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Supply Chain Risks Need to Be Prioritised in the Outsourcing Revolution

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Supply Chain Risks Need to Be Prioritised in the Outsourcing Revolution

By Alex Balcombe, Partner at Harris Balcombe 

Outsourcing has come into its own in recent years. More people than ever before are opting to work for themselves and offer their services on a contractual basis.

For businesses that don’t have the capacity or expertise to handle certain processes internally, outsourcing is a blessing. Businesses are seeking technology resources to give them the competitive edge, and hiring manufacturing companies to produce their goods.

Yet the fact that they are no longer simply selling on their own merits opens them up to risks. Businesses are relying on other companies, their operations, people, reputations and decisions to fulfil their own supply chain. If inventory or services are not received on time, it can have a huge domino effect.

The challenge?Getting more companies to undertake contingency plans, insure themselves against the risks of outsourcing and understand the policies that they need to takeup. Being confident in your network of smaller businesses which all have an impact on your bottom line, is crucial.

So, what do you do?

Identify Risks

Companies just don’t operate in isolation anymore, yet supply chains are rarely brought up as priorities in board rooms. What happens if your biggest supplier has its own disaster, isn’t able to get a delivery to you in time and the goods you rely on fail to arrive? This could result in higher costs by having to switch to an alternative provider or even loss of business.

Before you even think about insurance, it’s smart to prioritise a contingency plan. In tumultuous and unpredictable financial times, and as global supply chains continue to grow in complexity, so too do risks. From top to bottom, having a deep understanding of your supply chain is invaluable.

Undertake a comprehensive review of all of the potential drawbacks or situations that could arise externally. By identifying these high-risk areas, you can make sure that you prioritise mitigation strategies, and have a flexible response plan should any of these problems occur. You should document this process in a risk management document, which will help you to develop realistic, cost-effective strategies should a disruption arise.

Resilient Strategy

If you do encounter a bottleneck situation, where key components you usually source from are not available, the company with the better resilience strategy will thrive.

Conduct safety training, have a proactive plan in place, and have other available suppliers on hand. If your key overseas supplier has a logistics issues, finding a replacement at the drop of a hat can be near on impossible if you don’t have a plan in place. For each risk to your global supply chain, you need a contingency strategy in place. It’s also wise to test any plan of action before any problem happens, to allow you to make the supply chain as resilient as possible when facing a disruption.

The Insurance Question

If you depend on many different players to meet deliverables, how do you insure yourself in case they fail to fulfil their work and your business suffers?

One of the most greatly misunderstood types of insurance is business interruption. Some think that any costs associated with business recovery will be picked up by interruption insurance – but this is not true. Business interruption insurance only covers your company operations – you need a supplier extension clause.

A supplier extension insures for the interruption to the supply of goods or services from third parties. It’s also worth noting that you will only be covered if the supplier is hit by something that you have already insured yourself against.

Even if you have the right insurance, the most challenging part of quantifying interruption claims to your supply chain is still the same as if it was a ‘traditional’ disaster such as a fire. This means proving how you would have fared had the incident not occurred.

Insurers may scrutinise your circumstances to, put simply, try to pay you as little as possible, working with a team of professionals to check you have met all of the conditions of your policy.

A specialist claims consultant can help you with the whole process and pick up on crucial points. They can advise on the best course of action, help you to understand your circumstances, minimise further business loss and assign you a team of experts to help. They will also handle all of your paperwork for you, to save you the headache, and negotiate with insurers to prevent any delays or disputes.

Use insurance as a method to control supply chain risks, but don’t use it as an excuse to avoid planning. If you come up with a strategy to stop your business from falling foul to supply chain problems before they arise, you can avoid bottlenecks further down the line. All businesses rely on suppliers and service providers, but the status of them is getting more and more complex. Take the case of Carillion, which highlighted how the collapse of one company can have such a big impact on supply chains.

We’re in the age of efficiency and we’re constantly being measured against productivity. Outsourcing reduces overhead costs, supports innovation, offers global access to talent, enables you to quickly implement new technology and focus on other tasks. However, you do need the reassurance that if a disruption does happen, you have a resilient plan in place now to act quickly, not hastily react.

Business

5 ways to keep your team connected with split working

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5 ways to keep your team connected with split working 1

By Sam Hill, Head of People and Culture at BizSpace 

As the government switches its message back to “work from home” where possible, businesses face a challenge as their employees are split between locations, with bubbles in one place and individuals elsewhere.

Although technology has permitted teams to stay connected over the past few months, the return of some employees to the office presents a new challenge to leadership as they must ensure those who remain working from home are not left behind. As teams typically speak less frequently when working remotely, employers must ensure that their employees who are not yet in the office do not feel isolated and that the culture remains unchanged.

