In the current economic situation, which is challenging for most companies, we will be devoting ourselves intensively to the question of what makes medium-sized companies resilient at our Event & Dialogue on 19 April 2023. In cooperation with the employee consultancy stg, THE MAK`ED TEAM invites managing directors, executives and HR managers to a joint evening above the rooftops of Nuremberg, which will be dedicated to professional exchange and dialogue. The focus will be on many practical topics related to resilience management. THE MAK`ED TEAM will give an overview of organisational resilience: How can a company develop the right balance between stability and flexibility? We will show management approaches and discuss resilience strategies suitable for SMEs. stg will again look at individual resilience: What can the company do to strengthen the resilience of its employees? The Event & Dialogue “Robust, adaptable, strong: Resilience Management in Practice” offers an intensive professional exchange. The agenda includes:
The medium-sized companies sector is in permanent crisis mode. That is why the question is more urgent than ever for many medium-sized companies: How can we set up our organisation in such a way that it is immune to external disturbances and emerges from crises unscathed? How can the company grow and develop even in an unstable environment? This requires resilience.
Resilience as an elementary building block of corporate strategy
Resilience in organisations is a complex field and plays a role in all areas of a company. What characterises a resilient company? On the one hand, it is stable and resilient enough to endure and survive crises. On the other hand, it is flexible enough to react quickly to changes and adapt accordingly. If necessary, it carries out the necessary transformation processes to overcome the crisis or shock – without giving up its identity. A resilient company is able to recognise both risks and opportunities in latent and abrupt crises and dangers and, in the best case, emerge strengthened from the crisis. And of course, a company’s resilience also enables it to take advantage of opportunities in a targeted manner in “normal times”.
What does an individual resilience profile look like?
First of all, there is no one-size-fits-all resilience profile for SMEs. There are many different scientific approaches to developing a resilience profile. “Resilience” is also the subject of industry standards, such as ISO 22316.2017, which defines key components for identifying, implementing and monitoring resilience in an organisation and provides guidelines for improving resilience in companies. But everything is also always a question of time, personnel and costs. It depends on many individual factors of the company what it needs to become more resilient. Resilient companies are not only about warding off the crisis and holding their own in dynamic times. It is above all about adaptability and innovative strength. This requires future-proof processes and secure, transparent structures at various levels in the company. Basically, successful resilience management is characterised by a mix of stability and flexibility that is adapted to the company. While stability plays a prominent role in larger companies, smaller companies show their strengths in the crisis primarily through flat hierarchies, a high degree of agility, quick reactions and a high degree of adaptability and changeability.
Ensure stability in the company:
- A reliable network of partners and suppliers and well-lived relationships make a company more robust.
- A strong corporate management that acts confidently and effectively has a positive effect on the entire ecosystem and brings the necessary prerequisites to successfully lead the company through crises.
- Transparency in all areas of the company is a basic prerequisite so that the company can see where it stands at all times and can react in time in the event of discrepancies, deviations or disruptions. Be it in liquidity, in the supply chains or in HR.
- Focusing on the economic success of the company ensures earnings and liquidity. Both are essential elements of a resilient company, as they enable alternative courses of action.
- A focused strategic orientation of the organisation and its business models.
- In order to be able to correctly assess and know where one’s own company stands on the resilience scale, it requires a clear unfiltered reflection of its own strengths and weaknesses. It should be able to reflect on its ecosystem in order to identify potential opportunities and crises.
- A positive corporate culture that communicates guiding principles and corporate goals in a comprehensible way creates trust, team spirit, commitment and engagement.
- With sufficient financial and material resources, lean periods can be bridged.
- Structures and processes should be adapted to bring calm to the organisation.
- Professional compliance management with internal standards and the establishment of an internal control mechanism prevents unlawful behaviour in the company and ensures compliance with rules and regulations. This protects a company from avoidable risks and damage to its image.
Ensure flexibility in the company:
- The digital transformation of the working world and the digitalisation of production and supply chains ensure speed, efficiency and transparency – important elements of resilient companies. Digitalisation promotes resilience at various levels, as the Corona crisis has also shown. Automated and future-proof processes, for example in HR or liquidity management, make developments transparent, processes faster, more efficient and more flexible and provide a daily overview. This enables companies to identify negative developments at an early stage and react to them in time.
