In a volatile year that saw many organizations furloughing workers or closing down their operations entirely, cautious signs of optimism are gradually beginning to appear as the world emerges from the challenges of the COVID-19 pandemic. BSI’s fourth annual Organizational Resilience Index Report found that despite a difficult 2020, business leaders’ perceptions of the resilience of their organizations has risen, and more than half of organizations in the UK, US, and China are expecting an improved financial performance in 2021, showing a cautious hopefulness amongst the business community.
The survey which underpins the report, conducted during the second half of 2020 via an online survey and telephone interviews with senior executives in more than 500 global organizations, found a shift in executive priorities over the past 12 months, proving that different times require agile, flexible and confident leadership to achieve business resilience.
Effective supplier management, improved business continuity planning, and increased community engagement all emerged as rising priorities for leaders. However, diversity, equality, and sustainability continue to remain high on the business agenda, despite the emergence of these other issues as a result of COVID-19.
With vaccinations becoming more available throughout the US and around the world, it’s imperative that business leaders ensure they remain future-ready as we enter the next phase of the COVID-19 recovery and operations begin to resume in what will become the “next normal.”
In order to remain resilient and meet the emerging priorities around effective supplier management, improved business continuity planning, and increased community engagement, business leaders need to assess and benchmark their performance around three core areas of organizational resilience: operational resilience, supply chain resilience, and information resilience.
A resilient organization has a full understanding of how it is run and the environment in which it operates. This includes identifying operational improvements across its products/services and processes in order to meet the needs of its clients over time, through to how an organization values its people and governs itself. It requires demonstrable evidence that the organization is not complacent and is always challenging itself to improve performance and grow sustainably.
Leadership needs to ensure it focuses on those areas that will have the most impact on organizational resilience. The key lesson for leaders is that visibility of their decision-making is critical to reassuring their key stakeholders who are negatively impacted by sudden disruptions. As the business world adapts to significant structural changes, such as increased remote working, business leaders must adapt their leadership styles to maintain their visibility, stakeholder engagement, and trust in their vision.
Now more than ever, and particularly amid COVID-19, organizations must be trusted to safeguard sensitive information. Research has found that there has been a significant increase in phishing attacks since the pandemic began, placing significant strains on many corporate IT security teams. In order to achieve information resilience, an organization must effectively manage its information – physical, digital, and intellectual property – throughout its lifecycle, from source to destruction. This requires the adoption of information security-minded practices that allow stakeholders to gather, store, access, and use information securely and effectively.
Supply Chain Resilience
Global supply chain upheaval has been evident for the past year as panic buying, hoarding, and cargo theft have reached all-time highs due to the pandemic, underlining the need for a resilient supply chain operation. Supply chain networks will only become more complex; therefore, the ability to quantify and mitigate supply chain risks throughout the procurement, manufacturing, transportation, and sales lifecycle is paramount. Organizations need to identify the critical risks to minimize disruption and help protect global operational, financial, and reputational exposures.
For business leaders, the experiences of 2020 set a benchmark for future adaptation in response to structural sector-wide challenges. The clear lessons are that while Horizon Scanning is vital, this does not remove the need for process flexibility and product adaptation. Progress, particularly technological, is rarely linear and advances occur in fits and starts. Resilient organizations recognize this and have strength in depth to adapt when their forecasts and plans are thrown into disarray. Governance of suppliers and accountability in such situations is critical, depending upon an effective evaluation and understanding of your supply chain and data assets. Organizational resilience is only ever as strong as your weakest link.
Successfully managing these three domains of organizational resilience: operational, information and supply chain resilience, isn’t just about staying in business post-pandemic; it’s about the bottom line too. The 2021 Organizational Resilience Index Report identifies a clear association between holistic organizational resilience and robust financial performance, with the organizations that reported a stronger financial performance having stronger perceptions of their own organizational resilience.
Organizations that are able to adapt and rapidly respond to disruptions by introducing and embedding new ways of operating are more likely to be in a stronger position to grow and prosper in the year ahead, demonstrating the value of embedding the right frameworks, systems, and processes.