In general terms, financial health projects encompass a wide range of initiatives that include optimizing logistical aspects, strengthening the foundations of the business model, and other actions with a direct impact on the company’s economic activity.
In contrast, strategic planning projects address a range of factors more related to growth in all its dimensions, and these are the ones we carry out most frequently during the rest of the year.
However, we have observed an interesting trend when reviewing the distribution of projects on different dates:
In times of greatest uncertainty, strategic planning processes take a back seat and financial health projects are prioritized.
The impact of uncertainty
Based on our analysts’ project reports, the paradigmatic example of this correlation can be seen in May 2020.
The pandemic led to widespread closures, staff reductions, and significant stock market volatility. We recall a sudden shift in strategic priorities, whereby strategic planning projects were urgently sidelined and companies concentrated their resources on ensuring financial stability.
This was not an isolated case. With the outbreak of war in Ukraine in 2022, a significant portion of business intelligence production in Europe shifted its focus to improving companies’ operational efficiency, at the expense of strategic planning.
This trend was repeated in the US during the midterm elections in November, and in the lead-up to several electoral processes in Latin American countries.
The correlation is clear globally: when uncertainty increases, leaders choose to prioritize their company’s financial stability over business development initiatives.
This makes sense. From a risk mitigation perspective, investing in areas directly related to the company’s financial health fosters efficiency, resilience, and cost control. Conversely, strategy and planning projects are long-term investments, which are often more efficient when the economic environment is more stable.
What does this mean for your company?
Both strategic planning and financial health are crucial for a company’s growth and resilience. From this, we draw two important conclusions:
- It’s always a good time to invest in a company’s financial health. Ensuring it is essential, especially during periods of volatility.
- Working with specialized external advisors can be beneficial for advancing both strategic and financial initiatives. Their flexibility is key to responding effectively to shifting priorities brought about by instability.
Our experience demonstrates that Gain’s agile consulting model has been crucial in enabling us to adapt efficiently to any market disruption. For both your company’s planning and financial health, we believe the future of consulting lies in providing adaptive yet specialized approaches that deliver immediate, informed responses to instability.
