The clock is ticking to shape the reality of business resilience

It is easy to say that businesses need to be resilient. But what does that actually mean? 

The impact of the pandemic, stuttering consumer confidence, the war in Ukraine, and conflict in the Middle East have been felt by every business in a different way. If there is a pattern across the turnaround and restructuring market in EMEA, it is that there is no clear pattern emerging. What we can see, however, is that the volatility in markets is strengthening.

Geopolitical influences become more relevant with every month that passes, particularly in this part of the world, which has been beset by conflicts and their ongoing human and business consequences for more than two years. The sad fact is that these events – and the rising tension between China and other countries around the world – now seem to be woven into the fabric of the everyday challenges that a business must contend with, rather than preparing for an anticipated event on the horizon or a shorter, sharper, unexpected shock to the system.

If resilience is the capacity to withstand or recover from difficulties, then strengthening this attribute requires any business to be crystal clear about what is at stake for them, their customers, and their market. What are the most important factors that directly impact these areas, and therefore what are the associated risks to mitigate?

There is cash available in the market, but it is about so much more than simply the money. It is about getting your business right, into a position where it can cope with this volatility and the next waves on the horizon – AI being the latest case in point. The pressure points will not stop materializing – and, in many ways, these are beyond any business’ control – but how they absorb the shocks and continue to progress is within their gift.

I am helping companies reconfigure themselves in a way that focuses on their core strengths and capabilities, displaying a turnaround mindset that gives their organization a rapid route away from potential failure driven by improved performance, operations, and financial health. It is only when you focus on this that you are best prepared to confidently handle the challenges ahead – crystal clear visibility on cash, cost, customer needs, optimized margins, and deep supply chain knowledge, for example.

In Germany specifically, “sunsetting” businesses is on the rise, through carve-out activity that can generate liquidity via a sale, or through wind-downs driven by a hard look at production costs or perhaps the uncertainty of political systems. Exiting businesses from the market may have been shied away from in the past, but the combination of economic and broader disruptive forces at play dictate that action must be taken.

Of course, these are not the only answers for management teams, but activity like this speaks to the sense of urgency I see growing across EMEA, because leaders are realizing that you cannot simply let the clock continue to run down in the current financing climate. The realities of resilience will differ for every single business, but it is a common characteristic that no one can do without.