Resilience can build a strong business innings - Chris Stott

Jonny Bairstow leapt in the air after scoring his century against New Zealand in the Cricket World Cup. The Yorkshireman’s celebration and his dogged performance at the crease epitomised England’s courage and resilience.

England's Jonny Bairstow in action during the ICC Cricket World Cup group stage match at Riverside Durham, Chester-le-Street. PRESS ASSOCIATION Photo. Picture date: Wednesday July 3, 2019. See PA story CRICKET England. Photo credit should read: Nigel French/PA Wire. RESTRICTIONS: Editorial use only. No commercial use. Still image use only

The team’s ability to transform itself on and off the pitch and respond to new challenges has been a highlight of Eoin Morgan’s captaincy so far. Crucially, it has taken England to a World Cup semi-final for the first time since 1992.

For businesses to be successful, they also need to think in a similar way and be able to transform themselves too. Our fifth annual Global CEO Outlook found that two-thirds of chief executives believe that agility is the new currency of business.

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And if they fail to be agile, their business will become irrelevant. This is the sobering reality of operating in the current climate – environmental, social, economic, geopolitical and technological disruption is here to stay. This reminds us that adapting to opportunities isn’t just for start-ups. It is incumbent on all businesses, whatever their size or nature, to disrupt themselves, their competitors, and markets if they are to survive and prosper.

The days of battening down the hatches to ‘tough it out’ are over.

So, how do you develop that resilience to help future proof your business? To answer that question, you have to look at a few elements.

As ever, it all starts with the fundamentals – the business plan. You need to be able to articulate a robust strategy that you believe will still be successful in three or even five years’ time. Of course, this will need to demonstrate some defensible point of differentiation that will be difficult for others to match.

Crucially in this age of rapid change, the plan also needs some optionality, or ‘wiggle room’. That means mapping out some alternative strategies in case the business needs to respond differently to any significant shifts in the trading environment.

Business leaders need to think through plan Bs and plan Cs and not wage the future of their company on the success of just one strategy.

Culture is the second element that can help shape a more resilient business. This is about fostering a culture that is open to challenge to see that change is embraced, not feared, avoided or resented. As such, management teams should look to surround themselves with challenging voices that can keep you on your toes and make sure that you sense check everything you do.

An important part of that mindset shift is found at a personal level. We all need time away from the echo chamber at work. You only have to think back at those times that you’ve come up with a great idea or solution to a problem when you’ve been walking the dog, exercising or relaxing with a book. Space to think will give you the chance to find the dark corners of your business. This all leads to more agile thinking and, ultimately, a more agile business.

With my deal advisory hat on, the importance of resilience and agility can also be felt in transactions. We’ve seen that it pays to be ‘deal ready’ even if the timing is not quite right for you, it may be right for your strategic acquirer, so best be ready when that call comes. We have also seen an increase in minority equity investments. Locally, this can be seen in the likes of Three Hills Capital Partners’ investment in Castleford-based Sigma Retail Solutions and the Business Growth Fund in brioche experts Carrs Foods.

Essentially, business owners are de-risking a little, taking some cash out after making it through some tricky times. These ‘soft leverage transactions’ are then used to find an investment partner to bolster their finances and shore up the balance sheet.

The cash headroom, extra support and counsel and spread of equity is all about building in some resilience and helping the business create some capacity to become nimbler.

With that mindset to be proactive in change, businesses can improve their agility and, in turn, become more resilient to whatever the future brings.