How to succeed in unstable times and achieve business resilience
Since 2020, the entire world has faced great uncertainty, insecurity, fear and business risks as a result of a crisis that has not been recorded for generations. Resilience is crucial in these times because organizations that build and strengthen their business resilience gain a competitive edge and progress.
To survive in times of crisis, organizations mostly rely on their foundations. If the foundations are resilient, robust and strong, the organization can surely continue with its business and focus on progress and innovation.
6 pillars of business resilience help new-age organizations build their foundations:
- Organizational resilience – to build organizational resilience it is necessary to empower employees for effective work and cooperation under any circumstances and use new approaches to talent management, competence development, business flexibility and innovation. The culture and desired behaviors reinforce each other under carefully designed rules and standards, promoting at the same time quick and agile decision-making.
- Project resilience – resilient organizations maintain business models capable of adapting to material changes in demand, competitive environment, technology and legislation. This includes the implementation of a business continuity strategy which also applies to all projects involving the supply of products or services subject to predefined standards after and/or during a disruptive incident. A project resilience strategy also implies using agile methodologies and innovative approaches to projects to accelerate and effectively supervise the whole process.
- Technological resilience – business digitalization has become a standard for resilient organizations in all industries. Investing in a secure and flexible infrastructure, including cyberthreat management, implementation of software to accelerate business processes and take burden off employees, robotization and AI, are only some of the components of digital transformation. Resilient organizations implement major and minor IT projects with a high level of quality and over a short period of time to keep up with customer needs, competition and regulatory requirements. Technological allows organizations to quickly recover from a disaster and avoid customer and internal service interruptions.
- Operational resilience – operational resilience includes a set of activities to enhance risk management and business continuity based on a holistic strategic framework. Resilient organizations maintain robust production capacities that give them the flexibility needed to adapt to changes in demand and remain stable while facing operational challenges while maintaining the same level of quality.
- Financial resilience – to achieve financial resilience, the organization should focus on aligning its short-term and long-term financial objectives. A strong capital position allows organizations to overcome rapid drops in revenue, increased costs or credit challenges. The most important task of management is to ensure that the company remains liquid and profitable.
- Reputational resilience – resilient organizations align their values with their words and actions. Resilience requires a strong feeling of organizational essence, which is incorporated in the mission, values, principles and purpose and is implemented through activities, products supplied and services provided. The outward-facing image of the organization will also be reflected in relations with customers, partners, suppliers, public institutions and the media. It is therefore important to maintain strong relationships based on respect, flexible approach, open communication with stakeholders, and predicting and managing social expectations.
Organizations should strive to incorporate resilience in each aspect of business, in such a way that they become better and more competitive in normal times, not only when faced with unforeseen threats or changes.
How businesses can reinforce their business resilience pillars
Initially, each organization should examine the strength of each business resilience pillar and determine its required future degree and nature of resilience. It should identify such risks and gaps that mostly affect each resilience pillar and their overall interdependency. Such analysis should take into account any change that can affect the company internally or externally, industry-specific situations (e.g. changes in regulatory supervision arrangements), as well as any global situation (e.g. a pandemic or climate change) that may represent a major threat to the company.
The business strategy should be aligned with the resilience strategy, reinforcing weak pillars that carry most of the burden. Ongoing resilience requires incorporating resilience in any transformation undertaken by the company, irrespective of its primary objectives. Firms that are aware of the need for resilience in the future may make a significant impact on their business and their market position.
Author: Marina Meštrović, Business Solutions Consultant, TIS