Back in February 2021, I published a CUSO Magazine article “Resilience Starts With Awareness,” part five in a series titled “Continuity at the Core” where I attempted to describe the benefits (read value) of an effective business continuity management (BCM) program. These benefits include:
- Enabling us to anticipate and plan for disruptive events.
- Aiding in limiting the loss of assets, revenue, and customers.
- Satisfying legal or regulatory requirements (state, federal, etc.).
- Minimizing confusion and enabling effective decisions during a crisis.
- Maintaining the public image and reputation of the organization.
- Preparing personnel for a prompt and effective response and recovery effort.
- Facilitating the timely recovery of critical business functions and information systems, etc.
Since then, the term “resilience” has taken an elevated meaning as organizations in most industries strived to survive a pandemic and started to plan for the next new normal, whatever that was going to be. While some industries have returned to, if not exceeded pre-pandemic volumes, it is anything but normal.
Fast-forward nearly two years and we now find ourselves in a period where our battle for resilience must be fought on multiple fronts. Elevated threats in the area of cybersecurity, global supply chain risk on all tiers, labor shortages at all levels, and a bleak macroeconomic forecast that is poised to sink those who are found unprepared.
Resilience takes on a new face, becoming more than a buzzword and an attractive idea. If anything, resilience has become imperative during these uncertain times.
Resilience begins left of bang
Three questions come to mind. What is “resilience”? How do we improve it? And how do we measure it? Let’s add one more and ask how much resilience is enough. For the purpose of this article, I am defining resilience as “the ability to withstand unpredicted threats and unforeseen changes in the business environment resulting in a stronger operational posture.” This requires careful attention to how we respond to both short-term challenges while executing long-term strategies. Otherwise, we risk finding ourselves off course without a plan for correction.
Significant disruptive events (aka “bang”) are growing more frequent but at the same time becoming less predictable. The speed and spread of impact continue to multiply the varied effects up and down the supply chain. The rapid digital transformation has increased the amount of data shared and the degree of complexity for business processes and reduced the amount of time available for making critical decisions. While this has opened doors to new markets and provided channels to deliver new products, it has also exposed a larger perimeter where companies may be vulnerable to exploitation, such as protection against cyberattacks.
Succeeding in uncertain times
Financial institutions need to move beyond short-term performance and baseline organizational health targets. They must be able to withstand the continuous and unpredictable threats around each corner and come out of each stronger and more resilient. Normal is not something to get back to, but something to watch as it shrinks in the rearview mirror. What matters is the next destination we are pursuing in our windshields.
A balanced approach across multiple areas of the organization
Building resilience in today’s environment requires attention and investment in multiple areas beginning with financial health. A balanced approach to both short and long-term goals is needed to weather extreme shifts in revenue and costs, understanding that the risk-return profile will likely fluctuate.
Operational resilience is no longer limited to being able to scale to meet spikes in demand but to be flexible during low activity periods without risking future sales and loss of talent resources in this tight labor market. Anticipating and adapting to change is needed to maintain long-term operational health. Developing innovative partner relationships with organizations from horizontal and vertical industries and extended supply chain relationships can help navigate the sudden storms that appear.
Resilience in technology means more than enhanced availability through redundancy. To maintain a balance across all areas, a careful eye must be applied so that we do not over or under-invest in any one, leaving us vulnerable. The technological infrastructure must be strong, secure, and flexible. Understand what is most critical and prioritize resource allocation to maintain a solid core. A robust business continuity and disaster recovery program is needed to minimize service disruptions for both customers and internal operations.
Corporate or organizational resilience is needed where everyone feels included and empowered to perform their best. Talent management has taken a front seat in today’s labor market, where successful companies attract the best candidates, develop them for today’s agile business environment, and upskill/reskill existing staff with clear succession strategies at all levels throughout the organization. Investing in the culture across the organization, combined with reinforcing desired behaviors for performance through clearly defined standards and structure, helps to develop and maintain the resources you need today and for the yet unknown changes that are on tap for tomorrow.
The next area of resilience, reputational, is both a sought-after desired state and a fortunate result of completing the above with intentional effort and strategic planning around a shared set of values. “Fake it until you make it” will not cut it in today’s fast-paced environment. The organization has become the product. You are what you do. Disruptive start-ups and innovative competition are pursuing your customer base. Resilience requires listening to what the market is saying, engaging with your clients to discover where you can improve the relationship, and responding to criticism to address expectations.
Business model resilience
The final area of resilience is the business model itself. To survive and thrive in today’s market, the organization must be able to anticipate and adapt to shifts in demand. The same pace of change that is challenging you is challenging your customer base. In B2B industries, they are struggling to adapt and become more agile. They are looking for solutions to strengthen their resilience in this competitive landscape during a time of rapid technology and regulatory changes. In B2C industries, they are looking to maintain a standard of living with fewer resources.
New plans and approaches are needed
We addressed anticipating and responding to the changes that risk disrupting our operations. Anticipating relevant scenarios enables teams to exercise and test their resilience, strengthening the memory muscle for when they do occur. Such pressure testing helps to uncover gaps in preparedness level, useful for operations today.
Overall response capabilities are required for those scenarios that we have not anticipated. Those who are prepared and execute well are often rewarded for it, as opposed to poor executions that end up as case studies for how not to respond. Early detection of changes or threats followed by a carefully designed response enables teams to adapt quickly to evolving circumstances.
The next move is to embed resilience into the organization. Where traditional business continuity and disaster recovery strategies typically plan around a single scenario, such as recovering from a natural disaster or service outage, a new approach is required today. One that plants and nourishes seeds of resilience in each area and department, seeking to improve operations each day, not just when disaster strikes. One that reduces single points of failure and balances the productivity load at all times, not just in the face of unpredictable threats or change.
Building the new resilience roadmap
The path forward today is the same as it was described in the Continuity at the Core series back in 2021. The threat landscape has changed as has the degree of unpredictability as to when and how frequently they will occur. It begins with (1) an honest and open evaluation of where you are today, (2) an informed and collective agreement on the degree of resilience we will need over time (short and long-term), and (3) a plan to design, build, test, and maintain the desired resilience state.
In future articles, together we will dive deeper into those three steps and continue our quest for resilience. There are steps everyone can take today to learn more, communicate and promote what they’ve learned, and champion the need for a focus on resilience.
- Where are the gaps that you are already aware of across your organization, in each of the areas discussed in this article?
- (Financial, operational, technology, organizational, reputational, and business model).
- What steps can you take today to begin addressing them?
- What’s stopping you?
- Which disruptive threats do you lack confidence in your ability to respond to?
- What change would increase the level of confidence?
- What can you start doing today that will make your organization stronger during normal times and more capable to withstand and adapt to today’s threats?
- Who do you need to convince?
In addition, make the decision to embed resilience in decisions going forward, looking out on the horizon through the windshield, not seeking to go back to the normal that is but a memory, only seen in the rearview mirror.