Countering Volatility with Vision

During the second quarter of 2025, one word – volatility – seems to be top of mind across the global capital markets, businesses of all types, and even individual households. While the potential impact of recently imposed tariffs is one source of volatility, other contributing factors include possible changes in tax and regulatory policies, the direction of interest rates, and the health of the U.S. economy in general.

I’d suggest that, for the owners and managers of many small-to-midsized businesses, the antidote to volatility may be another word that starts with “V” – vision. If company leaders have the vision to look beyond today’s conditions, to understand how to fortify their operations and finances against volatility, they can position their businesses to thrive in the future.

Our economy has rebounded from many past periods of challenge and uncertainty, including the collapse of the dot-com bubble, the Great Financial Crisis, and the COVID-19 pandemic, to name a few. In fact, many successful enterprises got their start during past periods of volatility, including Disney (the 1929 stock market crash and ensuing Great Depression), Microsoft (the 1970’s recession), and Netflix (the 1997 dot-com bubble).

Throughout history, companies have managed through uncertain times because their leaders possessed vision – to see possibilities, double down on their strengths, pivot to adaptive business models, and seize opportunities that were unavailable to less robust, resilient and innovative competitors.

I believe there are a number of actions company leaders can take to realize their vision and overcome volatility.

Strengthen the balance sheet and enhance liquidity. Optimizing your financial capacity will help make the business less vulnerable to uncertain markets, rising costs, and shifting customer demands. Managers should assess whether their existing credit facilities are adequate for a range of eventualities. They also may want to engage with their lenders to try and obtain broader credit terms or more flexible loan covenants, perhaps by moving more of their business to their primary bank. OceanFirst’s actions during the pandemic illustrate this approach; we made the decision early in 2020 to issue $181 million in subordinated debt and perpetual stock, enhancing our capital base and liquidity. The additional capital and liquidity allowed the Bank to aggressively support our clients at a time of great uncertainty.

Build on your competitive strengths. I could cite any number of OceanFirst customers that may not be the largest players in their markets but have unique competitive strengths. Perhaps your company’s “superpower” is a robust supply chain, cost-efficient manufacturing platform, or exceptional customer service. Think about how to make that distinction work for you in a volatile environment. For example, I know one company that sold construction materials and was able to leverage its especially strong customer relationships by expanding into more finished products at a time when its competitors were dropping out of the market.

Invest in growth. Although companies may be tempted to delay some projects during periods of uncertainty, it may be time to consider selected investments to help the business become more efficient, or support future growth, such as adding talent or upgrading technology. Of course, it’s important to base any investment decisions on a solid ROI analysis. Again, using OceanFirst as an example, we recently invested in adding more than 40 experienced bankers, as well as selected acquisitions of complementary businesses that have the potential to contribute to profitable growth in the coming years.

Experience in prior periods of uncertainty has clearly shown the value of blocking out the “noise” associated with an uncertain economic environment – and of overcoming volatility by pursuing a clear vision of resilience and growth.