obody likes it when regulation slows progress, least of all innovators and entrepreneurs. I know. I’ve spent the past 26 years regulating and supervising financial institutions. Today, I’m a Financial Sector Supervision Advisor to the International Monetary Fund. Governments, banks and—critically—those who trust their banks rely on the work that we do to safegaurd financial systems. So, when new technologies like crypto-assets and AI make a big splash across the industry, we take note of the impact they will likely have.

Crypto-assets offer many efficiencies, but without regulation its almost anonymous nature poses a big threat of illicit use and money laundering. Artificial intelligence has the potential to streamline customer interactions and analyze data in ways that are helpful to banks and to customers; but left unregulated, it opens the door to cybersecurity risks, learned discriminatory biases, and homogenized market trends—where consumer preferences and developer responses lead to less diverse, more standardized products and services.   

Put it this way; financial sector regulation and supervision support the critical role of institutions in financial intermediation, and must stand firmly as a strong defense, mitigating risks that would jeopardize our confidence in these systems. If something could go wrong, then there better be a net in place to mitigate its likelihood or minimize its impact. And we do this through regulatory oversight. A big part of that work relies on buy-in. If the prevailing attitude reflects distaste for regulators mitigating the Wild West of AI and crypto, then regulation will always be an enemy. Let’s shift the focus. Innovation without risk mitigation can lead to vulnerability and failure. Regulation and supervision are the lines of defense against financial stability risk.

hen the first class of Financial Management Association students graduated in 2015, I wasn’t entirely sure what we had built. I knew the students had talent and drive, but there was no roadmap—just a belief that if we gave them the tools and put them in the right environment, they could go toe-to-toe with anyone. That belief still shapes how I think about student preparation. Academic instruction is only part of it. The real impact comes from building a culture that expects and supports more.

What matters most is whether the students’ experience is evolving and whether we’re building something that’s not just excellent, but sustainable. And the best part? The students are thinking about that too. A shared sense of ownership is where everything starts. As students begin to take responsibility for the program and their own development, showing them what’s possible becomes just as important, whether through exposure to alumni who’ve built meaningful careers or through experiential opportunities that let them achieve something real. After that, you just need to put them in the ring and trust them. Students shouldn’t just hear about success. They should feel what it’s like to navigate it, work for it, and earn it. That’s the shift I look for: when they stop wondering if they belong and start asking what’s next.

Growth doesn’t happen in comfort, and that’s where culture becomes everything. The environment has to allow, even expect, students to fail, reflect, recover, and return better. That process is hard, and it should be. But when they get through it, they’re not just prepared for the next role; they’re prepared for whatever comes after it. And when that mindset takes root, something powerful happens: students start reaching back and asking how they can help those who come after them. They become mentors and begin to see their success not as a finish line but as something to share. That culture of interconnected success has been one of the most inspiring outcomes of this work.

In the end, it’s not placement statistics or competition wins that mean the most. It’s watching a student walk out the door believing, “I built something. I changed something. I pushed myself, and then I gave back.”

hen we—individuals or organizations—confront a sudden disruption, our first reaction is usually to fall back on familiar. It’s called the adaptability paradox. Precisely when we need to lean into change and come up with something new, we fall back on the familiar.

If you count Neanderthals, we’ve been at this evolution, adaptation thing for more than a few thousand years, and over those centuries, we’ve been pretty successful. But we’ve kinda been dragged into it. Yes, we’ve come a long way from the prehistoric cave, but our brains haven’t. Our primitive brain—the amygdala and the limbic system—is unthinkingly reactive. The prefrontal cortex is where we reason and learn; but not only is our primitive brain faster than our thinking brain, it uses less energy. MRI scans tell us that when the amygdala is in action, only a small part of the brain is working, about the size of an apricot. When we’re reasoning or learning, it’s the prefrontal cortex. About half the brain is operating. Thinking is a whole lot more work than reacting, and altering habitual behavior is the brain’s equivalent of hard labor.

The brain can be re-wired, but it takes some effort. The first time you drive to work, you have to actively think about where you’re going. The hundredth time you do it, you’re on auto pilot. To get out of a pattern of behavior and response, to adapt, you’ve got to create a new pattern. In other words, train and prepare.

