CPA Practice Advisor

JUL 2018

Today's Technology for Tomorrow's Firm.

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16 JULY 2018 ■ www.CPAPracticeAdvisor.com THE SMALL BUSINESS CHANNEL Business Confidence Exceeds Crisis Preparedness By Isaac M. O'Bannon, Managing Editor According to Deloitte Global’s 2018 crisis management survey, nearly 60 percent of respondents believe that organizations face more crises today than they did 10 years ago, yet many may overestimate their capabilities to respond. “Today’s organizations face a global business environment with change happening quickly and crises on the rise,” said Rhoda Woo, managing director in Deloitte & Touche LLP’s Risk and Financial Advisory practice and leader of Deloitte’s crisis management practice for the U.S. firm. “But those who take a systematic approach to steering clear of crises and effectively managing ones that do arise, especially by engaging senior management and board members, can avoid the devastating impact a crisis can have on financial performance, employee morale, sales and reputation.” Confidence outstrips preparedness This study uncovered gaps between a company’s confidence it can respond to crises and its level of preparedness. The gap is more evident when evaluating whether organizations have conducted simulation exercises. Nearly 90 percent of respondents are confident in their organization’s ability to deal with a corporate scandal, yet only 17 percent of organizations have tested the assumption through simulation. Experienced a crisis before? Eighty percent of organizations worldwide have had to mobilize their crisis management teams at least once in the past two years. In particular, cyber and safety incidents have topped companies’ crises (46 and 45 percent, respectively). Following a crisis, nearly 90 percent of organizations have conducted reviews. The major insight from these examinations is that many potential crises may have been averted. Respondents identified the need to improve detection and early warning systems, invest more effort in prevention, and do more to identify potential crisis scenarios. Boards and business leaders must be crisis-ready When responding to a crisis, strong leadership skills and situational awareness are critical. The survey finds that 24 percent of respondents cite leadership and decision making as one of their greatest crisis management challenges. To help leaders be prepared, organizations should consider: organizing leaders ahead of time, clearly defining their various roles and responsibilities; training leaders in the tools and techniques that can help them through a crisis; identifying, improving and counterbalancing leadership tendencies and styles which, while they may serve as strengths in normal situations, could cause trouble in a crisis. “The survey results reinforce the need for senior leaders to take an objective and detailed look at their organizational approach to crisis management,” explained Deloitte Risk and Financial Advisory CEO Chuck Saia. “Today’s complex business environment requires a risk management program that’s agile, disciplined and proactive. Leveraging scenario planning like war-gaming and cognitive technologies like reputational sensing can strengthen crisis preparedness and protect reputation, one of an organization’s most valuable assets.” Board and senior management participation in crisis exercises is critical, as is their involvement in developing an organization’s crisis plan. More than 4 in 5 (84 percent) said their organizations have a crisis management plan in place, and those who enlist the board to participate say the number of crises has declined over the last decade (21 percent), compared to those without board involvement (2 percent). Continued online at www.CPAPracticeAdvisor.com/12418285 LATEST SMALL BUSINESS NEWS 5 Ways Diversity Can Boost Profits. There's an important distinction in definition between diversity and inclusion, and numerous studies and diversity advocates say one is not effective without the other. www.cpapracticeadvisor.com/12416935 Business Executives Expect Impact from Trade War. Forty percent of those surveyed said their business would be impacted by the imposition of U.S. tariffs or by potential retaliation from trading partners. www.cpapracticeadvisor.com/12416532 AICPA and Small Business Administration Form Alliance. The agreement with the SBA renews a previous collaboration between the two organizations that began in 2008. The AICPA and SBA have a shared goal of fostering conditions to help small businesses grow and thrive. www.cpapracticeadvisor.com/12418197 TaxSlayer Launches Small Business Suite with Payroll, HR and POS. Workful vows to work tirelessly to help small business owners get back to growing and owning their business. www.cpapracticeadvisor.com/12418219 5 Cautionary Tips for Young Entrepreneurs. As the college Class of 2018 ventures out into the working world, many of them will choose to work for themselves, or at least entertain the thought. www.cpapracticeadvisor.com/12416525 THIS MONTH'S TOP SMALL BUSINESS SOCIAL MEDIA POSTS ■ 8 Storm Preparedness Tips for Small Businesses. The Allstate Blog. https://al.st/2KpLjSX ■ Dos and Don'ts for Getting a Small Business Loan. Small Biz Trends. https://bit.ly/2K9Jnlj ■ 3 Ways to Increase Relevance and Avoid Extinction. Forbes Small Business. https://bit.ly/2Krl9Co ■ The Best Facebook Groups for Female Entrepreneurs. Gusto Blog. https://bit.ly/2MqrATF ■ How to Build Trust with Your Audience. Duct Tape Marketing Blog. https://bit.ly/2HMylfZ

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