Employees have a need to feel valued and connected to other members of the firm, even when working remotely. To aid business leaders in ensuring they avoid ostracising colleagues at home, this article provides practical tips for employers on achieving an inclusive workplace while their employees engage in split working.

Maximise the use of technology

When part of the team has returned to the office, it can be easy to forget to include remote working employees in particular conversations which may happen in passing or casually during the day. For remote working employees, this can be a significant contributor to them feeling isolated or that they are unable to sufficiently complete their job at home.

To combat this, business leaders should ensure their teams continue to use technology to their advantage. To maintain the communication which can be lost with remote working, management should continue to host daily or weekly team meetings via video conferencing, where employees can catch up and share what they are working on. This will ensure all employees continue to build connections and celebrate their achievements.

Encourage team work wherever possible

When employees work separately in different locations, it can be easy for those away from the office to feel isolated and detached from their direct team. Despite this, business owners should encourage teamwork wherever possible to allow the group to solve issues together and meet targets in a more efficient and effective manner.

Employees working remotely can struggle to speak up when they are facing challenges since they cannot turn to a colleague as quickly to ask for advice. By encouraging team members to work together, this issue can be combated as employees build a natural relationship over time where they feel more comfortable reaching out to their peers, while the added benefit of being virtual ‘opens the door’ to new lines of communication between colleagues which may not have communicated face-to-face.

Reinforce the company culture

Sam Hill,

Sam Hill,

While employees are split between home and office work, it can be easy for the culture of the company to begin to slip. It is important for leaders to ensure they are proactive in nurturing and reinforcing the company culture, since healthy company cultures have a direct impact on the performance of teams.

Taking the time to reinforce the vision and values of the firm to employees will help to ensure the team is in touch with the wider goals of the organisation. Coupling this with the open communication of any news or updates relating to the company will allow for transparency, an important trait which ensures employees remain loyal to the company. Uncertainty is detrimental to the morale of a team, so any communication should be as clear and certain as possible.

Introduce lunch and learn talks

Lunch and learn sessions are a great way to ensure businesses are stimulating employee engagement and generating a positive team activity. They are typically less formal and can offer employees opportunities to deliver talks on a variety of topics which are directly or indirectly related to the business.

For employees working remotely, this is a perfect way to ensure they are still able to engage in training, with video and audio conferencing opening up the ability for remote workers to tune in wherever they are.

Don’t dismiss virtual social events

Although the use of zoom quizzes and calls quickly became tiresome for many employees during the national lockdown, the use of virtual social events should not be dismissed by businesses. For employees still working remotely, these social events are a direct replacement for the usual social events and informal drinks after work which they would have otherwise attended. Since employees who have returned to the office may be engaging in more social events in person, it is imperative for businesses to facilitate a space for remote working employees to socialise.

Social events are an easy way to create natural conversation opportunities and bring employees together on a far more personal level. They also contribute to the success of the firm by boosting the morale of employees, leading to higher productivity and satisfaction in teams. This, in turn, can boost the company culture as employees feel a higher sense of loyalty to the organisation, even from their remote locations.

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The new virtual leaders – adapting your leadership style for a changed workforce

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The new virtual leaders – adapting your leadership style for a changed workforce 2

By Debbie Clifford, Head of People and Talent at Olive

During this pandemic, organisations across all sectors have witnessed a dramatic change in workplace structure, and as such have had to undergo huge changes themselves to adapt and pivot to the needs of their organisations and new, remote workforces.

With many finance organisations continuing in the main to operate remotely or operating a hybrid office model, senior leaders in finance have been required to adapt their leadership approach, shifting from the traditional ‘boardroom culture’ to a more approachable and inclusive management style.

 The key characteristics of the new virtual leader 

Prior to the pandemic, leadership, in general, was starting to move towards a more open and trusting relationship between leaders and teams. Yet there hadn’t quite been the evolution towards a more emotionally intelligent and involved leader.

While challenges or issues relating to staff were easier to pick up on in the office; previously, managers could take cues from certain behaviours and attitudes witnessed during the working day. Now, that’s almost impossible, and leaders are having to invest more of their time in people management, which presents both a challenge and an opportunity.

The shift in emphasis on the management of people will continue to grow in the remote workplace. Yet leaders have to accommodate this while still having to meet their own ongoing commercial and operational targets. It’s tough, but ultimately the more you invest your time in your people the more likely you and your team will succeed.   Managing true performance, giving feedback regularly, interacting, and ensuring regular check-ins will stand you in good stead to achieve your goals with the support of an engaged team.

Build Trust. Communicate.

With everyone working from different locations, it’s hugely important to instil trust in your people and become more output focused. There are various performance tools that can help you to achieve that, such as goal setting (using your HR system or Performance platform), ticketing systems such as JIRA or CSAT data that comes back from Voice of Customer surveys, as examples. It’s also equally important to have open and honest conversations with your people about how the world of work has changed. The changing nature of our day to day work may mean that your team may feel that they are being questioned more, possibly even micromanaged – due to the increase in internal meetings and catch up’s. It’s really important to communicate the reason for this, due to less ‘in person’ interaction.