In the last few years we’ve seen a global pandemic, a tangled mess of supply chains, a whiplash-inducing labor market, not to mention natural disasters, a generative AI explosion, inflation cycles and geopolitical instability, all of which reshuffle markets overnight. When markets and conditions change, firms must re-evaluate their strategic positions and adapt their business model to keep pace. Adaptability and its partner, resilience, are no longer “nice to have.” They’re drivers of performance. And mandatory. A recent McKinsey report says that companies ranked in the top 25 percent for organizational adaptability were 2.4 times more likely to outperform their peers financially across a ten-year horizon. Ten years, that’s money. That’s growth and shareholder value.

Even Wall Street has started to price this stuff into evaluations. Corporate ratings now include indicators of resilience and adaptability—scenario planning, crisis readiness and workforce agility. It seems investors want to know that when the next major disruption arrives, a business is prepared, can rebound, adapt and thrive.

So, how do you prepare your firm for resilience and adaptability? We learned a lot during Covid. Business loves stability and during those stable, before-times, many companies relied on global supply chains to provide the cheapest products “just-in-time.” With structured business models, they leaned out and focused their production, looked for and locked in efficiencies, prioritized operations over R&D, and trimmed every ounce of fat out of the system.

And then the pandemic.

The flow of global goods dried up; thin inventories disappeared, labor and customers stayed home and firms struggled to innovate and pivot. With little or no slack in the system, many companies just didn’t make it. Resilience is the firm’s ability to absorb a shock and keep going. That means you can’t trim all the fat. If you do, you won’t be prepared for the lean times. That preparation means protecting and maintaining cash flow and cash reserves. If your customers are defecting or just staying home, you’ll need to find new ways to reach them and that may take some time. Cash on hand or a loyal, repeat customer base may buy you that time. An alternative to your primary supply chain may help keep things operating if a ship runs aground in some far-flung canal. Resilience preparation has a lot to do with a careful analysis of your vulnerabilities. Once you make that analysis, it’s a risk, return question. Redundancies, backups, buffers, cost money; but they’re a lot cheaper than a catastrophic shutdown.

Adaptation preparation? Now there’s an irony. How do you prepare for something you’ve never seen before? That preparation doesn’t happen overnight. You build it, bit by bit, over time. It’s the organizational equivalent of doing your cardio, your pushups and stretches every day. That’s not flashy, but when you need the speed, the strength and the flexibility, you’ve got it.

Let’s go back to early 2020 for a second. Businesses large and small shut down. Some were able to pivot. Restaurants became delivery hubs. Breweries made hand sanitizer. Zoom became a verb. But the companies that survived weren’t just lucky. They had already built some degree of adaptability into their operating DNA. Recent research from McKinsey found that resilient organizations typically outperform peers by 20% during crises and rebound 50% faster post-crisis.

Organizations that recover fastest from disruptions have three traits in common: decentralized decision-making, technology-enabled workflows and cross-functional collaboration. These traits are part of the agile firm’s internal business model. What they do every day.

In a competitive marketplace speed is an advantage and friction is the enemy of speed. In traditional organizations, decisions crawl up the chain of command, get watered down in committees and often emerge too late to matter. In adaptive firms, decisions happen where the information lives—at the team level. If you flatten the decision structure, you reduce bureaucratic friction. The faster information moves the faster you adapt. Spotify is famous for its “squad” model—small, autonomous teams with end-to-end ownership. The structure sounds loose, but it’s highly disciplined: each squad owns a mission, KPIs and is empowered to act. That empowerment energizes. Team members don’t wait to be told what to do, they act.

There’s always a new technology, and we’ve been dealing with technological disruption since, like, forever. Stone Age, Iron Age, Industrial Age, Information Age. Each age changed available resources and processes. Today, that disruptive multiplier is AI; and like its predecessors, it will change the way we do business. Technology is a multiplier, and in each age, success came to those who learned the capabilities of the technology and worked with it hand-in-hand. AI is the next adaptive opportunity. It should not go unnoticed that upskilling is cheaper than rehiring.

There’s a caution here, a caution that comes with every new tech. Right now, AI is not fully integrated. Even those who use it successfully, profitably, don’t fully know its capabilities. It’s developing too quickly. Absent that knowledge we tend to use AI to do the same thing we’ve always done a little faster. That’s a better buggy whip, not a car. So, an investment in AI is R&D—a potential loss leader. That investment may not pay immediately, but it will lay the groundwork for future performance. If you don’t invest in your own future, you may be committing yourself to second place. Or worse.

Perhaps the most important component of adaptability is collaboration—collaboration across functional lines and collaboration up and down the firm’s hierarchy. It’s called teamwork. Individuals, teams who know how they fit into the larger whole—what’s expected of them and what they can expect, operate efficiently and leverage opportunity. Those who have been cross trained, or at least cross exposed, understand how the various business mechanisms work and can anticipate the next necessary thing. They work ahead of the problem. Again, not waiting, acting. Less drag, more opportunity.

