In these times of economic and geopolitical uncertainty business resilience is critical. Read our article to find out how companies can become more resilient in a crisis-abundant marketplace.
What does the term ‘Business Resilience’ mean?
Recent events, such as the Covid-19 crisis, the conflict in Ukraine and the earthquakes in Turkey and Syria, have proven that business resilience is essential not only to survive, but to continue operating through and recover from difficult circumstances.
The term ‘resilience’ derives from psychology and describes the process of changing behaviours to overcome unexpected challenges. In the context of business, this means that resilient companies can identify risks early, adapt to negative external changes and maintain business operations during difficult situations. To ensure a company is as resilient as possible, leaders need to implement strong risk and crisis management processes. In our recent report, ‘Data-Driven Resilience’, based on a survey of 3,000 business leaders, you can find out how companies like yours are strengthening their business resilience.
The Seven Pillars of Resilience
To enhance business resilience, leaders and their employees should consider the seven pillars of resilience, a popular model developed by Ursula Neuber. The seven pillars are:
- Optimism: Crisis management is based on the belief that challenges are temporary and can be overcome. This includes the belief that events can be influenced.
- Acceptance: To overcome challenges, it is first necessary to accept them. Only those who have a full overview of problems can initiate further strategic steps.
- Solution orientation: Resilient companies can act effectively and in an agile manner in difficult situations and look for solutions.
- