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Effective financial planning will secure businesses a certain future

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Effective financial planning will secure businesses a certain future 1

By Simon Bittlestone, CEO of financial analytics company Metapraxis

2020 has been an unpredictable year, bringing further volatility to already uncertain markets and exacerbating difficulties that businesses were already facing. Many businesses are feeling the strain on their cashflow and are hastily trying to organise their finances effectively to ensure survival and the ability to deal with any future challenges. Yet, with more uncertainty still to come, it’s key that business leaders know how to deal effectively with the challenges that lie ahead in order to remain profitable.

Recognising the challenges

Accurate financial planning, and particularly the management of cashflow, is essential to futureproofing and planning. The logical place to start when defining a longer-term plan is by setting realistic targets that align with the overall business strategy. In order to ensure targets are achievable, which is critical, historical and market performance data should be used to build a model of the current business.

Building a model that allows the board to see the performance trends across products and services in the context of the market performance allows businesses to determine their starting point for the year ahead and set realistic expectations. It also gives a better understanding of the nuances of the business, including how changes in things such as supplier and customer payments affect cash flow and how products and services vary across different regions, giving the business an understanding of how to optimise their assets.

The next challenge involves putting a plan in place that delivers on the business objectives. This means that businesses need to reconcile the goals being set from the top and the plan of action being implemented from the bottom. However, a lack of collaboration often means that a business’ strategy has to go through several iterations before it matches management’s goals. Communication and clarity on desired outcomes are essential, especially in larger businesses that stretch across multiple departments and sometimes have a global reach.

In addition to communication challenges, it is also important that the planning process is not a drain on time and resources, which can often be the case when using the wrong tools. Excel, while a worthy tool, is not sophisticated enough for the type of analysis and information needed to inform complex decisions. Businesses must take advantage of the technology at their disposal, running ‘what if’ top-down scenarios to understand the impacts and outcomes of various factors.

Securing your future

The colossal impact of the Covid-19 crisis, alongside political and socio-economic factors, and the speed of today’s digitally enabled world, makes markets uncertain and difficult to predict. But CFOs don’t have to resign themselves to being unable to plan for them. By adapting an agile approach to financial planning, they can help to safeguard business performance.

It’s no longer sensible to run a one-off annual planning process; the ability to successfully achieve goals in today’s

Simon Bittlestone

Simon Bittlestone

landscape increasingly depends on the ability to identify future uncertainties, risks and changes, and react to them. Doing so means implementing a rolling budget and flexible plan.

Fortunately, financial analytics technology can make this a reality. It allows all the key drivers of business performance to be mapped out over time, so that the finance teams can see how each of these drivers were affected by internal or external past events. In turn, this allows the board to analyse how various future scenarios might pan out and the impact these may have on the business. Management can then use this information to make better strategic decisions.

Having this technology in place also consolidates data from across the business, making it easily accessible and improving communication between management and financial accounting ensuring all areas of the business are streamlined. Should there be any changes in leadership, trends and insights can be easily accessed, limiting the impact on performance. Keeping these models updated is vital to ensure the company can act on the most relevant information.

Taking it one step further

There are other practical steps management teams can follow to help safeguard the business. Optimisation strategies, for example, whereby businesses determine how best to split their capital across different strategies, projects, products or services across various regions, are a key area of focus especially right now.

Choosing to back the most profitable service lines in a time of financial uncertainty is clearly beneficial, however it is not always easy to get right. This comes back to businesses needing to utilise financial analytics technology to assess all factors and situations and determine the best options in the long-term for the business.

CFOs and leadership teams should always keep the cash flow at the heart of any decision. Having full transparency means they can increase the emphasis on products and services with more positive cash flows, making the business more profitable and able to deal with fluctuations.

The purpose of financial planning is to set out the business goals for the year ahead in order to work towards achieving the overall strategic objectives. This used to be a very insular process – there was no need for management to take anything other than its own internal factors into account – and planning according to the business’ own financial year was very much the ‘norm’.

Now, with the landscape more uncertain than ever before, the ability to adapt to fluctuations is hugely important when it comes to successful financial planning. Scenario modelling and financial analytics allow for rolling plans and CFOs to be more agile in their approach. This, along with more prudent base planning assumptions, will allow the board to prepare the business to weather most storms.

Business

Is Digital Transformation the Key to Business Survival in the New World?

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Is Digital Transformation the Key to Business Survival in the New World? 2

After a turbulent year, enterprises are returning to the prospect of a new world following an unprecedented pandemic.

