No business, society or organisation operates in a vacuum, and we have long lived with turbulent and changing landscapes. In fact, innovation often occurs when we are at our most challenged.
I think the issue is being clear about what we need to prepare for, what we can change, what we just must manage and what we should have foreseen.
UK businesses know this all too well, as they still feel the aftereffects of the pandemic, the impact of the cost of living creating the surge in inflation caused by the economic re-opening, compounded by multiple geopolitical conflicts and greater social polarisation. A new government and new budgets and focus. No one is in doubt that we need to grow as a nation and the very real concern over stagflation is something we cannot ignore.
However, while specific shocks can be difficult to plan for, many global disruptions are at least somewhat foreseeable. For instance, political shifts like those from the U.S. should not have come as a surprise, given that President Trump’s economic approach is consistent with his campaign pledges and a long-term enthusiasm for tariffs going back decades.
One thing we have learned over the last few years is that uncertainty is the new normal. We must ask ourselves as businesses if we are planning as well as we can – and future-proofing our businesses from both expected and unexpected impacts. And while we can’t anticipate the exact nature of upcoming turbulence, we can organise our businesses in agile ways, plan for rainy days and stress-test different scenarios.
Customer loyalty is a strong defence against disruption
Building supply chain resilience is clearly part of this. Engaging proactively with key stakeholders – most obviously suppliers, but also investors, customers, and employees – builds resilience and goodwill. A strong brand and consistent customer loyalty are also strong defences against external shocks. This can be achieved by delivering consistently on your core offer, keeping promises, fostering an emotional connection, and maintaining trust.
Businesses that have built up a bank of goodwill with their customer base are better able to weather uncertainty and disruption. For instance, we know from our research that far more consumers (31%) are willing to spend more for good service than the proportion for whom price is paramount (19%).
We also know that businesses that don’t look after their reputation can suffer, with 62% of consumers believing that bad practices or behaviour will damage a company’s long-term reputation, and 43% having avoided using a company’s services because of perceived poor ethical practices.
This is compounded by the fact that the strongest correlations with high levels of customer satisfaction relate to emotional connection (trust and feeling reassured) and perceptions about an organisation’s customer ethos, its care for customers, level of openness, transparency, and reputation.
Aside from the long-term benefits of fostering your customer relationships, these insights also suggest that businesses which deliver an excellent customer experience are able to maintain higher margins and – where necessary – raise prices with less impact than those which do not.
Focus on effectiveness, not just efficiency
In responding to uncertainty, some organisations make the mistake of implementing cuts that erode their core service proposition. Of course, cutting staff or service provision can deliver short-term savings. The problem with this approach, however, is that ultimately customers will vote with their feet and tell plenty of others as to why they are doing this!
Investing in strong stakeholder relationships and maintaining service quality will invariably deliver better long-term financial results. Reducing the human, convenient, or reliable aspects of a service in the name of saving money can be self-defeating – ultimately, efficiency is not efficient if it isn’t effective.
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