Majority of Execs Report Lack of Business Resilience: 5 Ways to Build It
With the uncertainty in the world today, organizations need business resilience if they are to react, respond and survive (and thrive) through so many difficulties. But while 97% of business executives believe business resilience is important, only 47% believe their organization is resilient, according to a new poll by SAS.
Business resilience is important for companies, but it’s also critical to supply chains and to nations—and to employees who rely on their organizations’ for a livelihood.
There are ways to enhance business resilience though—and they’re both pragmatic and urgent.
Business Resilience and Risks
What is business resilience? It’s both simple and complicated—easy to understand and difficult to execute. Business resilience is essential for organizations to anticipate disruptions and quickly respond and adapt so they can ensure continuity of operations and safeguard their talent, their assets and their brand.
Substantive business resilience includes the ability to assess strengths and weaknesses, identify risks and have systems in place to both respond and recover. And business resilience is broad—including everything from plans for shifting work methods or suppliers to managing social media or protecting employees in a battered region.
In addition to the data about how many executives believe business resilience is important (97%), and how few believe their organization is resilient (47%), the new poll from SAS—spanning 12 countries and almost 2,500 executives—found only 36% believe their country’s economy is strong.
In addition, executives are concerned about a variety of factors from driving digital transformation (53%), inflation and economic challenges (52%), attraction and retention of talent (51%), sustainability practices ((51%), reaching customers across channels (50%), changes in customer demands (50%) and supply chain issues (49%).
Answers to the age-old question of “what keeps you awake at night,” certainly point to executives who must not be getting much sleep.
Enhancing Business Resilience
So how can companies build and sustain business resilience?
#1 - Plan on Disruption
First, businesses leaders can plan on disruption. The days of wondering if challenges might occur are gone, and for most organizations, it is not a question of if, but when, disruption will intrude on their company.
Geopolitical risk is expanding, based on the world uncertainty index. In addition, cyber breaches are on the rise and natural disasters are increasing as well. Based on the multiple sources of uncertainty and the increasing likelihood of risks—planning on the need to react and respond is wise.
Executives are aware of the increasing requirements. In fact, according to the SAS study, 81% of executives felt the need for business resilience was greater than it was even as recently as 2020. They believed when they increase business resilience, they will in turn ensure organizational performance (89% of execs) and technology functionality (88%). They also believed business resilience will reduce the impact of crises (88%) and increase market share by adapting to market conditions (87%).
At its best, business resilience is not just about responding and surviving, but using challenges or shifts to thrive through the uncertainty a business faces.
#2 - Plan Around Scenarios
Business leaders are also wise to plan around potential crises. It is smart to intentionally consider eventualities which could affect the organization. Prior to the pandemic, the think tank, The Institute for the Future ran scenario planning workshops which trained participants in how to anticipate and respond to various crises. Those who considered and planned for a potential pandemic reported a greater ability to work through the situation when it actually occurred.
Organizations can look for signals by paying close attention to all kinds of news—scanning the landscape and assessing the context for potential signs about what could occur. And then assessing their own organizations for capabilities and culture which help ensure quick response.
The characteristics necessary for strong business resilience vary, but generally include speed and agility, curiosity and innovation, customer focus, backup systems, talent systems and superior data and intelligence related to all parts of the business and its markets.
In the SAS poll, respondents believed speed and agility were most important for business resilience, ahead of other factors such as curiosity, innovation, equity and responsibility or culture.
#3 - Plan for Eventualities
In order to ensure business resilience, data will be key—understanding what’s coming, how fast and with what ramifications—related to factors both outside and inside the business.
According to the SAS poll, business leaders should pay attention to these internal data sources: sales data, supply chain data, customer analytics, operational data, website analytics, social media data, inventory data, workforce data. And they should also pay attention to these external sources of data: consumer transaction data, industry-specific data, market research data, employment trends, public data, shipping data, government data.
Of course too much data is just overwhelming, so businesses need not just the skill of sensing (collecting and reviewing the data) but also the skill of sensemaking in which they bring form and meaning to the data—moving it from information to insights which can guide action. These skills include asking the right questions, synthesizing information and connecting dots in unexpected ways.
#4 - Plan With the Organization
All of this leads to the requirement that organizations ensure assessment plans, listening posts and contingency approaches are embedded throughout the organization. Every department must be ready to both react and interact.
When the cyber breach occurs, there will be the IT response as well as the HR response, the internal communication response, the security department response, the operations/supply chain response, the PR/media response and more. Or when the natural disaster occurs, every regional area impacted will need to respond in concert with central functions.
In addition, organizations will be more likely to respond with agility when their talent is also adaptable. Select people with great skill sets, develop them and provide purpose and meaningful work, engage them and motivate them, ensure strong leadership and provide the best of work experiences. These will contribute to a group of employees who can pull together effectively when things get especially tough.
Wise organizations are also able to create partnerships with external experts and others in the market and community—relying not just on their own perspectives, but checking with objective outsiders.
Being ready includes asking multiple parts of the organization to provide input about how to react and response and embedding policies and practices which will ensure they’ll be ready.
#5 - Plan Ahead
Organizations may also consider establishing regular workshops in which they involve employees and external experts in wondering about the future and sensing what might come. They can consider creating a team(s) focused on foresight—regularly researching what could come next for the organization—and practicing drills for all kinds of eventualities.
The automatic response in a crisis can be to freeze and take no action, or to decide too quickly, taking the wrong action. But when organizations anticipate and practice, they build the muscle of staying calm, quickly assessing data, creating insights and deciding on the best actions—and then monitoring and reassessing in order to ensure constant improvement as circumstances evolve.
A Promising Future
While the future is uncertain, it likely offers both peril and promise. After all, an unclear path may also be an opportunity for new innovations, a strong response and a positive impact.