The latest global study conducted by the Economist Intelligence Unit (EIU) for the British Standards Institution (BSI) finds that 88% of CEOs are prioritising investment in resilience to ensure their business’ long-term survival.
The report identifies a worrying gap in the capability of firms to maintain long-term growth. The global study of business leaders reveals just one third (29%) trust that their firms have fully-embedded resilience practices in place, while less than half (44%) expect that to be the case in three years’ time. This is despite 88% believing that resilience is a priority for their organisations and indispensable for long-term growth (80%).
The comprehensive study, entitled ‘Organisational Resilience: Building an Enduring Enterprise’, finds that achieving the resilience necessary to survive and prosper in the long-term is held back by a lack of skills and knowledge, insufficient leadership commitment and short-term financial considerations.
This research also highlights the belief that cultural resistance and skills silos create weak points and bottlenecks within an organisation. Two fifths (39%) of business leaders struggle to secure business support for essential resilience measures such as information security, supply chain efficiency and corporate governance.
Embedding of resilient processes
Just one-in-five (19%) European organisations have succeeded in fully embedding resilient processes compared to a third in North America (37%) and the Asia Pacific region (34%).
Worldwide, a third (33%) of larger organisations have resilient processes embedded across their business compared to a quarter (26%) of those with revenues of less than $500 million.
Smaller businesses are held back by a lack of knowledge, whereas larger firms cite financial issues as being a stumbling block. Older organisations are found to be more likely to see the connection between resilience and long-term business growth.
Resilience as a driver of business success is defined by the report from the avoidance of operational failures to a strategic enabler. Three fifths (61%) of respondents see it as a source of competitive advantage, with more than half viewing a very strong link between investment in this area and long-term financial performance.
Those companies interviewed for the report (including Fiskars, the 366 year-old Finnish consumer goods concern) explained that achieving organisational resilience is vital for long-term financial success. True resilience is found to come from “strategic adaptability” across all aspects of operations.
Agile, robust and adaptive
Howard Kerr, CEO of the BSI, commented: “Navigating today’s fast-moving and ever-changing world requires companies to be agile, robust and adaptive in order to defy corporate mortality and pass the test of time. That two out of every three business leaders in our survey believe their organisations may fail this test shows just how fragile and vulnerable company structures are in today’s world.”
The report identifies six key features of resilient organisations:
*Proactive approach: a willingness to adapt before being forced to do so
*Dynamic leadership: support from the top of the organisation to embed the process from the CEO down
*Responsiveness to change: a willingness to listen to market needs
*Strong corporate culture: holistic inclusion and recognition of everyone’s responsibility and contribution to the business
*Remaining focused: possessing a clear vision, purpose and identity
*Long-term view: the avoidance of responding solely to short-term financial goals
Victoria Tuomisto, spokesperson for the EIU, added: “The apparent gap between the intention and action in companies’ approach towards resilience suggests that businesses are facing a host of challenges when it comes to embedding resilience in the face of what’s now a changing and volatile marketplace. Those challenges will be different for every company. By definition, a resilient organisation is one that’s constantly shifting and adapting. There’s no ‘finish line’ when it comes to implementing a culture of resilience.”