The Focus of Business Leaders
As business leaders we are required to wear many hats covering strategy, sales, operations, team building etc. but ultimately, the most critical element is how we manage the flow of cash through our business. Failure to manage cash flow is the equivalent of not ensuring the oil level is maintained in your car – i.e, total engine failure and your prized asset is now worthless.
This need to focus on cash has never been truer than over the last 18 months where we have been required to manage through some truly remarkable times. This has called for us to adapt processes, delegate enhanced responsibility to our team members and operate in a remote-first environment. It has also shown how we can be creative to overcome challenges we had never planned for and to appreciate just how essential technology is in our modern world.
From talking with business leaders over the past few months, I have heard how change was managed and the positives that have emerged, including a much better understanding of their business. One area in particular, which would typically not rank highly around the boardroom table, is that of managing company spend including expenses.
Almost every company owner I have spoken with recently has mentioned how under budget their monthly expenses are, and a desire to better manage these going forward. Remember every pound saved is an additional pound available to be invested in your business.
Typically, all companies had processes, policies and systems in place pre-COVID to manage company spend, with authorisation levels clearly defined. However, these were designed to typically operate with an office-based workforce, “ink” signatures and an onsite finance resource to manage the process.
During lockdown the switch to remote working highlighted four key issues which needed to be resolved:
- A large reduction in expense spend, primarily due to behaviour change (switch from face-to-face meetings to video calls; almost total end of corporate travel and entertainment, etc.).
- A temporary overhaul of spend and authorisation processes which were heavily based on in-person approvals.
- Elimination of paper from the process. One CEO I spoke with stated that pre-COVID, she thought of her company as technologically advanced and only once the first lockdown arrived did she realise just how many systems still relied on “bits of paper”.
- Inflexibility of the process, in that the systems in place where never designed to support the level of work practice change we have witnessed over the last 18 months. Who would ever have thought that we would leave our desk in spring 2020 and not return until summer 2021? Some have still not returned!
So, as we now settle into our post-lockdown world in the UK, how can we embed the benefits accrued during lockdown to ensure our companies are as efficient and effective as possible.
For me there are five areas of focus to consider as best practice processes are instilled going forward:
This is the time to review company policies and ensure they are fit for purpose to meet your new working regime. If, as many of us have, you will have team members based from remote locations, then ensure you cover this in all policy documentation. Build in flexibility, consider what has worked well during lockdown and adapt policies and procedures to embed these benefits in your business moving forward.
I believe that we have witnessed business technology move from preferred to essential status within our companies. Over the last five years, as new applications have become available, there has been a desire from the board that these are adopted to secure efficiency and keep us competitive. However, implementation has been delayed due to the “cost of change”. During lockdown we have all come to realise that business models must have the ability to operate in a virtual environment which is enabled through technology.
We have also come to understand that to gain the business benefit technology can deliver, we must choose the best fit for our business and not simply rely on our IT teams to select the latest upgrade to our ERP that may deliver only some of what is required. (Read: You Have an ERP System. Do You Really Need AP Automation?) I don’t know a CEO today who doesn’t appreciate that integrating systems through simple API libraries is the future of business tech.
Once policy has been reviewed and technological solutions identified, it is essential to ensure processes are put in place that ensure the smooth running of the business. These processes must be driven from the end-user perspective and not mandated by the IT department. Secure input from all staff regarding what works best and ensure flexibility, security and remote support is built in from day one.
Technological adoption during lockdown was accelerated for those platforms which delivered an intuitive user experience which works on employees’ preferred devices. I believe the success of the likes of Zoom ahead of many more established competitors was driven by its simplified user interface which “just worked”.
I would add that any applications deployed today most certainly must be “mobile first”, deliver the highest levels of security and allow a certain level of user personalisation.
5. Governance and reporting
With the entire team working from their own homes, we have come to realise that trust is an inbuilt part of our organisations, and the thought of micromanagement most definitely must be removed from our lexicon. However, we do require oversight of our systems. Key data must be delivered in terms of management information, which is both accurate, timely and in a format that can be easily interrogated.
I appreciate that this can sound like a lot of work, but the benefits are many. I believe that the value of any business will be increased as the systems and processes that support the business model are reviewed and optimised.