How to raise resilience and prime your business for growth

The past few years have elevated the importance of resiliency in business from a “nice to have” to a critical skill. Resiliency means being able to maintain business continuity, adapt to the unexpected and emerge from adversity — much like a rubber band that can stretch and flex without breaking.

Coming out of the pandemic, where remote work environments became commonplace, there was a resiliency factor that came into play. The adaptability of that new environment posed a lot of challenges for companies. And while that’s largely behind us, there are still some holdovers from that era.

Businesses must stay agile and adapt to changing customer and employee demands while navigating increased fraud rates, supply chain issues and an uncertain economic outlook. With the right strategies in place, however, companies can build a resilient business model to meet today’s challenges head-on and come out stronger than ever before.

This is where Commerce Bank takes center stage.

As we speak with business leaders, the importance of agility and strategy in processes, people and technology invariably rise to the top of those conversations. The past few years have taught us that the financial sector needs to be thoughtful and creative with various teams. Solving challenges such as labor shortages, digital transformation and automation, as well as economic uncertainty, requires an agile mindset and considering new incentives and solutions.

The Commerce Bank team recommends five strategies business leaders can use to build resilience and position their businesses for growth.

1. Put people first

Today’s rapidly changing business climate requires companies to adapt quickly, which necessitates having the right talent in place to navigate shifts before it’s too late. Research from the consulting firm McKinsey has found that businesses whose teams practice resilient behaviors, such as sharing knowledge, conducting performance reviews and innovating from the bottom up, are less likely than other organizations to go bankrupt.

Companies that wish to be resilient invest in building self-sufficient teams. That means both hiring and training for this skill.

Teams built out correctly with the right talent, can often help navigate change before it’s too late. Change happens more quickly than it ever has in business today, and the speed at which change occurs is probably going to accelerate going forward. Making sure you’re modeling an agile, adaptable mindset and having the right talent that is comfortable in that environment is going to benefit your business long term.

2. Maintain financial strength

With the right people in place, the next thing companies need to be resilient is financial strength. This requires leaders to make prudent financial decisions that ensure resources are available when needed to adapt to and capitalize on new opportunities. Managing cash flow is critical, as is having cash or debt capacity available to invest as needed.

As organic growth slows, mergers and acquisitions become especially appealing for growth-minded leaders. Good, well-run companies with debt capacity are well-positioned to seize these opportunities, compared to companies that may also be well-run but are over-leveraged.

3. Embrace automation

The pandemic accelerated automation trends in many areas of business. In addition to supply chain and labor automation, companies sought ways to automate back-office functions, support a remote workforce and speed up cash flow. Commerce supports these needs with a variety of services, including PreferPay® which allows businesses to give vendors and customers quicker access to their funds.

While many companies have introduced automation in one form or another, there is almost always room for more.

In addition to lending capital for equipment purchases and other aspects of an automation project, banks can help businesses improve efficiency in their finance departments. Missouri-based manufacturing company Hillyard, for example, turned to Commerce Bank early in the pandemic to streamline its accounts payable and accounts receivable processes. The company was experiencing heavy demand for its cleaning and hygiene products and needed an option for customers to make payments online. Not only was Commerce able to solve this issue, but also facilitated a better use of Hillyard’s cash flow by providing optimal interchange rates on merchant transactions, streamlining back office functions and automating loan activity.

4. Mitigate fraud

Fraud can have serious financial repercussions, including lost revenue, higher operating costs and potential legal or regulatory penalties. By implementing an effective fraud prevention strategy, businesses can reduce their risk and improve their overall financial strength. This could include using advanced analytics to monitor for suspicious activities, deploying fraud detection technology to spot red flags, and educating employees on best practices to identify and respond to potentially fraudulent activity.

Taking action to combat fraud helps protect businesses from unforeseen risks and provides them with the resources they need to maintain financial strength in turbulent times. Fraudsters tend to be on the leading edge and working with an institution that not only has the solutions, but also invests in the technology and is working diligently to keep its customers’ sensitive data secure is crucial for businesses of all sizes.

5. Seek advice

Resilient companies develop strong relationships with many of their vendors, treating them more like strategic advisors than service providers. Bankers, accountants, attorneys, key suppliers and consultants can bring important perspectives to business leaders as they prepare their companies to withstand different environments.

The companies that demonstrate the aptitudes of resiliency demand a lot of their vendors. They should ask a lot of questions and want to talk through both short-term and long-term opportunities.

These strong relationships can be invaluable when times get tough. When Commerce builds a relationship with a business, we become more than just their banker. We understand their pain points and provide insights to help bolster their business. Whether you have concerns about increased data security, payments automation or are just seeking advice, the solutions exist to grow your business — Commerce Bank would like to be a part of those discussions.