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What is Business Resilience?

By Dave Lloyd on November 4, 2013 in General
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What is Business Resilience?

Resilience as a lexicon is fast entering the business world and at this stage much debate is abound as to what it is really is. The defensive strategies that are employed by business can range from good integrated “target hardening” tactics such as Cyber / Information and Physical Security, done properly and led from the top down with good governance rather than organically which leads to silos and lack of oversight. If a member of your staff has his or her security pass replicated, can your systems spot that he is in two different locations at the same time?

 

Diversification is a sensible strategy if we can choose an alternative product or service that is closely related to the market we are in today. For example, the business world is littered with stories of large organisations that expand into new markets at great expense only to reverse or spin-off those new businesses due to investor or regulatory pressures, such as the banking industry. Partnering with an expert in that new market is a good way to reduce risk of failure.

 

Decentralisation was proven to be a very effective survival strategy for those companies who faired best during the Japan Earthquake and subsequent Tsunami. Complex centralised communication systems and networks failed and cut-off local outposts. Distributed leadership and plenty of cross-skilling and well-rehearsed business continuity plans are key.

 

Dematerialisation and a de-coupling of economic growth from the environment are impossible in my view. We need to understand that we co-exist and without the environment we have no growth and at some future stage we may have no economy if we do not change behaviour. Large and small businesses alike need to build in the notion of Natural Capital by going further than just understanding what emissions they produce but by also attributing costs in revenue terms to the activities they undertake in relation to their environmental impacts. Furthermore, build Natural Capital into the balanced scorecard and report it in the results.

 

Defining a clear Strategy is a good thing but only if the whole organisation is involved in the construction of it and I mean the employees as much as the stakeholders. Strong strategies built by 10 board members and built into objectives linked to pay and incentives will invariably mean that when resilient behaviour is required the employees will take the course of action that delivers the pay-check or bonus; the company may fail at the same time.

 

The real question at the back of all this is can we measure it in a universally accepted way and just now I would argue we cannot, or at least not in its entirety.

 

This post is a copy of a comment in response to an article in The Guardian On-Line posted on 28th October 2013 which can be viewed in full here http://www.theguardian.com/sustainable-business/business-survive-volatile-world-resilience?commentpage=1

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Dave LloydView all posts by Dave Lloyd

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