When that collaboration extends up and down the corporate hierarchy, managers and directors, even CEOs get a keener understanding of the service priorities of their roles. It’s not about being the boss; but drawing the best out the team and actively seeking to anticipate what those teams need to operate, to develop and ultimately to excel. Those executives are not waiting to provide or decide, they’ve already done so.

So, what’s the takeaway here? Resilience and adaptability aren’t strategies. They’re capabilities. And like any capability, they can be built. But they require intention and preparation, a willingness to challenge assumptions and redraw boundaries. That might mean reskilling your workforce. Or flattening your org chart. Or investing in tech that doesn’t pay off right away but lays the groundwork for future flexibility.

To create adaptability, create and empower independent thinking. Unite the business around purpose and intent, not hierarchy. Step forward, lean into change. It’s a lot less painful than getting clobbered by it.

he tight-rope act that the U.S. economy’s performed over the last six months has presented a plethora of divergent indicators that have sown confusion, even among the most prescient economists. While a strong GDP rebound and solid consumer spending has provided the foundation for stability, the cooling labor market, persistent inflation and a struggling manufacturing sector have presented counterpoint challenges. The economic trajectory in the coming months will in all likelihood depend on the complex interplay of these competing forces and the policy decisions made in response to them.

If you’re a business owner, with no prevailing notion of how to make sound decisions for the foreseeable future, it’s likely you’re not sleeping as well as you perhaps should be, and cold comfort lies in the unifying theme that the rest of corporate America is more or less in the same boat.

The irony is that for a company to be resilient and adaptable in these economic times—it had to prepare to be, and a big part of the traditional foresight that good businesspeople maintain is a healthy, constant understanding of cashflow. Their business school DNA has taught them that cash to a company is like blood to a body—it needs to get where it’s going, when it needs to be there, or bad things start to happen.

When Auburn legend Bo Jackson went down playing for the NFL Raiders it was a serious injury, but it was only later that doctors discovered the bigger issue—his miniscule, after-thought blood vessels were no longer delivering to his powerful left hip. And no matter how epic it was, Bo’s athletic career was over in a blink.

Venerable U.S. retailer, W.T. Grant had an epic run of its own. Starting in 1907, it was a staple of the American economy for more than 50 years. In the 1960s an upstart competitor with a cool name, K-Mart, happened on the scene. W.T. Grant felt the rush of modernity passing it by and in response, began an aggressive and unchecked expansion, building hundreds of stores as fast as they could. W.T. Grant hemorrhaged cash. Unfortunately, many of the new stores were hurried, ill-planned and didn’t attract customers. Desperate to boost sales, W.T. Grant added insult to injury by offering very easy credit terms—to pretty much anybody who walked through their doors. When their new customers couldn’t afford to pay for what they’d purchased, the arterial accounts receivable flow that the company had relied on for generations trickled to a drip, and with not enough cash in the coffers, W.T. Grant became what was at the time, the second largest bankruptcy in U.S. history. The company survived a great depression and two world wars, but when they nicked a finger on cash flow, much like Bo, a great run was over.

Once the province of large corporations, Artificial Intelligence tools are now widely available. These tools significantly enhance budgeting and cash flow forecasting and management by leveraging machine learning to analyze large datasets, identify hidden patterns and improve accuracy beyond traditional methods. The algorithms can sort through historical financial data, market trends, economic shifts and even weather patterns, and generate more precise forecasts than human analysis alone. Moreover, integrating AI with Enterprise Resource Planning systems can generate a real-time look at a company’s cash position which shortens reaction time and promotes agile financial management. Generative AI and predictive analytics can play out hundreds of scenarios from best-case to worst, assess potential impacts on cash flow and help a business prepare for different possible outcomes. With a centralized dynamic model, a company can now synthesize live data from all operational parts of the business—AR, AP, sales pipeline, billing and subscription platforms, payroll, tax payments and benefit expenses—which enables faster, more accurate decisions that lead to less risk, greater profits and a company with a strong and steady pulse.

Inventory control can affect cash-on-hand, and traditional, conventional thinking may no longer be fiscally healthy. Pre-Covid, just in time (JIT) inventory, was a cornerstone of modern lean manufacturing, but under stress, it created high levels of supply chain risk. Resilient companies adapt, make adjustments, look beyond a surface view of their supply chains, to fully understand the matrix of their suppliers’ suppliers, and keep the inventory necessary to keep processes uninterrupted.