Around the country the way we interact with customers, how consumers buy, and what interests the public has rapidly changed. Successfully managing these digital transformations may be the difference between your success and failure at this stage of continuing economic uncertainty.

Of course, the investment may appear unviable, but the benefits maintain growth and profitability. Digital transformations change the way you conduct your business. It allows you to take a step back and reconsider every aspect of your business. This includes the technology you use, how your staff operate, and how customers interact with your brand.

The World Economic Forum has predicted that the value added by digital transformations across all industries could be greater than $100 billion by 2025. Digital transformations are allowing organisations to rapidly innovate.

Accepting this innovative approach to your business right now may spell the difference between company liquidation and prosperity. Here, we look at the benefits of digital transformation and why it’s essential for your business.

Transform your customer experience

The main objective for a business is to fulfil the needs of their customer. A positive experience is vital to retain customers and encourage new consumers to interact with your brand. Likewise, positive customer experience is a core principle of digital proficiency.

A recent study found that 92 per cent of the top 100 organisations have a mature digital transformation strategy in place to improve their customers’ experience. This is compared to all other organisations where only 22 per cent of responding companies have these strategies in place.

One way to achieve this is to recreate your e-commerce platforms to better represent the needs of your customers. A complete rejuvenation can help to identify problems and obstacles in your current system.

SMEs have the opportunity to base their digital transformations on the successes of other businesses. In terms of customer satisfaction, 70 per cent of the leaders reported a significant and transformational value in overall customer satisfaction.

Data-based insights

Digital transformation can help you to better understand your market. By tracking metrics and analysing the data that you collect, you will be able to better understand your customers. You can also gain a clearer understanding of how the sector operates under varying circumstances. This helps companies to make better business decisions.

One survey on the use of data in business showed that 49 per cent of businesses believe that analytics are of most use in driving business decisions. Two-thirds of businesses surveyed believe that data plays a pivotal role in driving strategies.

There’s a plethora of ways that businesses can collect essential data. These include surveys, transactional data tracking, social media monitoring, and in-store traffic monitoring.

Greater collaboration across departments

By centring your organisation around digital infrastructure you can create a consistent working experience. Sharing data and information with your staff can promote idea sharing and innovation.

Organisations are beginning to create companies based on a digital culture. This shapes the way that staff communicate with each other and how technology influences the way they work. This culture reinforces their other digital strategies.

It’s important to maintain engagement with staff during a digital transformation. One report indicates that 79 per cent of companies that focus on culture sustain strong performance throughout their transformation.

When organisations are built around a common goal, business transitions will be smoother.

Improved agility and innovation

Digital transformations allow your business to stay agile, in that it is always prepared to and welcomes change.

The most successful organisations do not follow the beaten track. They look to see how their company can diverge from their original mission and build on their successes. Technology allows these new approaches to be developed alongside extending business enterprises.

One survey shows that 68 per cent of businesses believe that agility is within their top three most important initiatives. This means ensuring that every interaction between customer, technology, and staff is meaningful.

These agile interactions can include, for example, the development and improvements of chat-bots. It all works towards helping locate the best possible options for staff and customers.

Frequent technological innovations  make it difficult to predict what business will look like in the future. Organisations can prepare themselves for this through digital transformations, allowing any future developments and changes to integrate into their business operation.

Being recognised as a digitally transformed business, customers and staff will recognise your attempts to innovate and provide the best possible service. The ability to create additional revenue also highlights the need to adapt to the digital age. The future is showing its face through technology. Businesses must take advantage of the transformed society to change how they operate and reap the rewards.

Sources

https://www.weforum.org/press/2016/01/100-trillion-by-2025-the-digital-dividend-for-society-and-business/

https://www.forbes.com/sites/sap/2017/07/13/why-digital-leaders-focus-on-customer-experience/#4b97fa896228

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Deloitte-Analytics/dttl-analytics-analytics-advantage-report-061913.pdf

https://www.futureseriesfuse.com/insights/digital-transformation

http://go.nuodb.com/2016-database-report.html

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Virtual communications: How to handle difficult workplace conversations online

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Virtual communications: How to handle difficult workplace conversations online 3

Have potentially difficult conversation at work, like discussing a pay rise, explaining deadline delays or going through performance reviews are hard to do successfully under the very best of circumstances. Now many of us are faced with the additional challenges that remote working presents meaning you need to have these kinds of conversations virtually. A little preparation and advance thought about the direction of the discussion can really help to make the interaction feel more natural and improve your changes of a successful outcome.

