The pandemic tested the resilience of companies, global financial systems and wider capital infrastructures even drawing-in state governments. The learnings will equip us to thrive in the future.
The first and perhaps most striking lesson we learned from the financial impact of the pandemic was that global infrastructures proved to be significantly more resilient than we might have expected. Everything didn’t implode like it would in a Hollywood movie! Companies in sectors like travel and hospitality, despite having had most of their revenues switched-off overnight, have still survived. Rather than collapsing, they moved quickly to minimize costs and went into hibernation sipping life-support capital either from their own reserves, networked stakeholders or, ultimately, received government sustenance.
A condition of government involvement, of course, has been the removal of the insolvency option without the chance to cut and run. Shareholders are obliged to focus on preparing for the long-term with renewed vigor. Elsewhere, many organizations learned that they were actually more capable of agility under stress than they had imagined and quickly adjusting to radically different working conditions while containing costs and spending. Capital bases also proved to be more resilient than expected, with companies finding innovative ways to cushion their short-term finances such as raising equity finance against assets.
Finally, we were reminded that the markets instinctively crave a prosperous outcome in the long-term and are inclined to remain fundamentally optimistic, even if full economic revival is delayed further than they might have hoped. But there is no room for complacency, not all organizations have survived. The pursuit of resilience is vital for everyone in an uncertain world. It means having the vital tools to thrive in the face of adversity, to maintain confidence and encourage hope, whatever the future holds.