It’s probably an understatement to say that the last four months have been the most challenging ever faced by many business leaders. The COVID crisis had made once-hypothetical black swan scenarios very real for companies across the world in a way I have not seen in the 30-plus years I’ve been in business.
I am an optimist, though, and believe that the world will ultimately come out of these hardships stronger. While the challenges that companies are faced with are extraordinary, what’s even more extraordinary is the degree of innovation, the degree of compassion, and the degree of community commitment we’ve seen from companies in this country and around the world. It’s been amazing to see how resilient our economy and business community have proven through the crisis and the leadership that has emerged.
In reflecting on how I see the business community reacting positively to the crisis in the months and years to come, three major themes emerge:
We’ll Have a New Respect for Risk Management
Risk management programs have largely been abstract to everyone except internal auditors, the CFO, and the audit committee. No more: Enterprise risk management is now extremely tangible and it’s very clear that we can have these significant Black Swan events that require a programmatic approach to responding to a disruption or a discontinuity event.
Risk is now going to be a C-suite-wide concern, and every organization will be much more diligent from a risk management perspective going forward. Efforts to understand the risk/reward tradeoff in all business processes will accelerate dramatically.
As the former CFO of a large, publicly-traded company who has thought a lot about risk, I think this is a very good thing. A strong focus on risk will make companies stronger and better prepared for whatever challenge comes next.
Innovation Will Take a Front Seat
People really underestimate the unbelievable innovation and resiliency of the economy and the business community. We can’t begin to anticipate all the amazing things entrepreneurs, managers, and employees will do over the next 18 months as we recover, but I’m confident that the crisis will unlock a flurry of creativity that will spur strong growth in 2021.
For example, this crisis has coincided with huge advancements in cloud computing capabilities, which will enable innovative companies to completely rethink how (and where) they work. Access to real-time enterprise data from anywhere in the world will enable companies to reinvent processes using better information to increase revenue, reduce cost, accelerate cash flow and minimize risk. When times are tough, there is a greater incentive for companies to get smart with how they do business.
We’re entering what’s going to be an absolutely fantastic period for people in the enterprise to reinvent the way they do work.
We’ll Focus on What Matters
Lastly, we’re going to see companies zero in on what really matters to their business. Companies will have fewer priorities, but they’ll execute these priorities faster than what we would have seen going into the crisis.
Building off my previous two themes—risk management and innovation—I expect to see a lot of focus put on leveraging new technologies to increase resiliency and agility. Enterprise contract management technology, for example, enables the CFO office to have visibility into every right and obligation the company carries across its entire contract portfolio. Extracting real-time data from documents as complex as contracts requires powerful cloud-computing capabilities that have only come online in recent years. Before COVID hit, I thought contract management software would become a foundational part of every business over the next seven to 10 years in the same way that ERP or CRM software has.
However, I now expect companies to put intense focus on digitizing their contracts on an enterprise platform much sooner. Three-to-five years from now, every organization will have some type of enterprise contract management.
That’s just one example of the change in speed and the reprioritization we’re going to see as a result of what we’ve all been through the last few months.
We are entering a really fascinating period in the world of business and technology—it’s a great time to be an optimist!
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