Finance Indaba Conversation on the fundamental elements of business resilience featured panellists James Wilkinson, TFG chief strategy officer, Welela Dawit, CFO at Microsoft South Africa, and Deon Fredericks, group CFO for Famous Brands.
The interactive conversation was enabled in partnership with Sage. Jordaan Burger, Sage vice president of finance for Africa, the Middle East, and Asia-Pacific, led a short presentation on the role of digital transformation in providing solutions that drive resilience. “Businesses in South Africa have faced many challenges in the last 18 months,” he said. “Covid-19 has had a huge impact on different industries, and then there was the civil unrest, but there is a silver lining – and that’s where digital transformation comes in.” For Welela, resilience is the ability to cope with ever-changing dynamics. “Do you have the muscle to anticipate challenges, both internal and external, and pivot as needed? No one could’ve predicted the pandemic; we need to be able to constantly assess and look round the corner,” she said.
Plurality and a growth mindset
According to James, doing good business shouldn’t be an afterthought; it should be based on a shared-value approach to profitability and purpose. “It’s where multi-stakeholder capitalism comes in, the idea that success for us is also success for our customers,” he said. He admitted that these aren’t always easy conversations, and organisations need to understand the context that the business operates in so that everyone can fully benefit. “Doing good business should challenge us, and make us think beyond ourselves, like taking the environment into account,” added James. “It’s about changing the way we think and adding a level of plurality.” Deon added that a realistic approach is needed. “Being sustainable is now a given; businesses have to consider the planet and people’s wellbeing. Profit is no longer everything, and it’s about how you operate ethically,” he said. “Doing good business isn’t a one-size-fits-all approach, it’s holistic. As finance people, we must balance it with acceptable returns and a measurable, sustainable outcome,” he added.
Welela emphasised that a north star is a fundamental starting base, with the alignment between employees and the organisation’s purpose being critical. “Employees need a clear understanding of what the business’s objectives are. If they’re aligned to the values of the business, the purpose, that’s when you’ll get the best out of
“Doing good business should challenge us, and make us think beyond ourselves.” - James Wilkinson, TFG chief strategy officer
Deon Fredericks
employees, even in the most challenging of times,” she said.
She added that a growth mindset is essential, too. “The world is changing; having the ability to be continuously curious and to remain competitive is key.”
Timelines and stewardship
Business resilience has taken many forms during the past 18 months. Welela shared that at Microsoft, instead of doing a yearly budget, the company is now budgeting in six-month intervals. “Intelligent insights can also determine what the next six months will look like. We’re leveraging bots and AI in these processes, and budgeting now requires little manual manipulation so we can be flexible,” she said.
According to James, resilience also covers “product stewardship”, or resilience in the product that is being sold. “Businesses need to look up and down the value chain, and have an extended responsibility beyond the factory gate,” he said. James shared that TFG is getting involved with fabric recycling start-ups in Cape Town, as well as looking at digital clothing resale, which has become huge for Gen Z influencers. “Slowing down fast fashion is a big part of our business resilience – and it’s all part of doing good business,” he said.
The participants agreed that there is still friction for South African businesses, and it remains a challenge to get the fundamentals right. With the likes of Covid-19, load-shedding, and civil unrest, business resilience – and doing good business – will need to go back to basics, and company cultures will have to shift.
“In times like these, you’ll need to focus on interim solutions: get back to basics and stabilise the business, then accelerate,” said Deon. “Company culture that hasn’t changed, despite the world changing, is also a problem – a holistic approach is the answer.” James added, “It’s amazing how we can act with speed and agility when there’s pressure put on us. I won’t say for a second that Covid-19 has been a good thing, but it has changed the way that we work and do business. I think that we won’t go back to the old ways of doing things, ever."
Seen in the chat ....
“Getting the fundamentals right has a lot to do with business-model maturity levels. Corporate culture influences people’s behaviour and buy-in.” – Roy Vareta, EZEETILE “We had to adapt to survive. We did remote auditing for international clients, and now we’re looking into wearable tech, automation and digitisation. We’ve realised that we have to move forward and bring in solutions.” – Tina Maharaj, SABS
Make the tough decisions
Notice the key warning signs that show there’s something wrong and prevent a ‘two minutes to midnight’ situation when dealing with crises.
BY REABETSWE RABAJI
Unicus Tax SA is a tax dispute specialist with a 100 percent success rate, mediating disagreements between taxpayers and the South African Revenue Services (SARS). For most taxpayers, this is a time-consuming and frustrating process with extremely long deadlines.
The biggest issue for taxpayers is that they believe SARS is not listening to them, and as a result, taxpayers inadvertently allow themselves to dance to SARS’s tune, which does not have to be the case, said Nico Theron, the company’s founder, who was speaking at the Finance Indaba Conversations on making difficult decisions and making them work. Jo Mitchell-Marais, restructuring services leader at Deloitte, told participants the audit firm is typically parachuted into crises and this is because these crises are often left too late, in a “two minutes to midnight'' situation. “Managing stakeholders, bringing trust, long-term strategic objectives and calm back into the conversation is what we primarily do at Deloitte,” she said. Jo pointed out that determining the key warning signs in your business that show something is wrong should be the primary focus for businesses during a crisis, and if you allow the situation to get to a point where the lenders dictate the process, it can put you in a tough position. “The biggest issue is that management does not want to be seen as those who were on the lookout when the crisis occurred. In order to manage a crisis,