- Diversification makes a company more resilient. If it is more broadly positioned, does not only focus on one core business and has “several irons in the fire”, this can be a great advantage in disruptive developments. Here, a forward-looking corporate strategy helps to keep the focus on the company’s goals despite diversification.
- Human resources development can specifically aim to promote important characteristics such as independence or agility. Decentralisation of decision-making processes and powers can also make a company more resilient. This is where forward-looking HR management helps, using important analytical tools such as personnel plans, age structure analyses or personnel development concepts.
- Knowledge management ensures that knowledge and competences are promoted, deepened and networked.
- The cognitive resources of employees are valuable for a company and strengthen its resilience. Knowledge and competences can be mobilised in times of crisis in order to quickly develop creative and innovative solutions that lead the company through the crisis.
- Agility in the company is important to remain nimble. If new rules of the game arise, an agile company can adapt quickly, for example, to quickly develop new business models. Agile companies are characterised by error-friendliness, transformation efforts and a fundamental openness to new things. They are in a position to force changes in their own markets and to manage them successfully, to optimise them and to continuously develop management areas.
Setting up resilience management professionally with experts
THE MAK`ED TEAM accompanies medium-sized companies with an experienced, interdisciplinary team in the implementation of a customised resilience management concept. Which stabilising and flexible elements are focused on depends entirely on the individual starting conditions of the company. Whether liquidity management, compliance system or human resources development: we have the technical expertise to develop a customised resilience solution for small and medium-sized enterprises. Successfully implemented, resilience management not only provides the company with the basis for remaining resilient and mastering crises, but also the best prerequisites for carrying out its transformation processes in a targeted manner.
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“What happens to my customers when energy becomes more expensive?”. How will the high material costs affect my prices or my procurement market? These and other pressing questions are currently being asked by many SMEs. Questions raised by economic crises and changes in many influencing factors. Questions that should be answered at an early stage. Only then does the company have the best possible chance of averting potential risks and crises. This requires transparency in the relevant areas of the company, which can be created by an early warning system.
Many people first think of environmental protection, climate protection and decarbonisation when they hear the word “sustainability”. But sustainability is much more than that. The wide range is reflected in the ESG criteria. ESG stands for “Environment”, “Social” and “Governance”. It is not only about the “E”, but also about the “S” and “G”. It is only through the interaction of the three areas of environment, social affairs and corporate governance that a sustainable corporate orientation unfolds, which improves growth opportunities and financing advantages and makes the company more resilient. The individual weighting of the three areas differs depending on the sector and size of the company. For example, the area of “environment” can have a much higher relevance for an industrial company than for a service provider.
“Financial communication” – many SMEs see it primarily as a task of listed companies. But it is of great importance, especially for small and medium-sized enterprises. Especially when a company is in a difficult economic situation. Companies that proactively implement transparent bank communication and thus build up a good relationship with their bank (creditor relationship) have a much better standing with their bank. Targeted financial communication with regular reporting improves capital access and conditions. It strengthens the bank’s confidence in its own company and can pave the way for better support overall.
The press releases are piling up: small and medium-sized companies are increasingly experiencing economic difficulties – many have concrete closure plans and are implementing them. The offers for sale are increasing. Energy shock, brittle supply chains, shortage of skilled workers and inflation are the reasons. Price increases are not only hitting their own profit and loss statements, they are also causing customers to hold back and lower sales. An analysis by the information service provider CRIF sees an increased risk of insolvency for around 300,000 companies in Germany. That is around 10% of the companies in Germany. The industries that are particularly energy-intensive have already shown significant increases in insolvency cases. This situation calls for attention and caution.
