Preparing for known disruptions
Effective resilience strategies include technologies for digitalization, automation, remote work and robust mobile networks.
What is a resilient enterprise?
There is no international definition of what a resilient enterprise exactly is. Figure 3 illustrates some attributes associated by the interviewed decision-makers: innovative, financially strong and digitalized. While their focus on financial strength relate to the sturdiness of a company, decision-makers agree, nevertheless, that resilience is all about adaptability - to learn faster in a changing environment. Amongst employees, the ability to act quickly and easily (agility) followed by innovation and financial strength are seen as the most important attributes.
As stated in the IndustryLab report “Dematerialization path to profitability and sustainability”11 enterprises are becoming more globalized. Therefore, an uncertain geopolitical future provides a challenge for resilience. The world is more interconnected than ever before, from supply chains, to travel, to the flow of information, and these ties are under threat. Many companies are not evaluating their robustness in the context of a global system and how their operations can continue if connections are abruptly cut; thus, thus, they need to consider their digital and physical dependencies.
Enterprises that have experienced disruptive events are better prepared
Our research show that resilient enterprises are generally more digitalized, and digitalized enterprises are generally more resilient. In fact, we found that 79 percent of companies with a well-defined resilience strategy are already highly digitalized today (having reached at least 70 percent digitalization on a scale where 100 means no more steps to take). Conversely, more than half of the companies lacking a resilience strategy also have a low digitalization level.
Our results also show that enterprises have a relatively high level of preparedness for disruptive events. The recent pandemic and the military conflict in Europe have likely made enterprises more prepared. On average, 49 percent of decision-makers say their company has a well-defined strategy to handle disruptive events, and only 4 percent disagree. As enterprises heavily depend on their talents, it is crucial for business leaders to consider the personal resilience of their employees. It is, therefore, positive that eight times more employees say they are personally prepared than not.
Having a plan and being proactive in implementing it may help companies react and recover quickly. Larger companies tend to have more internal capabilities for crisis management teams and BCP, while at the same time, their scale and size expose them more to disruptions.
As shown in figure 4, experiencing several disruptive situations increases a company’s resilience. We found that enterprises that have undergone a particular event are, on average, 10 percentage points more likely to be prepared for it again. Differences in results vary depending on the disruptive event. Only the pandemic shows no difference, most likely because even if the pandemic did not directly impact a company, everyone still experienced what it was like living and working in a pandemic world.
Generally, most enterprises have preparations for disruptive events and crises and have deployed 9.5 of the 13 strategies we identified in our survey. The most common way to prepare is by investing in technologies that allow remote working, digitalization and automation (figure 5).
Communication is critical for resilience
Decision-makers often point out the importance of crisis communications. In our interviews, several emphasized the value of transparency when sharing information, whether it is with the media, society, or employees. In times of crisis, there is a need for rapid disclosure of information explaining the enterprise's situation. Accurate and timely information about what happened, what to act on and recommendations going forward are viewed as crucial in handling disruptive events. A poorly handled communication or response can worsen the impact of the event.
More than 7 out of 10 decision-makers and almost as many employees who use communication and connectivity services like 5G, telepresence and cloud solutions say that these are already making a substantial contribution to the resilience of their respective organizations. Therefore, cellular network resilience is also of utmost importance, particularly with the rise of remote working – 72% say it is essential that cellular networks can withstand disruptive events and crises. At the same time, blending office and remote work into a hybrid work model introduces new challenges for businesses, including those relating to their work dynamics and real-estate strategies.
