How Improving Communication Can Drive Financial Agility

This article was published on Forbes.com in March 2021.

Achieving and maintaining greater adaptability is critical to companies’ growth. And experiences with Covid-19 have prompted businesses to become more agile.

In late 2020, Forbes Insights conducted a survey on behalf of Capital One in which 1,001 U.S. mid-market executives were asked about the importance of agility within their organizations. How effectively did their companies adjust their business models when necessary? How well did their employees handle the transition from in-office to remote?

The vast majority (82%) agreed that achieving and maintaining greater agility is critical for their firms’ growth, and that their experiences with Covid-19 are prompting their enterprises to cultivate agility (83%).

While fewer than half of the respondents (44%) said their companies were particularly agile before the pandemic, the vast majority (87%) expected to see improvements by the end of 2021.  

And yet, a large majority of executives (79%) are encountering challenges when it comes to balancing stability against the need for agility within their organizations. That raises the question: How do they plan to improve agility in the coming year? 

 

More Frequent, More Transparent Communication

Surveyed executives pointed out the importance of both internal and external communications in getting things done, whether that meant improving the employee experience or increasing visibility into finances.

When asked specifically about improving balance sheet and cash flow agility, more than half (54%) cited the need for more frequent and transparent communications with key financial stakeholders, such as creditors, investors and shareholders.

More than a quarter (26%) of the executives surveyed also intend to improve their relationships with external banks and other partners. 

At the same time, executives were less likely to turn to traditional methods for promoting financial agility. Only 8% mentioned issuing stock as a means for promoting agility in their companies’ deployment of capital; 9% also cited reducing capital expenditures. 

Just 6% of the survey respondents mentioned issuing debt.

 

The Importance Of Collaborative Tech

Working together is critical for transformation. When asked which steps they’re taking to improve technological agility, 63% of executives pointed to using collaboration tech such as remote conferencing, digital workflows and omnichannel platforms.

Certain sectors are more focused than others on collaboration, the top three being:

• Manufacturing (76%)
• Healthcare/life sciences (75%)
• Telecom (72%)

 

Always Be Communicating

A generation ago, “improving communications” meant sending more memos from the boss’s office. 

Today, more companies are combining top-down messaging with cross-company and bottom-up messaging.

As the survey demonstrates, modern executives are serious about improving their company cultures, specifically when it comes to creating and communicating more agile workplaces.

To improve agility, our surveyed business leaders are:

• Streamlining decision making, with an eye toward greater autonomy around a clearer set of core values (47%)
• Embracing agile workflows and methodologies (46%)
• Paying closer attention to employee engagement (40%)

If there’s a thread that connects these strategies, it’s communication—between employees, between departments, between management and staff.

In times of crisis, it’s critical to have this flexibility and the ability to communicate about it effectively. 

It’s no secret that communication skills are key to an executive’s success. Great leaders must persuade, compromise and sympathize—often at the same time. Their words can reward during good times and inspire during the bad.

The same can be said of companies themselves: An effective communication strategy can serve the same functions. And, by fostering a company culture of flexibility and agility, it can also help the bottom line.

 

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The information contained herein is shared for educational purposes only and it does not provide a comprehensive list of all financial operations considerations or best practices. This information does not represent any commitment, financial obligation, advice, opinion, guidance or recommendation, whether formal or informal, of Capital One, National Association, or any of its officers, directors, employees, advisors, attorneys, consultants, affiliates or subsidiaries (collectively, “Capital One”). Nothing contained herein shall give rise to, or be construed to give rise to, any obligations or liability whatsoever on the part of Capital One. 

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