Adding resilience to your business

The last few years have reinforced this position with a multitude of black swan or high impact low probability events such as BREXIT, US Immigration policy, the pandemic, fuel and supply chain disruptions, and most recently the cost-of-living crisis.

This turbulence has fundamentally changed the decisions we make as businesses and consumers, how we interact with each other, and how we prioritise for the future.

This has highlighted the need for organisations to design more resilient strategies, and

We have identified four pillars to encapsulate this approach, but they require a shift in behaviours to align with the organisations purpose, require courage to challenge the status quo and may involve taking on a founder’s mentality.

1. Dynamic Strategy

Constrained by their sectors or cultures organisation have different approaches to strategic planning, however strategies typically take on short, medium and long term positions.

Demonstrably a five-year strategy leaves an organisation vulnerable to a multitude of factors which include changes in the external environment (PESTLE), with the pace of digital driven change and geopolitical factors, which can’t always be predicted in a timely fashion. These external factors inform internal changes in an organisations motivation and capacity to meet the challenges that are introduced.

A dynamic strategy is one which is malleable, with the appropriate levers embedded in it, to ensure that an organisation can meet these challenges and adapt to take advantage of them. A dynamic strategy is not a strategy that is refreshed over an elongated period, rather it is one which is agile whilst being true to the organisations purpose and vision.

2. How do you build structure around inherent risks and the emerging risk rhetoric?

Emerging risks are a talking point in every board room, and across every assurance function, but providing an enduring view of the operating landscape which is dynamic and reflective of your environment can be a challenge. Like the ripple effect when a pebble is thrown in a lake, risks (and opportunities) may reach our shores at different times and with different levels of magnitude, and it is important to reflect on both these short term risks and those further afield.

When you think about the emerging risks relevant to your sector, it is helpful to consider a number of factors:

3. Course Corrections

Part of a dynamic strategy involves the capacity to pivot as circumstances dictate or opportunities are identified from emerging risks. One mechanism for managing this is through scenario workshopping or war gaming which builds leadership confidence and response strategies through a series of scenarios from business as usual to multiple emerging or disruptive events. This enables a broader perspective on organisational health, vulnerabilities, and opportunities for sustainability and growth.

This in turn can support an organisation to actively develop a culture of innovation and explore complimentary and diversified strategic options which will position you to pivot seamlessly when necessary.

There are many benefits derived from investing in innovation incubators/ accelerators:

• Entrepreneurial mindset increases adaptability to changing environments & market shifts
• Low-risk environment for experimentation & rapid prototyping
• Staying ahead of the curve through discovery of new value propositions
• Insights gained help companies solve problems faster & streamline their operations
• Direct access to the latest disruptive trends & technologies that have been tested in the market

Effective Assurance starts with a simulation

There is value in conducting deep dives to establish the effectiveness of Business Continuity & Crisis Management plans, however there is a limitation to the assurance that can be gained by doing this in isolation from a simulation exercise.

• Often plans have been developed in siloed parts of the business and key roles and responsibilities may have been defined and documented but are frequently not communicated.
• Responding to crises does not happen in a siloed capacity, so understanding how other functions and teams respond is integral to one’s own response.

The best laid plans can also fall short if not regularly reviewed and exercised as the structure of the organisation changes, systems develop, and people move between roles and organisations.

Conclusion

Organisations need to design more resilient strategies to adapt to the volatile, uncertain, complex, and ambiguous (VUCA) landscape. Interventions which reflect this and enable proactive course corrections in the short, medium and long term, whilst having clarity on their organisational health, will ultimately weather the storms and emerge stronger.

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