There’s a very good chance that you’ve been talking about resilience in and around your business and there is a good reason why. In a 2016 survey, Control Risks explained business resilience as “an organization being able to identify, analyze, and implement planning to be better able to recover or ‘bounce back’ from disruptive events”.
Many business and managerial practices have proven that a focus on resilience is increasingly important to ‘bounce back from disruptive events’, such as a global pandemic. In this article we share insight on the following:
- What is resilience?
- How do you manage and measure it?
- How do you build a more resilient business?
What is resilience?
Business resilience can be defined as an organization’s ability to predict, plan, react, and adjust to changes and disruptions in the business environment. If a company can effectively develop its resilience, it can eventually secure its ability to accomplish its goals and objectives, regardless of the unpredictable events and changes taking place.
How do you manage and measure resilience?
Traditional management methods have some significant drawbacks that make it difficult to assess and achieve resilience:
- Many conventional companies have been designed to increase shareholder value from dividends and share value. Very few organizations really aim to calculate resilience beyond particular material threats.
- Companies and shareholders also concentrate on optimizing their short-term returns. However, resilience requires a multi-time perspective: to forgo a certain amount of productivity or success now for the sake of more sustained performance in the future.
- Businesses have focused primarily on designing and implementing stable strategies that perform well when the causal relationship is simple, predictable, and unchanging. Resilience deals with what is uncertain, changeable, unpredictable – which although can have serious implications.
Managing resilience requires more than just coming up with new ideas or resources to apply to today’s approaches. It needs a different business model – one that embraces complexity, uncertainty, interdependence, systems thinking, and a multi-time scale perspective.
How do you build a more resilient business?
There are 3 major areas through which resilience can be enhanced:
Leadership and strategy – Building a resilience vision starts with the identification and awareness of vulnerabilities and an overview of the possible effects of these vulnerabilities on the business.
Operations – Operational resilience can be improved by recognizing possible crises that might affect the business and rating these threats against the effect they will have and then implementing a risk reduction and management plan.
People – Employees and their expertise are essential to the organization’s resilience. Investing in the workforce is the only path forward. Ability levels, turnover of workers, work satisfaction, training, and learning opportunities should be closely controlled. Ensuring that people are involved in the change program, and keeping them motivated, will yield rewards for every business.
Let’s not forget, many businesses already take on some form of risk management but mostly to understand the effects of specific, known risks. Your business’s resilience should also be to deal with unknown risks, be able to adapt and change any external stress, and possibly turn it into an opportunity to succeed.