Resilience in Business
Few things are more important in business than resilience.
What Does Business Resilience Mean for Your Organization?
Business Resilience Articles
Businesses have plans for growth and managing performance. They have strategic plans to increase efficiency and reach long-term goals. However, business resilience planning may be overlooked.
A company may have a disaster recovery plan, but that is not the same thing as resilience planning. Are you confident that if your business faces an unpredictable event that it can transform and adapt for continuous business operations?
What Is Business Resiliency?
Business resiliency is a company's ability to adapt quickly to disruptions to maintain continuous business operations. It is the ability to protect brand equity, assets, and people during a crisis or disaster.
However, business resilience is more than disaster recovery and crisis management. Business resilience planning is also known as business continuity planning. It recognizes the importance of ensuring that the elements necessary to maintain workflow during unexpected events can adapt and respond, including supply chains, management, and workers.
The impact of a disaster or crisis is costly for a business. Businesses can lose thousands of dollars a day if they must close their doors. Large corporations could lose hundreds of thousands of dollars each day if they shut down. Businesses that take steps to build resilience have a better chance of surviving disruptions and finding ways to thrive even when outside forces change dramatically.
Planning for Threats That Lead to Business Disruptions
The COVID-19 crisis taught us that business disruptions come from forces other than natural disasters. Many businesses have a crisis plan for dealing with adverse weather, fire, and other natural disasters that could lead to business disruptions.
However, they may not have a plan for business continuity in the face of other events.
How would your business respond to and continue business in the event of a cyberattack or data breach?
Do you have a plan in place that deals with the issue that ensures your business would not shut down completely?
Do you have a risk management plan for unplanned power, telecom, or IT outages?
Can your business continue if these services were out for days or weeks?
Resilience requires your company to be able to adjust quickly to find other ways of continuing business. For example, if you experience a supply chain disruption, can you obtain supplies from another source? Are there ways you could continue business in the short term without these supplies? Are there other alternatives?
Conducting a business impact analysis can help you answer these questions and other questions related to business resiliency. The COVID-19 pandemic is an example of why businesses must have a resilience plan that anticipates how a crisis will impact the business in the short term and the long term.
The pandemic has resulted in a new "normal" for many individuals and companies. If business models are rigid and static, they may not have the flexibility to adapt to a new "normal." However, companies with strong resiliency plans, flexible risk management, and dynamic crisis planning have a competitive advantage over their competitors who cannot adapt and change during a crisis or unexpected event.
Five Important Factors of Business Resiliency Planning
Business resiliency planning mitigates the impact of a disruption to your business caused by a disaster, crisis, or other unexpected event. It anticipates how a disruption impacts your workflow and how your company can adapt to minimize the loss caused by the disruption. Because each business is unique, your resiliency plan addresses aspects that are specific to your business. However, the five factors that all businesses should consider when conducting risk management and resiliency planning include:
Resiliency Factor 1: Fill Key Positions Within the Company
Each company has critical positions within the company that are vital to the company's operations. The nature of the company dictates these positions. For example, a restaurant cannot operate if it does not have chefs. Other individuals within the business could fill in for other positions, but someone needs to cook the orders to keep the doors open.
Having a plan to fill key positions quickly is crucial for continuing business in a crisis. The first step is to identify the positions that would cause your company to cease operations if the people in those positions could not work.
Resiliency Factor 2: Emergency Plans Are Not Sufficient
Every company needs an emergency plan to address a variety of risks. For example, every business needs an evacuation plan in case of fire or other threat. However, what happens after the threat is over? What happens if you cannot get back into your business to retrieve records because the building is not safe? Can you continue business operations if everything is destroyed by fire?
A business continuity plan is a framework for your company to recover and resume business operations during and after a crisis. Key elements of a business resiliency plan include:
Delegation of authority
Prioritized and defined essential functions
Risk management plan
Emergency response plan
Delegation of authority
Vital records and resources plan
Compliance with federal and state regulations and laws
Alternate site procedures
Digital transformation plan
Options for alternative supply chains
Plan for returning to normal operations
Business succession plan
There may be other issues that your company might need to address, depending on your business.
Resiliency Factor 3: Establish Redundant Systems
Redundancy can negatively impact short-term efficiency. However, some systems are vital to business continuity in a crisis. Those systems should have redundant systems to ensure that the company can continue its high performance if an unexpected crisis or disaster causes a system failure in a vital area.
Resiliency Factor 4: foster Diversity and Flexibility
A company needs to have alternative ways to react to a situation. Resilience means adapting to changing circumstances. For example, many companies instituted a work-from-home policy in response to COVID-19. However, what happens if that plan does not work?
The company needs backup plans. For instance, could the company create "pods" that protect workers from being exposed to the virus while working in the office? Could some of the work be outsourced to companies that can handle the work?
Resiliency Factor 5: Invest in Risk Managers
Risk managers continuously plan for the unexpected. They should understand the company's operations better than anyone else in the company. Companies that invest in highly-skilled, experienced risk managers and give those managers the resources they need have a better chance of surviving a crisis and adapting to changes that ensure the company is resilient.
Key Benefits of Resiliency Planning
The apparent benefit of resiliency planning is the continuity of business to minimize financial loss. Planning reduces the risk of financial impacts from pandemics, natural disasters, and other threats. However, it also increases the trust consumers have in the company and improves the brand's overall reputation.
Consumers notice companies that recover quickly and minimize disruption for consumers.
Resiliency planning minimizes the impacts of the disruption to the company, consumers, and the community. It also reduces the risk of business interruption by giving the company a plan to follow and the resources necessary to continue business operations.
Some threats may have a low probability. A global pandemic might have had a low probability before 2020. If the pandemic taught companies anything, it should be that the impossible is possible, and resiliency planning can mean the difference between business continuity and business failure. Moving forward, investing in resiliency planning can prevent future business disruptions from unexpected events that could result in substantial loss of revenue.