In the Gita, Krishna tries to play the role of facilitator for Arjuna to make him adapt to internal as well external environment. Can we apply something from that in today’s business?
Dr Palakh Jain and Dr Nilanjan Chattopadhyay | August 17, 2023
This article aim to look at how CFOs are tackling new challenges in the digital era.
Over the last few years, many companies have been disrupted not by their other competitor but by technology advancement such as payment digitisation etc. Your business can get disrupted by things which are beyond your imagination, for example, Covid-19. The question is: If this is what is happening across the globe, how do we go ahead in building resilient businesses and ensure growth? The resilience by itself doesn’t mean anything but it should be read in the context of achieving something, i.e., growth.
To understand how we can build businesses which are resilient and grow in the process, we need to make an attempt to understand: “What does it take to make a business resilient?” One definition of resilience is the speed with which the organiations adapt to changing external scenarios. Adaptive and visionary leadership becomes crucial in the process. This ensures continuous growth.
Further, resilience can also be seen as how well anticipated you are in advance. If you do then you can respond well. It’s also about the survival of the fittest! A lot of disruption has happened in the business world – an open mindset and growth mindset becomes important in this context. Managing resources properly during adversity to bring the best out of the organisation in long run becomes important. Two ingredients which make business resilient can be people and technology.
The food for thought is: Could there be internal factors also that may inhibit us from becoming resilient? Or are there just external factors? In the Bhagvad Gita, Krishna tries to play the role of facilitator for Arjuna to make him adapt to internal as well external environment. Can we apply something from that in today’s business?
The current level of resilience is what a company needs to asses and see what potential factors can lead to a downfall. The company needs to know the parameters for the same. There are many organisations which slipped into oblivion as they were not able to sustain the Covid period. However, many sprung into action and did better in this period. The stock market stands testimony to this trend. The difference between these two performing companies can be the portfolio of products.
However, reality is more than that. If there is a conglomerate in diversified industries, if such a company before the pandemic anticipated their sustenance, they started investing in IT part of business and not infrastructure part of business. The IT element completely overturned the business process. How did they do it? They assessed all building blocks – first demarcate what are your contributing pillars to business growth. Next step, what could be the tenure for doing this? This cannot be done by scientific exercise but on historical trends etc. Third, once this is done, one must think of the entire cost base ahead of everyone in the curve. Also, assess along with building blocks the revenue that will come along – then measure cost benefit analysis and see what should be taken ahead and what should not be. The business has to stay ahead of the curve!
The leadership defines how the short-term profitability and long-term resilience should be balanced. One is the clearly defined vision and goals in terms of where you want to be. It is important to clearly lay the purpose of the business. Next is the financial plan in terms of where you want to go. A very important subset of the purpose is how you prioritise your resources. One may want to carve out some investment in area of technology, talent management etc. While prioritising resources, discipline and rigour is required in terms of how you operate in the present scenario.
Lastly, companies need to be aligned with their broader stakeholders – investors, financiers, partners, society, etc. to manage disruption. The communication channel within these stakeholders has to be very transparent and the management must take them along in the journey. It requires strategic mindset to stay focussed to creating long-term growth while maintaining short-term profitability to manage disruption.
Dr Palakh Jain is Associate Professor, Bennett University and Senior Fellow, Pahle India Foundation. Dr Nilanjan Chattopadhyay is Professor, Bennett University.
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