Gaining an understanding of the ‘real world’ concerns of UK business leaders helps inform our own business strategies. It provides important insights into how we manage and mitigate risk and how we prepare for the future.
In late 2019, we surveyed our members to better understand business leaders’ priorities for 2020 and beyond. Over 250 Vistage members took part, rating five key topic areas according to priority; Talent Management; Customer Engagement; Business Operations; Finance and Leadership. Each topic was segmented into five sub-topics, which were also given a rating.
This article is the second in a series of five that will consider each topic, offering guidance on how best to tackle their associated challenges.
Our survey respondents cited financial management as their highest business priority with 24% of the vote. This category includes budgeting, forecasting, metrics and reporting.
Budgeting for the year, or years, ahead is always daunting. Trying to feed-in the potential impacts from Brexit, and other global political upheavals add yet another level of challenge that many businesses simply aren’t equipped for. Clearly, we are operating in a period of unprecedented uncertainty but while we await news of trade deals and other political and economic developments, here are some tips to consider when putting your budget and forecast together for 2020.
Capital and cash management was the second-highest business priority in our finance survey with 23% of the vote. As mentioned above, 2020 is likely to be a challenging year for business leaders and it’s critical that your cash flow management tactics and strategies meet your business needs.
Take an objective look at your processes. Are there any that can be adapted to mitigate the impact of Brexit or any other risks your business is exposed to. Are there any opportunities to tighten payment processes and expenses? Make sure all your payment terms are well documented and that they protect you against any anticipated impact from the EU exit.
Perhaps most importantly, keep talking to your suppliers and customers. Make sure you know what their plans are and vice versa. Understanding how your trading relationship might change with them well in advance puts you in a far better position to adjust your own agenda and keep an eye on business growth and losses.
Voted the third highest business priority economic and future trends are an understandable concern to business leaders. Alongside the aforementioned challenges, business leaders should consider how prepared they are for advancements in AI and process automation and whether their systems for combatting cybercrime are fit for purpose. Whether or not you manage this internally or use expert support, it’s a good idea to have a central point of contact to deal with this within the business. From contingency planning to engaging suppliers and ensuring compliance, there’s a great deal to manage here and the threats are, sadly, ever-evolving.
Ownership and governance are enduring business concerns, as is reflected in our member survey with this category receiving 18% of the vote. Make sure your business has a good grasp of its responsibilities, including to shareholders, and that you are prepared for any potential liabilities.
Corporate governance arrangements and strategies should be determined by the business leader and the board of directors where appropriate and percolated down through all departments. Finance managers should be able to demonstrate accountability and transparency at all times and keep abreast of any changes in regulatory requirements.
Mergers and acquisitions was considered the lowest priority for Vistage members with 15% of the vote, perhaps reflecting the general air of uncertainty. For some businesses, however, this could be a time to consider M&A opportunities as a means of navigating potential barriers to growth. In fact, according to the EY Global Capital Confidence Barometer, 52% of respondents are planning to actively pursue M&A in the next 12 months. Businesses seeking solutions to supply chain, or other operational activity, that could be impacted by Brexit might also look to M&A solutions to help achieve their goals.
For those leading on finance, 2020 is likely to present a variety of unexpected and unprecedented challenges. Political and trading developments will be at the fore, as will advancements in payment systems, AI, cryptocurrencies and cybersecurity. It will be the businesses that are truly prepared, that are honest about their challenges and who seek the right support to help tackle them, that will succeed. As with our members and community, we will be keeping a close eye on national and global developments - and adapting our approach accordingly.
To download our report ‘Business Priorities for 2020’ click here. If you would like to speak to someone about how best to manage your own business’ priorities, contact Vistage today.
Images via AdobeStock and Pixabay