Companies around the world are making significant operational changes to become more resilient after many found their contingency plans weren’t robust enough to cope with the COVID-19 pandemic.
HSBC Commercial Banking’s new Navigator report, Building Back Better, draws from a survey of over 2,600 companies in 14 countries and territories. It shows that many firms neglected contingency planning in key operational areas such as technology, finance and sustainability prior to the crisis, with nearly half (47 percent) saying they could have done more to prepare for the challenges of recent months.
For some, the shift to remote working exposed weaknesses in their continuity preparations, with fewer than three in five (57 percent) saying they prioritised investment in technology to improve operational efficiency over the last two years.
The availability of cash flow was also a challenge, with only 43 percent having prioritised steps to strengthen their financial position. The crisis has forced many businesses to adapt, with almost two thirds (63 percent) having made changes to their operations already. Almost half (44 percent) will change their products and services further, either by diversifying (33 percent) or by reducing their offering to become more specialised (17 percent).
Over the longer term, business plans now call for more agile staffing and office arrangements together with a greater focus on technology and sustainability. Key findings include diminishing real estate occupation; a more flexible working arrangement; technology adoption and re-negineering businesses to be more sustainable. Barry O’Byrne, CEO of HSBC Global Commercial Banking, said: “Businesses aren’t waiting to be told how to ‘build back better,’ they’re starting now.
The human tragedy and huge economic damage caused by COVID-19 have accelerated transformation plans and have brought relationship inter-dependencies to the forefront of leaders’ thinking. Since history shows that businesses are more likely to fail coming out of a downturn than when they’re in one, it’s vital that leaders push ahead with efforts to make their enterprises more agile and more resilient.”
The HSBC report points to the importance of collaboration between businesses during the crisis, which has been key to survival for many. It noted that over the last six months, almost all (93 percent) firms have supported the businesses they work with, with larger businesses in particular supporting smaller partners. Almost six in ten (58 percent) have shared information (25 percent), expertise (24 percent) or premises (13 percent) and around a quarter (26 percent) have offered advice and 40 percent have collaborated with other businesses to get their products and services to customers.
However, while collaboration has helped sustain operations during the crisis, businesses see a number of challenges ahead as they seek to build resilience over the next six months. Weaknesses in financial and workforce structures were the top barriers to change identified by two thirds of businesses (both by 62 percent), with just under a third (31 percent) struggling to maintain sufficient cash flow. Additionally, a third of businesses (33 percent) see employee morale as a barrier to building resilience over the near term.
