Managing Volatility

Henry Mintzberg once said that “Turbulence is nothing more than a change, that planning could not handle.” Certainly nobody would disagree with him today. What is new of late is that turbulence is not a noteworthy event, indeed, uncertainty in the business world is becoming more and more the business norm.

This also means that companies have to brace themselves for permanent high market volatility. Doing so requires focusing much more intently on the financial viability of the strategy and on earnings and liquidity alike. Yet, the reality is that the common static and rather administrative planning processes are no longer able to handle market dynamics. Companies have to be able to react consistently and quickly to volatility or to anticipate it and be able to change the strategy at short notice from consolidation to growth or vice versa. Companies also need to have the ability to navigate in some markets/divisions in consolidation mode and in others in growth mode. For this to happen, effective countermeasures suited to the crisis scenario have to be designed in advance. In doing so, it is essential to take an integrated approach to one’s own earnings and liquidity situation as well as to the financial impact of the countermeasures.

Download the white paper below if you want to know more about managing volatility.