When Your Cash Cows are not Fat Cows: Ways to Build Business Resilience in Turbulent Periods


Sunday, October 10, 2021 / 04:57PM /OpEd by Tosin Ige, Proshare Research / Header Image Credit: SSIR


According to the Boston Consulting Group (BCG) matrix, a business may be a cash cow or a dog depending on its performance on the market growth stage and market share. A business represents a cash cow when it has become a market leader with low market growth. Conversely, a business symbolizes a dog when it has a low market share and a low market growth. Businesses that symbolises dogs can merely sustain themselves and provide limited cash flows. In an everyday context, when a business requires low maintenance and minimal investment capital but yet generates consistent cash flows, it is a cash cow. However, when the boom is absent and the cow is no longer fat, it becomes a dog. In the words of Noel Gallagher, "When you are the cash cow that lays the golden goose egg, people are always going to cheer you on, whatever."


The problem comes when the cows are not fat again. For every business that delivers goods and services to consumers, it must have faced one disruption or the other in recent times. For many businesses today, the current periods of turbulence in everything from uncertainty to soaring energy and commodity prices and to the exchange rates crisis are more extreme than anyone has known before. Many cash cow businesses have had to struggle for survival with many falling off track and others still battling for stability.


In periods of turbulence, there tends to be a dichotomy in responses across businesses and society to build resilience. Some businesses tend to retreat to familiar territory in a bid to enhance the predictability of the risks and opportunities. Others tend to reach out to embrace the change. The future belongs to businesses that ignore the pressure to revert to the status quo but instead choose to pursue sustainable values. Indeed, the best kind of intelligence is to understand what the market will think tomorrow not find out what it thought yesterday. The interest here is to provide a guide for such businesses that intend to build resilience in the current turbulent period. First, the discussion on resilience here implies the ability to absorb shocks, recover from disaster, and/or maintain business continuity. Whereas in the past, businesses developed strategies and created a step-by-step process to execute them, today businesses need a flexible approach that allows them to respond to the rapid pace of change, shocks, and disruption to business modules.


There are four major challenges businesses are currently facing. These challenges have in recent times exacerbate the turbulent situations in the Nigerian business environment.


The Nature of the Turbulence faced by Businesses


1.     Volatility

Businesses operating in a mono-product economy or an economy that depends mainly on oil face a volatility crisis. Oil price volatility exacerbates business cycles mainly through its effects on the national budget of such an economy. The national budget in Nigeria is anchored on projected crude oil prices per barrel. The volatility of crude oil prices impacts adversely on the budgetary process. Consequently, revenue and government expenditure are affected. Given the significance of government expenditure as the largest component of Nigeria's economy, oil price volatility triggers instability and uncertainty in government expenditure both capital and recurrent expenditures. This has unfavourable effect on the macroeconomic environment in Nigeria. In an ideal situation, favourable crude oil prices in terms of increase in oil prices should impacts positively on an economy exporting economy, while unfavourable crude oil prices in terms of decline in oil prices should adversely affect the budget implementation of the economy. However, in Nigeria with consistent negative net oil revenue due to the nation's high dependency on oil export revenue and at the same time dependent on refined oil import, volatility in oil price invariably feed disruptions in different components of the country's GDP such as private consumption, private investment, and the balance of trade. Volatility in a precarious mono-product economy also tends to limit the capacity of an economy from embracing growth and development in other viable sectors. In essence, budget implementation and economic divestment in an oil-dependent economy are subject to crude oil volatility. This impacts the ability to provide an enabling environment for businesses to thrive. Nigeria's economy driven by the exportation of crude oil and importation of refined oil is susceptible to crude oil volatility.  


