These days, a firm’s survival and growth is dependent on whether it is agile enough or not. Here’s why!

Tuesday: Return Driven Strategy FROM THE DESK OF MILES EVERSON: Have you heard about Return Driven Strategy (RDS)? If you haven’t yet, it's a pyramid-shaped framework that has 11 tenets and 3 foundations. When properly integrated into your business strategy, these principles will help you achieve true wealth and value creation. For today’s article, we’ll take a look at RDS’ 7th tenet: Partner deliberately. Continue reading below to know why firms need to be agile in today’s uncertain business environment. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

These days, a firm’s survival and growth is dependent on whether it is agile enough or not. Here’s why! For the past year, there’s been lots of uncertainty surrounding the U.S. economy due to fears of a looming recession. To make matters worse, corporate borrowing costs are going up, making it harder for companies to acquire the necessary capital to finance their operating expenditures, meet their business targets, and hire the people they need. In fact, banks are tightening access to credit faster than anytime since the 1990s, with the exception of the past few recessions. Due to the rise in borrowing costs, there’s been an increase in the number of bankruptcies since not every firm can afford to finance their debt. Based on the problems mentioned above, it’s reasonable to assume that firms across all industries would be downsizing their operations through staff reductions and fewer job openings. However, that may not be the case. According to data from the U.S. Bureau of Labor Statistics (BLS), there are over 8.8 million job openings as of July 2023. Furthermore, employers added approximately 187,000 jobs as of August 2023. These data points imply that companies are still eager to hire despite the uncertainty surrounding the U.S. economy and tight access to credit. While those numbers are encouraging, there’s a question that has to be answered: How can companies hire the talent they need in a turbulent economic and credit environment? By becoming an agile enterprise! According to MBO Partners, an agile enterprise is “an organization or business that moves quickly; one that acts and reacts in a rapid manner.” Simply said, an agile company is able to adapt quickly to changing business conditions. One of the characteristics of an agile enterprise is its ability to deploy financial resources quickly and effectively. An organization of this type does this through the allocation of money to a fund that’s used to address immediate needs or capitalize on unexpected opportunities. Additionally, an agile enterprise encourages the efficient use of manpower resources through contingent labor. Simply said, instead of relying solely on full-time talent to accomplish tasks and business outcomes, an organization hires independent professionals to fill critical roles on a per-project basis. This is an efficient process that minimizes the risk of layoffs and having too much manpower since roles are only filled on a case-by-case basis. Agile enterprises are also able to minimize financial costs since they have the ability to effectively direct both money and manpower to the most sensitive and important projects at any given time. So, how can a firm become more agile in today’s business environment? Adopt a project-based strategy in hiring talent. Changing a firm’s view on staffing is the first step in becoming more agile. Instead of relying solely on full-time talent to meet every business goal, a management team should reassess whether it needs every role within the organization to be filled on a long-term basis. By identifying which roles can be filled by an independent professional, firms can minimize the costs associated with hiring full-time talent. Doing this eliminates the necessity of tying up valuable financial resources on one person for a long time. Create a “virtual bench.” A “virtual bench” is a pool composed of talents that a firm can deploy immediately to work on specific tasks and time-sensitive projects. Creating a “virtual bench” involves the identification of talent that can fill an organization’s short-term or immediate needs. This strategy also involves a streamlined onboarding process for independent professionals so they can be deployed at a moment. By creating a virtual bench, a company can easily deploy manpower wherever and whenever it’s needed. — Our discussion above can be viewed through Return Driven Strategy’s seventh tenet: Partner deliberately. According to Professor Joel Litman and Dr. Mark L. Frigo in the book, “Driven”: “Any successful business leverages the partnership of a whole cast of players outside the firm. The right partnerships allow the business to focus on its strengths and rely on others to do things it ought not bother. The strongest partnerships bring unique assets together that allow the firm to innovate, brand, and deliver unique need-fulfilling offerings.” These days, firms across all industries are eager to expand their operations in order to meet their business and growth targets. The main problems these companies face are the uncertain economic and credit environment. Because of this, businesses need to do more with less financial resources. More importantly, these firms need to have the ability to quickly adapt to changing economic realities. Due to the reasons stated above, enterprises must become agile to effectively navigate and thrive in today’s uncertain business environment. If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you’ve found this week’s insights interesting and helpful.     The business landscape is currently experiencing an exciting phase as new ways of working have taken root. The COVID-19 pandemic has opened doors to a variety of work styles for employees and contractors. Learn more about how you can set independent talent up for success in next week’s article!