The Importance of Business Resilience
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Why is it important to be Resilient?
With the business environment growing more dynamic and unpredictable, it is essential to be resilient in today’s world. There are several long-term forces that are stressing and stretching business systems, ranging from accelerated technological evolution to increased interconnectedness of the global economy to broader issues such as rising inequality and climate change. The result is that business systems are becoming increasingly stressed and stretched.
There is no greater illustration of system stress than the recent Covid-19 pandemic outbreak, which resulted in extended global supply chains coming to a grinding halt; significant amounts of economic activity being interrupted, resulting in increased inequality and social conflicts.
It is consequently necessary to do more than simply graft new concepts or technologies onto existing processes in order to manage for resilience. Changing the way we think about business will necessitate a completely different mental model – one that recognises and welcomes complexity, ambiguity, interconnection and systems thinking, as well as a multi-timescale viewpoint.
Of course, many businesses already engage in some type of risk management, but this is often done to better understand and reduce exposure to certain, well-known risks.
Resilience must take into account both identified and unknown risks, as well as the adjustments and transformations that an organisation must go through in order to absorb environmental stress and even convert it to its benefit.
How to build Business Resilience
Business resilience involves financial, operational, strategic, and psychological elements. To this end the financial, operation and strategic elements have been managed by most organisation, however the psychological element is hardly dealt with.
To build and maintain resilience in your organisation, one need to focus on four things that will be key to your success:
1. Culture
Culture is the personality of the company, that can help or hinder your success. A strong company culture is a competitive advantage.The first step will be to revisit the pillars of your culture: your mission, values, and vision. This can include validating these, communicating these and getting buy-in from employees and agreeing upon accountability. Followed by ensuring alignment between the company strategy and culture.
2. Leadership
Culture and leadership are inextricably bound together, so it’s important to pay close attention to leadership at all levels of the organisation. Leaders can’t fully predict the impact of the crisis on their teams, therefore they need to stay nimble and attuned to the challenging circumstances, changes, and uncertainty that will still be with us for the foreseeable future. Organisations can’t have a successful business if their employees aren’t supported, so leaders need to develop and incorporate a strong sense of caring and commitment to employee well-being.
3. Change
Before you can enact positive change, you must determine exactly what change is needed in your business and how fast you need to accomplish it. Once you have defined your current state and where you want to get to, you can begin to map the change processes to be implemented. This includes ensuring there is a jointly developed plan (strategies and policies) to mitigate the risks with buy-in from the organisation; with the right people at the right place with ongoing support including recognition and reward. The plan should involve four key components: adaptation, securities, continuity and recovery.
4. Discipline
Organisations should focus and pursue their goals including paying attention to the tools, processes, and financial resources that protect your business from threats and challenges. This includes having a formal risk-management plan in place that evaluates the economic risks to the company.