Tony Hughes, CEO at Huthwaite International leading global provider of sales, negotiation and communication skills development, shares advice on how to handle difficult workplace conversations online.

Plan your communication airtime

Planning for a call can be an unpopular task, but taking a few minutes to think through the structure and purpose of your conversation can really help you to achieve your objectives – assuming you know what they are! Work out your primary, and also secondary objective as a fall back, so you will not have to rely on pressing for just one outcome if that becomes too difficult to resolve in one conversation.

Think about how you will show empathy

It can be difficult to observe someone’s body language over a virtual camera call so tone of voice is more easily interpreted. Listen carefully for clues to how the conversation is going from their tone and note that nerves tend to make the voice higher and this can be very noticeable – a warm drink may help to relax your vocal cords and deepen your voice. Smiling when you speak (if appropriate) will also help to relax you and the other person. If you need to get it all right first time, practice makes perfect. Practicing with a friend of colleague can help to produce the relaxed tone of voice necessary to sound sympathetic or authentic.

Active listening is essential

Listening is what separates skilled communicators from unskilled and using active listening is key to ensuring the conversation goes well. We demonstrate active listening by acknowledging statements. Acknowledging is not the same as supporting, by acknowledging we show we are listening but do not necessarily show agreement. Using phrases such as ‘I understand’, or paraphrasing statements show that we are aware of their opinion and their thoughts without necessarily agreeing with them. Taking care to allow people to fully express themselves, especially if they are agitated or excited, is key to defusing the situation.

If we must disagree with them, we should take care to make a positive statement before and after the disagreement. This means saying things like ‘I fully understand what you’re saying, and will do my best to help. However, I will need some time to investigate the situation. Let me come back to you in X time’.

Remember counter offers can be counterproductive

Communicating online can bring a sense of urgency to get the conversation over with quickly, especially if people are not used to virtual communication methods. This unnecessary pressure can cause people to make hasty, often ill-considered counter offers or proposals in a bid to reach an agreement about the difficult conversation they’re having or to tick the task off our list. Whether this is agreeing to workloads for the week, or discussing a pay rise – rushing conversations and making hasty proposals can be counterproductive and may show you’re not really listening and intent on pushing your own agenda. Good communication is about listening and understanding the needs of others, whilst maintaining a strong stance.

Avoid irritating verbal behaviours

Having a difficult conversation in the workplace is hard enough without the added complication and tensions that communicating virtually may present! Try to avoid adding to this by keeping the conversation free from irritating verbal behaviours. This means avoiding self-praising declarations by using words such as ‘fair’ and ‘reasonable’ when talking to people. This can cause tension as they can undermine the person you’re speaking to and may cause lasting damage to your relationship.

Other verbal behaviours such as telling someone you’re ‘being honest with them’ or ‘that you’re trying to be frank’, can indicate that you may not have been completely honest in the past, or that you may be suggesting your counterpart is being intentionally dishonest. Steer clear of this use of language. It can lead to tension and a breakdown in communication further down the line.

Remember to show emotion

Perhaps surprisingly, skilled communicators show their emotions and indicate how they are feeling towards a situation more than the average communicator. This skill is particularly important what dealing with a difficult online conversation. For example, phrases including ‘I am pleased we are making progress’ or ‘I’m worried that this won’t work out’, can be used as a substitute for an outright agreement or disagreement as it’s difficult to argue with someone else’s emotions. This verbal behaviour also reveals something personal, which is likely to encourage trust within a conversation. If someone expresses that they’re concerned a deadline won’t be achieved – it’s then difficult to retort with ‘no you’re not.’ When used in the right context, showing emotion is a highly effective way of deescalating confrontation.

Ensure you avoid defend/attack spirals

Defend/attack verbal behaviour is when the focus shifts from the problem to the person and the conversation becomes personal. Skilled communicators avoid this behaviour during a difficult conversation, as it can generate frustration and end very negatively. Usually, involvement in a defend/attack spiral is a heat of the moment reaction and it can be tricky to avoid. Difficult conversations tend to be high pressure, so to avoid this behaviour communicators should aim to understand and resolve, rather than react. This allows the conversation to become open and a solution to be achieved harmoniously.

If you want to learn more about how Huthwaite International can help your team develop a highly effective virtual communications strategy visit: https://www.huthwaiteinternational.com/business-performance-solutions/delivery-options/virtual-learning

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Brand guidelines: the antidote to your business’ identity crisis

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Brand guidelines: the antidote to your business’ identity crisis 4

By Andrew Johnson, Creative Director and Co-Founder.

