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The business world is awash with buzzwords whose core meaning invariably becomes diluted and valueless the more they’re used. The word ‘resilience’ is in danger of becoming such a buzzword. Even before the world was plunged into the uncertainty caused by the global pandemic, the word ‘resilience’, when used in a business context, was in danger of becoming so ubiquitous as to begin to lose its value. Now that we’re all trying to make sense of the confusion caused by coronavirus, it really has become ubiquitous. A search of the term ‘business resilience’ plugged into a popular search engine brings back 138,000,000 results. When prefaced with word ‘coronavirus’ the result is 99,600,000.
‘A search of the term ‘business resilience’ brings back 138,000,000 results’
It’s clear to see why the word has become so prominent, but do we truly understand what it means for our businesses? Now more than ever, organisations need to develop the characteristics that allow them to be truly resilient, not just to cope with setbacks, but to thrive in their aftermath. In order to do that, we must use the word ‘resilience’ effectively, with a proper understanding of what it means.
First, we need to bear in mind that resilience isn’t a standalone concept. For instance, it’s often regarded as strength, an uncompromising defensive capability, or stoicism in the face of adversity. Whilst these are components of resilience, it’s much more than this alone. It’s a melding of behaviours, characteristics and processes that, combined, allow a business to prepare for crises, recover and ideally emerge stronger than before. Neither is resilience a fixed objective that can be achieved through box-ticking. Instead, it’s a scale on which an organisation is more or less resilient depending on how many of the component characteristics it effectively embeds in its culture. Each organisation being unique, the characteristics of resilience will vary, but some general rules apply to all types of business.
Resilience is a melding of behaviours, characteristics and processes that combined, allow a business to prepare for crises, recover and ideally emerge stronger than before’
Policy
Policy isn’t simply a document that sets out a business’s intention to be resilient, although this is certainly something that should be put down in black and white. No, policy also encapsulates the leadership and governance that should be the keystones of an organisation’s approach to leadership. It’s the senior leadership’s opportunity to lead by example, to set the tone for the rest of the organisation in its attitude to resilience. Leaders must make resilience part of the decision-making process and roles should be defined in order to drive it. Leaders must also instil an understanding that everyone is in this together and individual behaviours and actions help to improve or damage resilience. But it isn’t just about the bosses dictating to employees, it’s also about being open and transparent; about employees feeling a rapport with management and about decisions, actions and policy being communicated throughout.
Posture
Posture speaks to how the organisation positions itself so that it is best placed to deal with the unexpected, which includes unforeseen opportunities, not just events that have adverse impacts. Think of it as a driver preparing themselves for a long road trip. They will ensure that their seat is in a suitable position, the seatbelt is secured, mirrors are adjusted, supplies are to hand and breakdown cover is in place. A good posture for a business means that external relationships are positive, involve ongoing two-way communication and that they are factored into planning for the unforeseen. Just as important is the internal dialogue between management and employees on all aspects of the organisation’s approach to resilience. The ability to adapt quickly to change is also a vital component of an effective posture. Other practical elements include having healthy liquidity, or a ‘war chest’, so that any costs incurred in adjusting operations can be absorbed.
Predict
While no organisation has a crystal ball, it’s vital that we spend time and resources scanning the horizon for any pitfalls. It’s important to remember, though, that this isn’t only about being outward-looking, but also about looking within so that we’re ready for any internal changes that we may be forced to make, such as a change in personnel. This element of resilience also requires the business to factor these possible emerging threats, changes, or opportunities into strategic planning as comprehensively as possible. It goes without saying that this step requires threat and risk assessments to be carried out regularly. The resulting recommendations for preventative mitigation measures should be implemented in order to lessen the likelihood and/or impact of an event.
‘It’s vital that we spend time and resources scanning the horizon for any pitfalls’
Prevent
Should an organisation experience an adverse event, change or crisis then the preventative measures we talked about previously will mitigate the impact. This component of resilience can be regarded as the defensive line that stops the worst-case scenario from becoming a reality. It requires an effective risk management framework that is driven by a dedicated, qualified individual or team, that undertakes regular risk assessments and keeps a risk register up to date. It also means having the information, knowledge and contacts to hand that can be drawn upon to assist in preventing that worst-case scenario from manifesting. Having the ability to prevent adverse outcomes requires effective situational awareness in order to be able to act before a minor event becomes a crisis. This is distinct from horizon scanning in that it entails being fully aware of the here and now. Last but not least, an essential component of this area is your good old security management including physical and cyber measures.
Respond
When an event does occur that we can’t avoid, then an effective response is the difference between and organisation surviving or not. Each organisation will have its own Crisis Management Plan (CMP), defining its methodology for responding to a crisis and it’s important that these are tailored, flexible and not too prescriptive. It’s also crucial that the CMP is prepared by knowledgeable people when times are good and not cobbled together when the crisis is in mid flow. The reason for this is that the plan, and the roles and responsibilities contained in it must be known by all those responsible for executing it. Not only must these individuals know the plan, but they must practise it frequently through exercising.
Respond
As soon as the dust begins to settle, the organisation needs to start the recovery process. This is when a truly resilient organisation will emerge stronger and healthier than it was before. But as with the CMP, this recovery must be planned for in advance in the form of a Business Continuity Plan (BCP). Once again regular practising, testing, and exercising of a BCP framework is essential.
Businesses across the globe are struggling to varying degrees with the challenges thrown up by the current pandemic. Many will be scrambling to adapt and reactively mitigate against the threats they now face and just as many may have already succumbed due to an inability to adapt. Those organisations that committed from the top down to being more resilient, who established a strong but flexible stance in order to cope with adversity, and who dedicated resources to assessing potential future threats and to mitigating them will have coped far better in the face of relentless uncertainty and change. Because they put in place those foundations, they would also be much better placed to respond to and recover from current events as well as the next crisis, be it local or global. Those businesses would have understood the real meaning of resilience: that this isn’t just another corporate buzzword, but a truly effective concept to be valued in such chaotic times.
Look out for our next article on resilience detailing how this approach works in practice