The Race To Operational Resilience In The New Normal

What is resilience? It’s what helps individuals and organisations bounce back from adversity. The result of experience, ability and strength, resilience is a dynamic process that has to be developed over time, and continually tested to gauge its fitness for purpose. Within the business context, resilience is what keeps companies going, and sustains them through difficult times. It can be a combination of factors – sufficient resources, capable leadership, correct strategy etc – but companies that have successfully dealt with adversity all have one thing in common: they learned from bitter experiences, and were able to apply this knowledge effectively, when they were faced with adversity again.

When the Covid-19 pandemic first started to spread, organisations were generally quite quick to take action. But as the virus raged globally, and countries closed borders as millions fell ill, industries were ravaged, and the supply chain was threatened as never before. It became evident that businesses were not as resilient as they thought they were, and there had actually been little attention paid to the possibility of disaster on a worldwide scale. Governments scrambled to prop up their respective economies; big pharma went into overdrive to find a vaccine; some firms even managed to profit by ramping up production of items like detergents, sanitisers and personal protection equipment.

But it became evident, a few months into the pandemic, that even with a vaccine, there could be no return to business as usual because of the far-reaching, long-term consequences of such an event. Ironically, an event of this magnitude, while being the cause of these consequences, would demand precisely that – a rapid reversion to normal operations. What needs immediate attention today is a recalibration of operations, so that business can return to something resembling normal – the “New Normal.” Organisations are going to have to explore new ways of working, and actively identify opportunities that will help them innovate and grow, while trying to sustain themselves.

One indication of an organisation’s resilience is its ability to absorb the impact of a negative event, recover and adapt to the new situation. This is not easily accomplished; it needs extensive planning and preparation. Organisations which want to develop resilience in the face of future challenges will need to ensure that their operational resilience capabilities are up to par. They can do this by carrying out an initial operational resilience assessment to gauge the extent of their strengths and shortfalls. In the process, they may find they have to deal with outdated procedures and processes, as well as legacy systems that may curb their progress.

Subject matter experts generally agree that the pandemic has affected businesses across the industrial board in four main areas: the supply chain, workforce, finances and sales.The supply chain has been disrupted, leading to logistics challenges, shortages and difficulty in meeting demand for goods and services. Staff are now working from home to avoid infection, giving rise to difficulties in monitoring output and increasing the risk of systems and network security. “Business Unusual” has drastically reduced revenue while bills still need to be paid; and purchasing has gone online in a big way, forcing some firms to completely rethink their business models.

In this near-chaotic environment, long-term operational resilience is probably on hold until companies can get back on their feet. But this is an opportune time to put in checks and balances to support the organisation’s operational resilience and help it manage the various risks that may arise in the future. Resilience and risk management may have different definitions but they intersect at many points. While resilience concerns the continued functioning of systems, procedures and processes after a negative event, risk management tries to identify and understand what created the event to begin with, and helps to put mitigative measures in place to prevent a recurrence and to cushion its impact to ensure the organisation can continue to achieve its objectives.

So how should businesses move to operational resilience in the new normal? Firstly, they should accept that the environment will never be “normal” in the same sense as it was before. There will be more disruption and uncertainty to contend with, and the key to survival may lie in an organisation’s agility, flexibility and ability to pivot when confronting challenges. They may want to conduct an operational resilience gap analysis to identify where their shortfalls lie, and address those first. The results of this may indicate the direction they should take; they should compare this against existing strategy and make adjustments where necessary.

The pandemic has been a learning experience for everyone; it has become evident that rapid decision-making is a must – but this has to be supported by robust data and information systems. Businesses may want to put in systems which provide such information, or automate parts of their operations to enable the supply of reliable data. Automation may also be applied to indicate when certain mitigative measures must kick in, so that the organisation remains resilient, and business is not paralysed by disruption. Information also has to be complemented with insight, applied through human intervention and awareness gained from prior experiences.

Businesses may find that their efforts to achieve operational resilience can be matched with a number of elements in risk management frameworks. These frameworks generally cover the measures which will anticipate, prevent or mitigate threats before they occur, while resilience is connected to recovery after the event, which necessitates the ability to prepare for and adapt to changed or changing conditions. Businesses will find that they have to do more with less, in the New Normal – something that will further test their resilience. Those that emerge from the pandemic may be battered, but their survival will be a testament to their resilience, and they may find their value, competitiveness and sustainability significantly increased.