Being proactive means being prepared, and being prepared shows good management and a firm grasp of the risks your business faces. In an environment that is increasingly volatile, proactiveness actually prepares the business for much more than just an emergency.
Consider this: when a crisis hits, does it affect just one part of your business, or does the whole business experience the episode? While some parts may bear the brunt of the impact, there are ripple effects that could go on for an extended length of time that could be more damaging. As an example, one contaminated batch of aspirin can spark a total recall of the entire stock of that particular brand, trigger investigations by the health authorities and cause the general public to lose confidence in all the other products the company produces. It’s a nightmare, but it has happened. The positive takeaway from this is that companies have learned to be proactive about managing such episodes.
Today, there is as much attention given to the identification of risks and mitigative measures, as there is to running the business. A greater appreciation of risk management and what it entails, is developing across the board, and while larger corporations generally have always had some sort of risk management framework in place, even smaller firms are now beginning to realise the importance of making a concerted attempt to look into the future by identifying their missed opportunities and present shortfalls, and ensuring that these are addressed, based on past experiences.
So how do things come together, to make proactiveness a major element of resilience? It doesn’t need extensive resources, but it does require the organisation – or rather, the personnel involved – to think the processes through. But first of all, get HR in on the action because more than anything, a firm’s proactiveness and resilience depend on its people. Companies’ manifestos often proclaim “Our People are our Greatest Asset” but when it comes to actually manifesting it, “Our People” get relegated to the back seat and are told to “Just Follow Instructions!”
The Board and Senior Management may be responsible for the tone at the top, but setting the tone is irrelevant if there’s nobody to set it for. Companies should listen to what people on the ground are telling them; their staff are major stakeholders in the business! This, of course, necessitates proper communication. When a company communicates appropriately, it is telling all its stakeholders that it is a responsible, well-managed, compliant entity that puts the best interests of its shareholders, stakeholders and society ahead of everything else.
The quality of its communications also indicates the quality of governance that exists in the firm. Is it being well run? Are its people doing their jobs? Are they doing it with integrity? In other words, can they be trusted? Shareholders, especially, will find this a very pertinent question as they need to be assured that their investments are safe, and likely to be so in the long term. This sort of transparency through communication indicates good governance and management – two great brand builders.
In what other ways can companies be proactive in building resilience? They can recognise the need for putting checks and balances into their systems, and not being afraid of starting over if these measures fail; learning from mistakes plays a big role in making yourself better. It helps you recognise which measures work, and sharpens both your anticipation of problems and risk management skills in the process. When these factors come together, the organisation develops a risk culture, and employees at all levels become aware that it is within their power to manage risk – that their proactiveness is spurring the organisation’s resilience.
