STOLTZ & WOODARD: Hindsight 2020: Five lessons for business resilience in 2021

A sign advertises a restaurant opening Tuesday, March 16, 2021. (AP Photo/Marcio Jose Sanchez)

Innovation, education and a culture of collaboration are key drivers of the Triangle’s success and should give us hope for recovery beyond the pandemic. We continue to see growth across the life sciences, technology and advanced manufacturing sectors.

While many companies are still dealing with the impacts of the challenges of 2020, innovative companies are applying lessons learned to excel in 2021. Here are five ways companies can capitalize on emerging opportunities.

A thorough, proactive review of internal processes and relationships can help protect your company. For example, cash flow issues are a common source of business failure, so it’s important to examine your supply chain and customer base for vulnerabilities that could impact your business and review customer payments to identify issues before they become problematic. 

Reactively cutting expenses can have unintended consequences. Instead, identify “what if” scenarios now so you have a solid, vetted plan to leverage proactively. 

The M&A market shifted in 2020 due to the impact of the coronavirus and widespread digital transformation. Companies with strong working capital and cash reserves could have a significant opportunity to put that to work through a merger or acquisition, especially if they have limited debt. 

If your company is not positioned to pursue M&A activity, develop a strategic plan for future growth. Begin identifying the top opportunities, whether it’s market expansion, reaching a new customer segment or digitizing more of your business model. Consider potential hurdles as you formulate an actionable, prioritized plan.

Cybercrime is more of a risk in today’s remote work environment, so companies must prepare themselves. Criminals realize that workers are less protected when working remotely. To reduce vulnerabilities, look to strengthen mobile device management, ensuring security tools and protocols are in place. 

Policies should provide guidelines on the safe use of public Wi-Fi, prohibit workers from transmitting sensitive information and require the use of VPNs and well-protected home routers. Cybersecurity training can teach employees how to put essential safeguards in place. 

Just as you’re taking steps to safeguard cash flow and business operations, it’s essential to protect the well-being of your employees.

Focus on environmental, social and governance (ESG) creates a responsible and sustainable culture that directly links to a company’s long-term outlook. 

Best practices for strengthening your company’s ESG commitments include disclosing comprehensive ESG information, helping investors understand it, having a diversity and inclusion program, and ensuring diverse representation on the board of directors. Employers surveyed in our 2020 Workplace Benefits Report cite diversity and inclusion programs as essential for retaining talent (73%) and something that builds a strong company culture (76%). 

Along with the social benefits these actions bring, looking out for the good of society is good for companies, too. During the market fall in March 2020, $8.2 billion was pulled out of equity ETFs while ESG funds tracked by BofA Global Research2 continued to attract inflows, suggesting that fund managers faced less pressure to sell stocks with strong ESG characteristics.

Just as you’re taking steps to safeguard cash flow and business operations, it’s essential to protect the well-being of your employees. 

Comprehensive wellness programs that support employees’ physical, mental and financial health are more important than ever. The percentage of employees who rate their financial wellness as good or excellent declined from 61% in 2018 to 49% in 2020, and as many as 57% of employees feel their well-being has impacted their productivity, which could have major ripple effects on a company’s health. 

Coronavirus created unprecedented challenges for companies. While we may not know what the remaining months of 2021 will bring, these lessons from 2020 can help companies reignite growth and plan for financial success. 

Kari Stoltz is the Bank of America market president for the Triangle. Felicia Woodard is the Bank of America business banking market manager for the Triangle.