2.    Uncertainty

One of the major uncertainty the global business environment is currently battling with is the spread and the emergence of new variants of the Coronavirus (COVID-19). COVID-19 is causing severe disruption to businesses and the supply chain in Nigeria and globally. While the rapid spread of the virus was creating a health crisis for the world and vaccines are being developed to combat the challenge, the re-emergence of new variants which seems a bit too strong for the current vaccines means the world is dealing with a deadlier situation than it appears. In addition to the health challenges, businesses and commercial activities globally have been squeezed to their limits. As the viruses know no limits, the impacts may continue to spread with their devastating effect as observed in India. Bloomberg reported in August 2021 that about two-thirds of Indians were exposed to the COVID-19 with large disruption in economic activities and loss of lives (Indiatimes, 2021). Accordingly, 94 percent of the Fortune 1000 across the globe and businesses in Nigeria have been impacted and are still counting their losses from the COVID-19. While the optimistic view is that COVID-19 uncertainty will eventually fade, as the Ebola, Zika, and severe acute respiratory syndrome (SARS) viruses have done in recent years, the social-economic impact may be felt over a long time. Currently, some regions are threatened by a fourth wave of the pandemic, coming just after some had a breeder from the third wave of the pandemic. Hence, businesses in Nigeria and elsewhere remain susceptible to the pandemic and its attendant restrictive measures.


3.    Complexity

Many business owners consider the current global complexity as a major 21st-century challenge to businesses. Business complexities pose emerging difficulty for businesses due to the expansion in global markets, technology advances that increase the run for commerce, access to highly specialized skills to develop and deliver products and services, a greater supply of stakeholders with divergent interests, and interconnectivity of the supply chain. Managing or coping with business complexity is a major threat to contemporary businesses. According to Amann, Nedopil, and Steger (2011), today's business managers must cope with business complexities such as the interdependence of internal and external factors; local versus global operations; diversity of people and cultures including employees, customers, stockholders, and other stakeholders; information ambiguity which requires decision-making with less clarity and more uncertainty; and a fast-flux, fast-paced and dynamically changing environment.


An instance of the threat to the supply chain created by the complexity of businesses is the energy crisis the world is currently battling with. British gasoline stations running dry, surging power costs in the European Union ahead of winter, forced restrictions on energy use in China and rising oil, as well as soaring natural gas and coal prices are some of the major energy crises the world is currently battling with. Two factors unite these crises. First, the different crises across regions are slamming consumers and disrupting businesses. Also, they were triggered by the disruptions in the dynamic global supply chain caused by failed policy responses to the global health pandemic.


With many businesses being unable to trace all of their suppliers in the highly interconnected world, it is becoming more difficult to predict the impact of shortages and outages on business performance. The business world may not recover to normal demand patterns and channels as countries continue to quarantine and curtail global mobility.


4.    Ambiguity

As observed by Dani Rodrik (2020), three trends will shape the world economy in the post-COVID-19 era. First, we will see a rebalancing of the relationship between markets and the state, with a much stronger role for governments and public regulation. Second, there will be a parallel rebalancing away from hyper-globalization and towards greater national sovereignty and autonomy. Third, we will be transitioning into an era with lower economic growth potential, in which political leaders and their publics will need to scale down their growth ambitions. The outlook for the global economy is currently ambiguous. Attention in some quarters is shifting from the hyper-globalization and multilateral trade agreement drive towards a more nationalist interest. This is particularly evident in China, US, and Britain.


According to the DailyTrust newspaper, the former DG of WTO, Roberto Azevedo, cited the lack of progress at the WTO as his primary reason for resigning from the organization a year before his tenure was scheduled to end. The current DG of WTO, Okonjo Iweala, was rumored to be mulling a walk away from her position. Inside sources have revealed that WTO is currently facing deep division, rigid negotiating structure, and disparate interests which are precluding the organization from delivering or finalizing any multilateral deal. Nonetheless, Africa as a continent is drawing its implementation strategies for a multilateral African Continental Free Trade Area (AfCFTA). The AfCFTA is expected to eliminate or reduce tariff and non-tariff barriers amongst the 54 African countries to create a single continental market for goods and services, with free movement of businesspersons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African customs union.


While de-globalisation, decoupling, supply-chain repatriation, reducing dependence on foreign supplies, and prioritizing domestic production and finance have become recurring themes in some segments, economic integration seems to dominate discussions in some other segments. Therefore, the outlook for the global economy seems too ambiguous to predict for business decisions.

