Companies around the world have been impacted by a chain of catastrophic market events over the past few years. From the COVID-19 pandemic to the US banking crisis, ‘black swan events’ have been thrust into the spotlight. Popularised by economist Nassim Nicholas Taleb, the term black swan events describes unpredictable one-off events with severe consequences.
One such example is the financial aftermath of the pandemic. Despite a lengthy three-year recovery period, Asia’s growth is expected to decline to 4.2 per cent in 2024 — the lowest in the past two decades (apart from 2020).
With increasingly frequent macroeconomic shocks, companies must prepare for disruption to be part and parcel of everyday operations. Considering the high-interest rates and the slowdown of two of the world’s largest economies, China and the United States, 2024 may turn out to be another year of market turbulence.
It’s time for businesses to consider black swan events as something to be expected. In 2024, small- and medium-sized businesses (SMBs) and large enterprises must consider how they can strengthen their business resilience and navigate the era of a poly-crisis world.
Building a borderless workforce
For companies to thrive and scale in this new era of business, companies and their leaders that shift away from traditional business models and embrace a global mindset will be better set to capitalise on future growth opportunities. According to recent survey findings, 66 per cent of leaders worldwide stated having employees in multiple countries is part of their business strategy, including 28 per cent who say it is central to that strategy.
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In an increasingly volatile world, tapping into global talent pools is not only a way to increase diversity but also a survival strategy. An ‘anywhere workforce’ means businesses can reduce over-reliance on a specific type of talent and have better access to the skill sets they need, regardless of location.
When employees are equipped with a broader range of skills and work across multiple locations, businesses are no longer confined to a specific market and become more resilient against frequent business disruptions.
The same survey also found that employees prefer to work in global teams — 93 per cent of Singaporean employees want to work for a global company, and 90 per cent believe that global companies offer more opportunities for their career growth.
Furthermore, it can help increase cost savings and revenue growth; APAC-based pharmaceutical company Amoy Diagnostics (AmoyDX) was able to achieve a revenue of US$13.8 million by the end of 2022 after expanding its talent pool internationally.
Regular scenario planning is imperative
Scenario planning is a strategic tool for businesses to analyse alternate future events and create flexible long-term plans. Against the backdrop of wildly unpredictable and more frequent black swan events, effective scenario planning is increasingly complicated and should be a regular exercise for businesses so they are well-equipped to mitigate risks from potential uncertainties.
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Instead of relying on traditional scenario planning, leaders can turn towards leveraging artificial intelligence technologies as a viable solution to consider possible hypothetical scenarios, evaluate their potential impact on the business, and identify ‘fail-safe’ critical decisions that will spur the business’s growth trajectory.
Forming the right strategic partnerships
Staying ahead of the competition often means accelerating speed to market in today’s business landscape. Navigating and adhering to unique expansion and employment compliance laws and regulations in individual markets can be complicated and time-consuming. In fact, 32 per cent of leaders are deterred from recruiting and hiring in international job markets due to regulatory complexities.
Employment of Record (EOR) partners can support businesses in building global teams and streamline cumbersome and time-consuming processes when entering new international markets. This speeds up the compliance process, allowing businesses to remove entity requirements and overcome different employment regulations.
By tapping a strategic global growth partner with HR, compliance, and legal experts in the region, businesses can better tackle ongoing challenges and accelerate global growth strategies. Through a collaborative approach, businesses can focus more on scalability and expanding their workforce.
Charging full steam ahead
In a globally interconnected world, encountering another black swan event is not ‘if’ but ‘when’. Building a global workforce, prioritising contingency planning, and expanding strategic partnerships are all essential strategies to circumvent everyday business disruptions and build the resiliency needed for long-term success.
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