Contributed by Madhavan Sivashankar, chief executive officer and founder, Gulf International Finance Limited. Sivashankar has been a member of EO UAE since October 2020.
“Life’s not about how hard of a hit you can give. It’s about how many you can take, and still keep moving forward.” ― Sylvester Stallone, Rocky Balboa
When my business plans took a significant turn in March 2020, owing to lockdowns implemented to prevent the spread of Covid 19, my initial feeling was remorse. Time, they say, heals and for entrepreneurs like us, it make us think and then act!
When I looked up the word “resilience,” I found that I had the definition wrong. Its meaning is the capacity to recover quickly from difficulties. I always felt that it meant insulating oneself from problems. A fallacy.
I own and run a regulated financial services firm based in the UAE’s Dubai International Financial Centre, a high-cost jurisdiction even by global standards. Every day without revenue is a strain. I often regard financial services as the infantry of an army. We get the glory in good times but face the brunt in volatile times. Covid has been no different.
The lessons we have learned include:
1. Don’t be shy to retreat.
2. Reduce recovery time when the environment starts getting better.
3. Focus on new and innovative methods to work digitally.
For the first time in my ‘capitalistic’ upbringing, where progress always meant moving forward, I did the opposite, I retreated.
• Significantly converted employee fixed compensation to variable
• Met debtors and requested leniency
• Maintained tight reserves akin to our forefathers preparing for long cold winters.
Whilst this was going on, though, I was constantly reminded by what one of our guru’s Mr. Buffet said, “Be greedy when others are fearful” and the entrepreneur in me started thinking, why have corporate profits been remarkably resilient in recent decades?
While GDP in the developed world has grown a robust 3.6 percent annually since 1990 (in nominal terms), corporate net income over the same period has grown almost twice as fast, or 7 percent per year. Companies in developed markets have churned out profits at a historic pace, despite massive economic dislocations like the bursting of the dot-com bubble in 2000 and the global financial crisis eight years later.
Terrorism, immigration crises, Brexit, chronic geopolitical instability―none of it has managed to derail what has been a golden age of corporate profitability. Then it dawned on me that this too will pass.
Doing Agile Right is a must-read that illustrates how companies are adapting in extraordinary ways to survive and succeed. But spur-of-the-moment agility is fragile.
The book lays out a road map for leading transformation to a truly agile enterprise. The key is balance, allowing leaders to simultaneously run their business and change gears at the same time. You don’t always need to speed; sometimes you need to slow down.
We invested in online technologies and continue to do so, to improve communication and its periodicity. We realised that by thinking “agile” we were able to introduce it to almost every aspect of our business—whether it’s client communication, document control, data storage, more focused sales or better productivity from employees.
Every organization must optimize and tightly control certain operations. At the same time, every organization must innovate. Agility, done well, frees and facilitates vigorous innovation without sacrificing the efficiency and reliability essential to traditional operations.
Transform to Digital
My message to fellow entrepreneurs is that going digital is sector, size and business agnostic. Simple processes can be changed to make your organization more efficient. For example:
1. We have tasked ourselves to be 90 percent paper free by 30 June 2021. Hence, all our data will be in a secure digital data room, all agreements digitally prepared etc.
2. We encourage all meetings to be conducted digitally. It increases convenience, reduces virus risk, is more efficient and is cost effective. In fact, Microsoft has a starter pack in our region which includes email communication, storage, application access and video calling—all in one, so overheads can be reduced noticeably.
3. Assign process champions: ordinary employees who pick out an existing process in the workplace and come up with suggestions on how it can be recast in a more efficient manner. We have already received great feedback and work is underway. This approach also improves employee motivation and loyalty in our experience.
4. Reward recommendations which migrate manual work to any form of AI, machine learning, virtual reality, IoT and predictive and prescriptive analytics—and most important, the impact of these on client and employee journeys, new services planning and fulfilment, business processes and people skills and culture.
Covid 19 has taught me to retreat and relook at our business model and practices. However, once fully re-engineered, I feel confident that our organization will be far more resilient.
Madhavan Sivashankar is the CEO and founder of Gulf International Finance Limited, a regulated firm based in the Dubai International Finance Centre.