Employees not used to home working have found themselves without the face to face guidance they are used to, thus the reciprocal trust between team member and manager becomes even more important to hone, alongside measuring productivity and output of work. Also remember that everyone will be struggling at times and many are suffering from the shift to permanent home working. Microsoft  reported how the move to homeworking has impacted the global workforce.  People are working longer hours, starting and finishing later, are overworked and stressed.

As a leader, and an emotionally intelligent one, it’s important to be mindful of the effect of home working and that there’s no separation between work and home anymore.

Trust is one of the most important traits you want to cultivate and build in your team, being authentic, open and honest will take you to performance you never thought you could achieve. Your behaviour as a trusting leader will enable you to drive performance and loyalty from your team that will exceed all expectations. It is key to driving empowerment, accountability and ultimately, productivity.

The importance of HR

 Look to your HR team for more guidance, as the disciplines of HR have and will continue to change during this time. Previously, HR in the main was the recruitment arm for the business or for discipline or exit purposes. Now HR is central to driving team engagement and development.

This period, viewed positively, should allow for your employees to have more capacity to bring on their personal development (no long commute for example) and many will be actively seeking this. See it as an opportunity, as in turn it will be valuable to your organisation. HR is key to fostering team environment and collaboration; Encourage your HR team to drive an engaging personal development programme for your employees to make them feel valued and valuable.

Debbie Clifford

Debbie Clifford

Appraisals will also need to change and be more agile. What you set today as a performance goal could easily change tomorrow due to the current market dynamics. By focusing on people, the more time efficient you become, and the more interactions you have, the more you get buy in. Your team will understand more about your objectives and intent and feel more bought into the overall vision and goal.

Get involved and show recognition

Be visible on the team internal and external socials. Break the barrier. Work has changed so much that we’ve all had to change. Prior to Covid some leaders and senior management may have felt that being visible on the company social channels may not have been appropriate. This is not the case now. And it doesn’t have to be all about company business. Make it personal and be human.

Thank and show your team that you have noticed them. Find somewhere where you can share recognition, such as the company Teams channels or intranet which are great for peer to peer feedback and help keep people engaged in the company activity.  Reward good effort with the offer of a few hours off or send some flowers. It will make your employees day and show them they are valued. Small gestures of kindness go a long way in this virtual working world.

 Create a management and development pathway  

Shared learning is a great way to engage the senior team members as part of a learning and development pathway that cascades through the business. Examples of this include small bitesize pieces of learning, such as packaged business leadership content, a TED talk, white paper or video that senior leaders can absorb, and coach to their managers, which in turn then cascades through to employees.

Done on a regular basis, this practice helps your finance firm move your management teams forward. It’s a structured way of learning and sharing with a consistency of language and approach – with everyone seeing and learning the same things.

The importance of self-discipline

It’s never been more important for leader’s to not burnout and be a positive role model to the organisation.

Be disciplined – don’t be ‘always on’ and responsive all the time. Be aware that leading by example will have a positive impact on your organisation.  Think about what works best for you as a leader and make time to move away and have some space – your team will respect this and follow your lead.

It’s important to remember and acknowledge that we are all learning all of the time – and that often we don’t have all the answers. Showing a level of vulnerability, humility and honesty to your team will go a long way towards connecting with them in a deeper and meaningful way, and more than ‘being the boss’ and getting tasks done. High performance is gained because of the way you trust and believe in people, not because of your status in the hierarchy.

Ultimately, successful leaders are ones who create their culture, who are liked and respected by employees. Post pandemic the new workplace could and should be a much better place, with much better leadership. If we don’t use this time as a catalyst for change, we’ve potentially missed an opportunity to make something bad something much, much better.

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Thinking Long-Term When Your Shareholders Won’t Let You

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Thinking Long-Term When Your Shareholders Won’t Let You 3

By MaryLee Sachs, US CEO, Brandpie

In a recent study of nearly 700 CEOs across the US and Europe, my team at Brandpie uncovered that 76% of chief executives think corporations need to shift focus from short-term profit delivery to long-term value creation.

So why have less than 5% actually made that shift?

Uncertainty about the future, and how to navigate increasing pressure from shareholders to survive the present moment can make the shift from short-term profit to long-term value feel like a pipe dream. And that makes sense, even more now than it did when we administered the survey before the COVID-19 pandemic had taken root.

But even amidst the most uncertain period of history in many of our lifetimes, and certainly the most uncertain business landscape, the transition is possible. If they can be bold enough, those CEOs who have identified the need to shift toward long-term value can join that 5% of leaders who have already taken the leap.