The planning of a company succession, the sale of the company or the departure of a shareholder: The company valuation can become relevant for very different reasons. Basically, the company value is an important criterion when a company is up for succession. The company value provides important guidance at all stages of the succession process: If an entrepreneur knows the company value at an early stage and if it turns out to be lower than desired, he may have sufficient time until the time of the planned sale to take suitable measures to increase the value. If the entrepreneur is weighing up various succession options, the company valuation is an important factor in the decision-making process. For example, in order to clarify whether the sum would be sufficient as retirement provision. Or to ensure fair distribution within the family succession. Or to discuss what tax effects an internal family succession would have. When it comes to a concrete sale, the company valuation is a critical decision-making basis for the negotiation talks.
The whistleblower directive is coming. But very few companies have taken care of it yet. This is shown by a recent PWC study. And it also confirms our impression in practice. But time is pressing: if the law is finally passed by parliament, all companies with 50 or more employees will be obliged to install a corresponding system. And the number of employees here is based on the European concept of employees – and this differs from the usual way of counting. Employees include everyone employed by the company without exception, including interns, mini-jobbers, and the management itself. This is important for determining whether thresholds are reached or not.
In many medium-sized family businesses, a succession is due in the foreseeable future. In most cases, the company is to remain in family ownership. But not all daughters and sons are talented entrepreneurs. Or simply no one wants to do it. Then an external manager can be appointed.
When an external manager takes over the management of a family business, there are many challenges – for both sides. At the same time, the cooperation also holds many opportunities: External managers can professionalize the company with their experience and bring fresh momentum into the business. For the collaboration to succeed, a systematic approach is advisable – starting with the onboarding phase. Read more
The corporate world is changing dynamically and with it the challenges for leadership and management. Managers are constantly confronted with new tasks as a result of the permanent changes. In order to successfully cope with change, focused further development is essential. Structured development of executives is best achieved using an individually designed development model. It ensures that leaders are best equipped for current and future business tasks and challenges.
Systematic development of executives in medium-sized companies is currently the exception rather than the rule. Leadership development therefore offers many companies a great, previously untapped opportunity to strengthen their team, find new talent and successfully move the company forward even in phases of major change.
Supervisors play a Key Role in Employee Retention
The structured development of managers is an important basis for the company’s future – and for staff retention. According to a recent Personio study*, 46% of employees in small and medium-sized companies across Europe are planning to change jobs in the near future. One of the most important reasons cited for this is a lack of appreciation. Leadership style, social skills, empathy and corporate culture are key factors in determining how much employees identify with the company and feel comfortable there. This means that supervisors play a particularly important role in the onboarding process.
Success is no coincidence
Reflecting on oneself, deepening one’s own competencies, learning, networking, motivating … In times of such rapid and major changes, a modern manager is characterized above all by the willingness and ability to develop further. This applies to younger managers as well as to experienced ones. The concrete design of the personal development model depends on many individual factors such as the management level, the area of responsibility or the personal experience values. A younger manager who wants to prepare optimally for taking on greater management responsibility will set completely different priorities in his development model than an experienced manager who wants to drive major change processes in the company. The earlier a development model for leadership and management is implemented at all levels, the more promising the results. After all, developing leaders systematically takes time and is an ongoing process.
Leadership Development with Structure, Empathy and 360° View
How can a manager be developed in a goal-oriented manner? When implementing the development model, it is important to look at the individual framework conditions, corporate culture and goals and link them to the internal guidelines for managers. For this purpose, we develop an agile development model. First, the initial situation is analysed and relevant competencies as well as strengths and weaknesses of the executives are identified. On this basis, development areas and goals are defined, and an individual leadership development model is elaborated. The development model is tailored to the individual starting situation of the executive in order to ensure optimal learning and successful transfer to practice. It will initially be launched as a pilot project and, after the test phase, will be successively implemented as a professional infrastructure in the form of coaching, training, and learning-on-the-job elements. Managers can thus achieve their individual development goals in a targeted and efficient manner. The training effects are permanently evaluated and assessed to ensure the best possible development results.
THE MAK`ED TEAM sees leadership development as an essential part of successful business development. We develop agile leadership development models that are easy to implement and focused. Executives benefit from our high level of expertise in corporate business and our interdisciplinary, experienced team.
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*Source: Personio study “The Great Value Shift”, 2022