In an Interview with BW CFO World, delve into essential insights with Sanjay Bakulchandra Upadhyay, CFO, Deepak Group, on cultivating financial resilience in dynamic markets. Explore effective strategies, the definition of financial resilience, adapting financial goals, scenario planning and fostering alignment across departments for sustained success in today’s ever-evolving business environment
In your opinion, what are some effective strategies for cultivating financial resilience in dynamic markets?
In the last few years, we have seen many events which included Pandemics, wars between countries, geopolitical risks, supply chain issues and the closure of some financial institutions which has impacted the financial performance across the globe. One lesson that recent years have taught is that businesses of all sizes must be prepared for anything and having financial resilience is one of the major contributors to financial wellbeing.
If we talk about strategies, according to me, cultivating resilience requires strategic agility by identifying potential market disruptions, competitive threats. There always has to be a plan in place for alternatives.
Secondly, It’s not just about mitigating risks, it’s also about identifying and seizing opportunities. Strategic expansion across the value chain through disciplined investment has contributed resilience to our organisation and helped sustain financial performance.
Rigorous approach to cost management through supply chain efficiency and logistics management, backward integration, recycling as well as maximising asset utilisation for enhancing return on investment has contributed in optimising the financial performance.
Lastly, for the unknown and ever-changing business landscape one must have the ability to respond and adapt quickly.
How do you define financial resilience, particularly in the context of dynamic markets?
Building resilience requires a tremendous amount of energy, time, effort, persistence, discipline and flexibility as disruptions can arrive from any direction.
In the ever-evolving business realm, effective decision-making and the ability to make informed choices stands as a cornerstone of success. While framing the decision, a meticulously structured approach should be followed with flexibility, speed and collaboration.
Once the decision is made, it’s imperative to not only set your strategies in motion but also monitor their progress and adjust as needed.
I would define financial resilience as allowing business the flexibility required in the dynamic scenarios to change the course or pivot without affecting the Financial levers.
As market conditions change, financial priorities can sometimes shift. How can individuals best identify and adapt their financial goals in a dynamic market?
Within the complex and ever-evolving finance domain, adopting resilience measures is not a strategic choice but an essential one.
We have to remain agile, nimble, responsive and continuously seek innovative ways to provide value while seizing opportunities from fast changing industry trends. One must keep multiple options to overcome volatile situations.
One has to stay informed about the best industry practices and trends and regularly monitor the revenue generation strategies by proactively managing risks and leveraging them to drive sustained high growth.
How do you approach scenario planning to assess the financial resilience of the company in the face of unexpected market disruptions?
Building and applying scenario plans helps the company remain flexible, resilient. Even if the exact scenario isn’t likely to occur, running models can reveal valuable insights.
We develop scenarios (optimistic, pessimistic, baseline) by actively monitoring market trends, competitor moves and customer behaviour along with challenges and opportunities that may arise and assess their impact on key performance indicators (KPIs). We also break goals into various milestones to keep better control on results.
This enables us to adapt quickly to changing circumstances and gain a competitive edge.
How do you communicate the importance of financial resilience to other departments within the company and how do you ensure alignment across all functions?
We promote an inclusive and collaborative work environment where individuals across departments and hierarchies are encouraged to share their ideas, expertise and perspectives. Things become easier to explain and digest if they can be converted into numbers, which we do most of the time.
This collaborative approach promotes the ability to stand steadfast in the face of a complex, dynamic, challenging and ever evolving environment, innovation, fosters creativity and accelerates the implementation of new ideas and technologies.