Business Resilience: Finding Opportunity in Uncertainty
The COVID-19 pandemic ignited a renewed focus on business resilience. Some business leaders found this concept entirely new. Others who believed they had incident-proofed their companies through detailed continuity plans discovered the necessity of a more in-depth understanding. A holistic long-term strategy for adaptability can help businesses thrive during times of prolonged uncertainty.
Understanding business resilience
Business resilience is defined as an organization's ability to adapt to a changing environment in order to meet core objectives and thrive. Uncertainty, whether sudden or gradual, can bring both opportunities and threats. A resilient business anticipates and takes on these challenges using a framework of sound business practices and risk management. Although the terms business resilience and business continuity are often used interchangeably, it's crucial to know how these differ.
Business continuity planning is process-centric, revolving around incident proofing. It anticipates disruptions and makes preparations to ensure that the business can function if those disruptions happen. A robust business continuity plan requires an understanding of the environment in which your company operates to identify and prioritize potential risks and then plan for risk mitigation.
In contrast, business resilience is a more strategic undertaking. It stands on the framework of business continuity but extends further to help enhance an organization's ability to bounce back from challenges as quickly as possible. Business resilience, therefore, isn't just concerned with mere survival after an incident but also makes room for innovation and seizing new opportunities.
The difference becomes more prominent when change occurs. Continuity planning manages the now, but a resilient business has the flexibility to play the long game, too. To do so, the company draws upon its unique blend of strategic and operational factors, rather than a plan or process to adapt and thrive.
Gathering the key ingredients
There is no singular formula or path to resilience. However, organizations that succeed here tend to have key characteristics and capabilities. These include the following:
- A shared organizational vision and purpose
- Diversity of knowledge, experience, skills and leadership
- Sound governance and management practices
- Robust risk management practices
- Ability to withstand and adapt to change
- Effective collaboration across areas of management and technical expertise
Once these components are in place, how can companies become more adaptable in the face of change? A successful journey can take some time, but it begins with a thorough and honest examination of the company culture, practices and operations.
Ultimately, your company's resilience hinges upon your people. Learn what beliefs, values and behaviors define the internal culture. Identify which of these can foster creativity and flexibility. Resilience can be enhanced by the presence of a trusted and respected leader who has an open, change-friendly mindset. However, remember that an effective resilience strategy depends on the empowerment of staff at all levels to make decisions that protect and foster adaptability. Encourage the practice of sharing lessons learned about failures and successes.
Using data to uncover insights for a real-time decision
Make the use of accurate and timely data an integral part of your processes and day-to-day operations. Companies can typically find wins with low-hanging fruit, such as the automation of routine yet critical tasks and procedures, and then collecting the data from those efforts.
Cloud storage tools can be a simple way to ensure key operational data is readily accessible to management and other decision-makers. Look for ways to take advantage of the Internet of Things, using networkable devices and equipment. These measures can position your company to reap the additional data collection and efficiency-driving benefits from advanced technologies, such as robotic process automation, artificial intelligence and machine learning.
To better pinpoint risks and opportunities as they emerge, think about collecting data on a range of indicators outside your organization, too, including suppliers and even competitors facing difficulties that may be open to selling. Don't forget about tools—such as virtual conferencing, mobile connectivity apps and social media—that enable your company to reach out and get information from external stakeholders. This could include customer feedback, employee surveys and insights from relevant market analysts, as well as trade and professional organizations.
With the input of stakeholders, aim to set up the analytics, dashboards, report sets and data structures that can facilitate decision-making in as close to real time as possible. The more reliable the information, the stronger the foundation for actionable insights and good governance. This strengthens the potential for business resilience. So, consider investing in the technology, people and practices that can provide the best data possible.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.