What a difference a few months makes. The world has changed immeasurably since
31 December 2019 – when the media began reporting on the emergence of a novel coronavirus, in the hitherto little known city of Wuhan, China.
Fast forward to July 2020 and economies and businesses around the world face a bleak outlook; the worst since the Great Depression of the 1930s. Following the declaration of a global pandemic on 11 March, countries closed their borders and governments enacted sweeping shutdown measures to slow the spread of the virus. As a result, once thriving enterprises of all sizes and stripes have had their business plans turned upside down. Their leaders have been forced to make difficult decisions to stand down staff, slash expenditure and divest themselves of non-core assets.
As the economy progressively re-opens, businesses which have managed to stay afloat through the crisis face the challenge of planning and re-engineering their operations in response to much altered economic conditions.
Mixing it up at the top table
Much depends on the vision and ability of those at the leadership table. Directing and reshaping an enterprise during times of significant political and economic uncertainty is no job for the faint hearted and Australian companies will be looking to ensure they have their ‘A teams’ on the job.
But what attributes should those teams possess? A recent global survey of institutional investors by Censuswide on behalf of BlackLine found that businesses should strive for diversity when assembling their management teams.
While accountants and lawyers are typically over-represented in the leadership cohort, there’s a good case for making space for individuals from other backgrounds, given 64 per cent of respondents stated diverse educational history contributed to a successful management team.
Harnessing the talents of individuals of all genders was seen to be desirable by 60 per cent of respondents, while almost half wanted to see leaders selected from a variety of social backgrounds.
Diverse businesses do better, in good times and bad
They’re admirable sentiments which are grounded in sound business thinking. Many researchers believe embracing diversity is good for productivity, competitiveness and the bottom line.
Writing in the Harvard Business Review in 2019, researchers Stephen Turban, Dan Wu and Letian Zhang noted three benefits a genuine commitment to fostering a culture of diversity could deliver to companies. They are: being perceived as a more attractive working environment; the development and exchange of more innovative ideas; and the perception by investors that the organisation is being competently run.
“Sociological research on market valuation suggests that investors value when firms use commonly-accepted “best practices,” such as the inclusion of diverse groups in hiring, and they penalise those that break these norms”, the trio wrote.
Technology to support the leadership team
Top teams who can lead their enterprises through the coronavirus crisis and its aftermath will demonstrate their worth to Australian businesses in 2020 and beyond. The job of those individuals – making and executing on strategic decisions to ensure viability and growth – can be made easier by having access to granular, up-to-the-minute financial data. The adoption of continuous accounting methodologies provides business leaders with an accurate snapshot of position and performance in the here and now – insight which will prove invaluable during volatile and uncertain times.