Then there’s the operational POV of cash flow seen through the nuts and bolts of how a company creates and delivers its products or services. Mark Clark, a clinical professor in the department of supply chain management in the Harbert College of Business, has seen the hard lessons learned from the pandemic. “Manufacturing without diverse suppliers is risky in the best of time, but when things are shaky, backup matters. If you’re manufacturing vitamins made of five components being shipped from five different countries, and one of them suddenly has an issue or their costs skyrockets for some reason—if you haven’t planned for that contingency, it doesn’t matter that the other four components are ready to go, without the fifth you don’t have a vitamin you can sell. No product, no sales, bad cash flow.”

The last few years may have taught us some hard lessons about supply chain risk, but what about risk on the consumer side? In an uncertain economy—whether it’s born out of a pandemic, government policies, climate change or military conflict—your risks on the customer side regarding quality, price and service are significant and multifaceted. If customers are forced to tighten belts, they become more cautious with their spending, their expectations and behaviors shift—and new challenges arise for your business.

The most immediate and apparent of which lies in pricing as customers under budgetary constraints become more price-sensitive and discerning in their purchases, comparing costs, chasing discounts and delaying non-essential purchases. All of which leads to pressure on your profit margins and potential decisions about offering promotions or even lowering prices to remain competitive. You can also expect your customers to more closely scrutinize your value proposition, feel a greater need to justify the price they pay for the quality, features and benefits they receive. And if they perceive a disconnect, it’s possible they could switch to a lower-cost alternative or generic brand. Customers may adopt a “good enough” mentality, become more willing to accept a lower-quality product or service if the price is significantly lower, as the desire for durability and premium features getting overshadowed by the immediate need for savings. B2B and B2C environments aren’t exempt either, where you may find customers likely to want to negotiate price or payment terms.

If you’re in a service industry the risks are perhaps less tangible but heightened nonetheless—and also provide the key to making sure your customers stay your customers. When money’s tight consumers can be less forgiving, and a single negative service experience can be enough to drive customers to a competitor. Especially in the age of social media, a poor service experience can be amplified quickly, deterring a great number of potential customers who are already hesitant to spend. Brand loyalty can become more tenuous, ironically just as your business may be facing cuts in customer support staff, training or technology. This can result in longer wait times, less effective problem resolution and an even greater decline in overall customer satisfaction. And the party favor of all that—a hard to miss dip in the amount of cash coming in the door.

But interestingly, companies who pride themselves on providing great service and exceptional quality, are the same companies that survive and even thrive when the going gets tough. Meeting and exceeding customer expectations when it’s difficult to do so, creates a noticeable differentiation in the market from companies that don’t or won’t. Smart, client-centric companies also know that it doesn’t necessarily take larger budgets or more complex systems to make their customers feel understood, it takes the human part—time, effort and the ability to listen. If you can show that you understand, yes even care about, the situation your customers are in and do your level best to meet their needs, chances are you’ll be remembered and rewarded in the brighter days ahead.

So as distracting and difficult as global dynamics can be for corporate management, if you create a culture of resourcefulness, adaptability and customer service, even as you build in the mechanics to adjust systems and work well with partners as situations evolve—then the one thing you likely won’t have to worry about is cash flow, the lifeblood that keeps you in the game.

Toyota took the time to thoroughly map its supply chains, forecast lead times sometimes down to the minute and identify where the chains were most vulnerable. They are not customers to their suppliers; they are partners.

“Most think that supply chains are linear, but they’re not, they’re messy and complex,” says Jen Blackhurst, Harbert Professor of Supply Chain Management. “I was working with a heavy equipment manufacturer and when the tsunami hit Japan, they immediately got in touch with their supplier and breathed a sigh of relief. All okay. But it wasn’t. Their immediate supplier was unharmed, but that supplier’s supplier was in trouble and that collapsed the supply chain. To mitigate risk, you’ve got to map your supply chains and not just the tier one suppliers, but their suppliers and their suppliers. You may not be able to stop the disruption, but you can be better prepared for the risk.”

Toyota learned a lot from that same tsunami. A plant that furnished critical microcontrollers was damaged. Toyota helped rebuild the plant and learned about the fragility of the manufacturing process. Accordingly, they adjusted their estimate of lead time and revised the amount of inventory they carried, building a safety stock that takes risk into account. That strategic approach gave them a competitive edge ten years before most other automakers.