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Dimensions of Resilience


The world is facing serious disruption and business risk that may not have been experienced before. Some businesses have frozen and failed while others have innovated, advanced, and are currently thriving. The difference is marked by resilience. One factor that keeps companies such as Nestlé, Mars, General Motors, and Exxon Mobil thriving despite their long history with experiences of different crises is their resilience.  Nauck et al (2021) highlighted different dimensions of resilience that businesses need to build to survive the current turbulent times.

  • Institutional Resilience

Institutional resilience involves the capacity to deliver and enhance results credibly, legitimately, and adaptively; as well as the ability to manage shocks and changes to human, social, and environmental interaction. Life beyond the COVID-19 pandemic and the current macroeconomic turbulence poses an array of risks to businesses.  According to a recent survey by Mckinsey, the COVID-19 crisis has accelerated operational changes and stronger collaboration between directors and management that are key to building resilience. Resilient business tend to focus on specific external risks and organizational issues. Priority are placed on hedging against geopolitical and macroeconomic risks, political risks, and climate-related risks.


The world is undergoing rapid, random, and unique change. Digital and technological revolution, climate change, and geopolitical uncertainty will all play major roles. But across industries, most businesses have remained persistently focused on near-term earnings, typically assuming ongoing smooth business conditions. The COVID-19 pandemic heralded the need for a new approach. Crisis of all sorts may grow more frequently but less predictable. In a world where the future is uncertain and change is rapid, businesses need to look beyond short-term performance and basic business health. They must be able, not only to withstand unpredictable threats or change; but to emerge stronger. Businesses cannot afford to be rigid or imprudent. Businesses reluctant to take enough risk will not be able to respond or innovate to meet changing circumstances. At the same time, businesses too focused on financials or business growth may take on a risk strong enough to kill their long-term achievement. A resilient business must find a balancing point between taking a risk and exercising caution to fit into the changing business environment.

  • Financial Resilience

Financial resilience is the ability to withstand life events that impact one's income and/or assets. The big blow of any crisis, major or minor, business-specific or economy-wide, is its constraining effect on the financial position of businesses. The strategic standpoint for businesses to build resilience is to balance short- and longer-term financial aims. A solid capital position and sufficient liquidity help businesses to weather any rapid drop in revenue, increase in cost, dip in prices, or credit issues. One element of financial resilience is to protect against the deterioration of markets and reduced access to capital, debt, or equity or, for financial institutions, decreases in net interest income, and credit loss.

  • Operational Resilience

Operational resilience is the initiatives that expand business continuity management programs to focus on the impacts, connected risk appetite, and tolerance levels for disruption of product or service delivery to internal and external stakeholders such as owners, employees, customers, partners, and the community. Operational resilience requires a business to build a production framework that can flex to meet changes in demand and remain stable in the face of operational disruption without sacrificing quality. A business that intends to build operational resilience must fortify its supply chains and delivery mechanisms to maintain operational capacity and the provision of goods and services to customers, even under the stress of all forms ranging from failures of suppliers or distributors to natural catastrophes and geopolitical events.

  • Technological Resilience

Technology resilience is the ability to maintain acceptable service levels through and beyond, severe disruptions to critical business processes, and the information and technology systems which support them. To build resilience is to invest in strong, secure, and flexible infrastructure, including managing cyber threats and avoiding technology breakdown. The business must maintain and make use of high-quality data in a way that respects privacy, avoid bias, and comply with all regulatory requirements. In essence, with the continuous advancement in technology, businesses that intend to build technological resilience must implement small- and large-scale ICT facilities at a high quality, on time, within budget, and without breakdown to keep pace with customer needs, competitive demands, and regulatory requirements.