How well do you really know your business?

Do you know which derivative of your logo to use on a pink background? Have you got a preferred font for PowerPoint presentations? Would you be able to look at a range of social posts and pick out the ones from your brand?

If your answer to any of the above is no, it’s probably time to think about your brand guidelines. Whether you’ve already got a set but feel they need a refresh or you’re starting from scratch, it’s crucial to have a firm grasp on your marketing do’s and don’ts.

Consistency makes you memorable

Before we get into the details of what to include, why do you even need brand guidelines? The simple answer is consistency.

Consistency is arguably the most important element of marketing. It makes your brand recognisable and helps you become known for a certain look and feel. Having a consistent brand also builds familiarity with your audience. People want to know what to expect from you. If you’re persistently using the same logos, imagery and tone of voice (TOV), people will start to take note and, over time, become fond of your brand. This is how brands become household names.

What’s more, just because you think you know your business inside out doesn’t mean everyone who joins your team does. For anyone creating marketing materials for your business, brand guidelines are an invaluable tool to ensure everything is in line with your desired look and feel.

Building your brand

Having a set of concrete brand rules will help your company look its best at all times. So, what type of things should you include in your brand guidelines?

  1. Define your vibe with TOV

Tone of voice is your brand’s personality coming through in words. Do you want to appear funny or serious? Casual or formal? Cheeky or respectful? Enthusiastic or matter of fact? Your TOV will be a blend of these different elements and work on a scale.

In your brand guidelines, you should clearly state “we write like this” and “we don’t write like this”. Are there any words you don’t like? Can you use casual contractions (“you’re”, “it’s”, “can’t”) or would you prefer to take the more formal route and avoid them? Are you comfortable shortening your brand name from, say, “Hyped Marketing” to “Hyped” or should the full name be used at all times?

These are all important things to consider if you want to make sure anyone writing marketing materials for you is on the same page.

  1. Pick (and stick to) your colour palette
Andrew Johnson

Andrew Johnson

Colours have a remarkable way of evoking certain feelings. For example, blue is often associated with trust, which is why you’ll see banks and hospitals use it a lot. Once you’ve chosen your colour palette, it’s important to stick to it to create a cohesive feel across all materials.

Your brand guidelines should contain CMYK, RGB, Pantone and Hex colour references for each colour in your palette. These references make it easy for anyone producing or printing materials for you to ensure they have an exact colour match — rather than just taking a wild guess!

  1. Learn your logos

Your logo should reflect what your company does day-to-day and marry together your colour palette and TOV into one little emblem.

Most businesses have derivatives of their primary logo, which should be used wherever possible. Your choice of logo will depend on where it appears. For example, you might use a white version of your logo on a solid colour background or a black version when colour printing isn’t available. Icon logos (with no accompanying text) also tend to be more suitable for social media profiles.

It’s also important that your guidelines include the correct proportions, opacity, colour usage and exclusion zone so that your logo always appears as intended. No one likes a squashed, off-colour logo!

  1. Tune into typeface

Selecting one or two fonts to be used across all materials is vital for maintaining consistency and expressing your brand personality. Do you prefer serif or sans serif? Sans serif is becoming increasingly popular (particularly for online materials as it’s easier to read on a screen) but serif still has a more formal effect.

In your guidelines, define where these fonts should be used. For example, you might use one  for internal communications and another for external or different ones for online or offline materials. It’s also worth choosing one font for headings and another for body copy or sub-headings. Make sure you note which colours from your palette should be used as well.

  1. Include the right imagery

Elegant copy, snazzy colours and a slick logo are all essential for your brand’s identity. But what about images? It’s key to include a section in your guidelines about the kind of imagery that should be used across your marketing materials.

Do you prefer photographic or illustrative imagery? Should your images feature people? Will you take the photos yourself or are you sourcing them elsewhere? If so, where are you sourcing them from? Get it all written down to ensure all imagery used is in line with the look and feel you want to create.

It’s never too late…

You may be reading this and thinking it’s too late for you to draw up brand guidelines for your company — but it never is.

While it may feel daunting to overhaul the way you produce your marketing materials, progressing with more consistency only cements what works for your brand and helps dispose of anything that doesn’t.

Are you looking to refine your brand and ensure it’s instantly recognisable? Get in touch with us today to learn more about our branding services and how we can help create brand guidelines and a TOV document for your business.  

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