The past year forced organisational leaders to determine how to make their businesses more resilient for a future expected to be studded with more disruptions.
The economic and health impacts of the coronavirus pandemic not only hit global markets quickly and deeply in 2020, but they also occurred on top of fallout from climate change and social and political unrest. This combination tested businesses’ risk management worldwide and forced many to explore new opportunities or change their business strategy, a 2021 Deloitte survey of more than 2,200 executives in 21 countries found.
A majority of the survey respondents expected disruptions reminiscent of 2020 to recur in the next decade. Climate change and environmental sustainability topped the list of societal challenges (47% of respondents) that businesses will have to tackle, followed by healthcare issues and disease prevention (42%); gaps in education, skills, and training (39%); income inequality and distribution of wealth (37%); and systemic bias such as racism and sexism (31%).
5 traits of resilience
If organisational leaders believe these disruptions are the way of the world to come, how do they propose to increase businesses’ resilience?
“Building resilience is not a three-month or a six-month project. It’s a seed that should germinate in the organisation from the very beginning, in all its aspects,” said Rajesh Ray, ACMA, CGMA, the CFO, vice-president, and country manager India at US-based health tech company Mpowered Health.
Preparation is a key trait of resilience, the Deloitte survey confirmed. Respondents whose organisations had taken key actions before 2020 were more likely to say they weathered disruptions in the past year well or very well. These key actions included implementing processes to easily redeploy workers as needed, investing in technologies and systems that allowed for remote working, and diversifying revenue streams and supply chains.
“We have a strong focus on resilience in our technology areas, through plans and processes, whilst continually adapting to change and the emergence of new technologies,” said Virginie Lafougere, ACMA, CGMA, CPA (Australia), the CFO at Movember, an Australian not-for-profit that works to raise awareness of men’s health globally.
Flexibility and versatility, especially in the workforce, are also important components of resilience, according to the Deloitte survey. More than half of respondents (54%) ranked flexibility and adaptability as the most critical workforce trait for the future.
Trustworthiness, which is represented by good communications and transparency, and collaboration are also key traits of resilience, the Deloitte survey suggested.
“The right kind of team spirit and strong social connection through an organisation help build trust among peers in the organisation,” said Kenneth Cheung, FCMA, CGMA, the CFO at the Singapore-based advanced materials technology company JIOS Aerogel Group.
That’s what enabled his teams to stay strong and deliver despite the pandemic, Cheung said: “See how many people are working remotely and doing it well. It’s not easy to work from home. The team-building activities that we had done in the past helped us to build trust among the team members with the knowledge that everyone is doing their best to deliver great results.”
Responsibility, the commitment to look beyond the bottom line, is the fifth key trait of resilience, according to the Deloitte survey. Responsible companies put the needs of their customers, employees, contractors, communities, and the planet at the forefront — criteria also known as environmental, social, and governance (ESG) factors.
Companies vanished before the pandemic because they neglected ESG factors, Ray said.
Tactics that build resiliency
To cultivate the five traits of resilience and build strong organisations, Deloitte recommended many tactics that Cheung, Ray, and Lafougere echoed:
- Create comprehensive crisis response and scenario playbooks. These playbooks should map out potential internal and external risks and should be tested regularly with simulations that involve key decision-makers across functions and departments.
- Hire for specific mindsets. Employees with a can-do, problem-solving attitude who work in a corporate culture where change is part of the normal course of operations face challenges in a positive manner, Cheung said.
- Support a culture of collaboration. Eliminate internal silos and invest in technologies that promote working together. Seek relationships with like-minded organisations to tackle societal issues. Collaboration amongst peers, staffs, teams, stakeholders, and even social groups has helped companies brave the pandemic while growing in certain respects, too, and it remains one of the strongest pillars of resilience.
- Promote continuous learning. Develop training or rotational programmes that allow workers to learn new skills and capabilities. “Keep up with what’s new so, when you need to change or adapt, you know how to do that,” Cheung said.
- Boost trustworthiness. A strong team spirit combined with clear communication and strong social connection leads to the building of trust and transparency. Prioritise mental health, wellness, diversity, inclusion, and equality. “Trust also means showing your vulnerability, in admitting that you don’t know something, and asking for help,” Cheung said.
— Swati Sanyal Tarafdar is a freelance writer based in India. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.