A multifaceted scenario planning tool
Businesses often fail to address risks that were long known but never tackled. Operating plans and budgets are usually set for the next year, but the risks associated with the pandemic might impact organisations for the next three to five. To build resilience, you need to consider potential future scenarios and what actions should be taken today to safeguard the business’ future.
The pandemic has fundamentally changed organisational relationships. Customers’ concerns about COVID-19 have changed their lives and their behaviour. Regulators are demanding changes to the way organisations do business. Investors need reassurance that organisations are managing their cashflows and long-term plans. Competitors are responding unexpectedly, using new technologies in different ways.
For longer-term business resilience, the CGMA Horizon Scanner recommends building out scenarios, with a time dimension that is integrated across eight groups:
Suppliers — How will you re-start your supply chain and ensure supply chain resilience in a global trading environment that will continue to be disrupted? Regulators — Are you alert to government-led initiatives to kick-start the economy? How will cash flow and cash resilience affect your organisation when banking facilities are strained?
Customers — How will changing societal norms and a traffic light approach to reviving economies impact customer interaction with your organisation? Competitors — How are competitors adapting and re-purposing their businesses into new operating models? Processes — How will you reorientate your business in a socially distanced operating environment? Technology — How can technology provide secure new ways of working and help you find efficiencies that you wouldn’t have considered before COVID-19?
Stakeholders — How are you being judged for your pandemic response? Are you being evaluated for the way you treat your employees, suppliers and customers? Environment — How does operating in a global, interconnected environment change when in some countries there is the risk of a return to nationalism?
Once medium- to long-term scenarios are debated and agreed upon, they can be examined for their effects on business resilience. They can be built into your organisation’s strategies and business models to help navigate from lockdown to a resilient, post-COVID-19 organisation.
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