All they need is purpose.

But I’m not talking about surface-level mission statements or even commitments to meeting ESG requirements.

CEOs that are ready to successfully pursue long-term value creation need something much deeper: a north star that guides businesses from the inside out. A purpose that primes them, through long-term considerations, to respond quickly and effectively to short-term concerns to benefit share and stakeholders – including staff and brand audience – across the board.

A north star

The most common barrier to leaders looking to make a long-term impact is uncertainty, and the world is increasingly rife with it.

Businesses must find a way to offer some sense of security, to shareholders and stakeholders – and purpose is the path to that security.

Organizations that have orientated themselves around a north star internally and externally are better able to address, respond to, and pivot in the face of unexpected events and the endless changing market landscape.

Take a company like BlackRock – whose CEO Larry Fink has been a long-time advocate of purpose, calling it “the animating force” for achieving profit. When I spoke to Frank Cooper, BlackRock’s Senior Managing Director and Global CMO in a webinar this summer, he reiterated the organization’s dedication to their guiding purpose, and discussed how it helped them adapt to support their employees and their stakeholders when COVID-19 threatened financial security around the world.

“In the past six months, the COVID-19 crisis, alongside racial justice movements, have drastically changed the ways people expect corporations and corporate leaders to act,” said Cooper. Initially BlackRock prioritized a humanitarian response for the short term – focusing on guaranteeing as much security for their employees, customers, and shareholders as possible. But as part of a purpose-driven leadership team, Frank knew that short-term reactionary methods wouldn’t be enough.

“If you only play defense,” he said, “You will not end up winning. You have to play defense and offence.” And purpose is the game plan that allows you to do that.

Blurred lines

BlackRock’s Fink was also one of 181 CEOs to sign a statement from the Business Roundtable last year, which redefined the purpose of corporations in light of changing business landscapes and an increased focus on stakeholders. The statement also expresses a commitment to prioritizing long-term value to the benefit of shareholders, serving as a reminder that long-term value creation and pleasing shareholders is not remotely mutually exclusive.

That Business Roundtable statement generated a lot of buzz about the rise of stakeholder capitalism, and for good reason. Increasingly, stakeholders are playing a more powerful role in the success of businesses than ever before. And that’s as it should be. Afterall, a company’s worth is only as good as the end service it delivers to meet customers’ needs, and when it comes to employees, they’re the best ambassadors for the business.

Both of these demographics are looking for long-term relationships, security, and to succeed in the long-term, businesses have to find a way to offer that now, or risk losing hold of customers and employees that are crucial to their success in the present moment.

Another rising trend that represents a blurring of the lines between share and stakeholder interests is a new wave of shareholder activism. Rather than advocating for strictly profit driven-changes, firms like Trian Partners and Blue Harbour are investing in order to steer companies towards higher ESG standards, reflecting a more purposeful approach to doing business with not just the future of a company, but the future of the world in mind.

MaryLee Sachs

MaryLee Sachs

Pivoting with purpose

As the COVID-19 crisis continues to throw uncertainty after uncertainty in the face of leaders fighting to keep business as usual as it can possibly be, purpose has proven to be a life-saving tool. It’s allowed many organizations to pivot authentically and smoothly to meet unprecedented internal and external needs.

To survive in any context, businesses constantly need to react to changing conversations to meet stakeholder needs, but the pandemic certainly underscores just how effectively a purpose can ferry organizations through short-term change toward more permanent and relevant adjustments. These uncertain times have also challenged businesses to recognize that purpose incorporates more than just something to stand for, but a way of acting, and focussing on service and fulfilment of need.

In the early days of the pandemic, companies like BrewDog, Ford, and Virgin Orbit stood out for their swift and apparently seamless transition to providing hand sanitizer, PPE, and respirators. Purpose played no uncertain part in these agile short-term pivots – by knowing who they are at a core level, and how their specific expertise positions them to respond to the evolving needs of their customers, they were able to quickly adapt to new, entirely unexpected needs for the greater good. They were driven by clear purpose internally that allowed for authentic outward change.

Playing the long game

True purpose is achieved through constant maintenance and centering – moving forward purpose must become part of corporate hygiene. The current state of business – and the world at large – demands that shareholders get on board with the value of that.

None of us have a crystal ball to determine what will happen. When you think about all the different things affecting the market – a pandemic, Black Lives Matter, equality, ESG – it’s hard to imagine how to prepare your business for any number of continually unexpected factors, while also priming it to last.

But a deeply-rooted purpose addresses both of these problems. By determining the long-term value your company can offer and implementing that internally, you create a resilient operation that knows what it stands for, how it operates, and is prepared to nimbly shift in the face of adversity.

No new normal will ever last, but businesses with a strong sense of internal self and clear, purposeful organization can.

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