  • Organizational Resilience

Organizational Resilience is the ability of an organization to anticipate, prepare, respond, and adapt to incremental changes and/or sudden disruptions within an organisation to survive and thrive. To build resilience within an organisation, the organisation must foster a diverse workforce in which everyone has a sense of belongings and can perform optimally. The business must deliberately recruit the best talents, develop that talent equitably, upskill or reskill employees flexibly and fast, implement strong workforce processes that are free of bias, and maintain robust succession plans all through the organization. The culture and desired behaviors must be mutually reinforcing, supported by thoughtfully developed rules and standards to which adherence is enforced while promoting quick and agile decisions.

  • Reputational Resilience

Reputational resilience is the ability to respond to or recover from reputational jolts a business face. Sensing, assessing, and proactively planning for reputational crises enable businesses to respond effectively and recover from reputational quakes. A business that intends to build resilience must align its values, with actions and words. Across the globe, many stakeholders, from employees to customers to regulators to investors to society at large, are increasingly looking to hold businesses accountable on environmental, social, and governance (ESG) issues. Resilience demands a strong sense of well thought out mission, values, and purpose which must guide actions. It also requires flexibility and openness in listening to and communicating with stakeholders, anticipating, and addressing expectations, and leveraging criticism for growth.

  • Business Model

Ultimately, a business that will build or maintain resilience must create business models that can adapt to significant shifts in customer demand, competitive landscape, technological changes, supply chain network, energy source, and regulatory framework. This could involve mainstreaming innovation and valuing entrepreneurship. Particularly during turbulent periods, a business that intends to build resilience must place strategic bets to evolve its business models in line with current trends specific to the business and in alignment with macroeconomic trend.


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Activating an Action Plan

 To begin building resilience in the near term, three key steps are important for businesses:

1.    The starting point is for the business to describe how resilient or not it is today in terms of the various dimensions of resilience.

2.  Then, the business should invest in data and research to determine the degree and nature of resilience that is needed for the future based on the threats and opportunities observable or projected for the business. A business that has an idea of the resilience needed for the business can't design the requisite framework to build such resilience.

3. Lastly, the business should design an approach, based on the research findings, to build/implement and maintain the resilience required by the business. 

Notably, resilience is an internal feature, but the disciplines and strategies to support it may cover a wider scope.

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Final Thoughts


Businesses cannot predict or prepare for all disruptions accurately. The capability to respond promptly and effectively to disruptions can be a decisive determinant of business success. In the face of business-specific crises, a weak and indecisive response can trigger a significant loss in business prospects and values. On the flip side, prompt and sound responses yield strength and stability. Businesses that respond early to economic or industry downturns can create a competitive advantage to drives outstanding performance through to the next cycle.


Hence, it is possible to survive in turbulent times as long as the business chooses to respond effectively to new opportunities to create value. It is a process of testing and failing that gets successful businesses through challenges to greatness. However, while it is important to be flexible in business to adapt to emerging changes, caution must be exercised to avoid a precarious situation of pitching from one opportunity to another without deep thoughts. The effect could be devastating and irreversible. Deep thought in this instance could involve a big investment in data and research.


Overall, business leaders must combine attributes such as agility, being data-driven, staying true to purpose, creating platforms to adapt to any change, and looking more into the medium term to build resilience under the current uncertainty. Business leaders and managers with focus on short-term financials tend to cut out or underuse spare capacity, which undermines business response to opportunities and threats. On the other hand, businesses that focus on a long-term vision tend to be so far into the future that the vision dies a natural death.


John Maynard Keynes expressed it in simpler words, "In the long run, we are all dead". The convergence point is a medium-term framework that allows businesses to create a platform for adaptation and optimise the full capacity within the scope of the business vision.




1.      https://www.london.edu/think/li-five-lessons-for-leaders-in-turbulent-times

2.     Nauck, F., Pancaldi, L., Poppensieker, T. & White, O. (2021). The resilience imperative: Succeeding in uncertain times. Https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/the-resilience-imperative-succeeding-in-uncertain-times

3.     Amann, W., Nedopil, C., & Steger, U. (2011). The meta-challenge of complexity for global companies. Journal of Database Marketing & Customer Strategy Management, 18(3), 200-204.

4.     Rodrik, D. (2020). Contemporary Issues in African Trade and Trade Finance. CIAT, 6(1), 2-6.


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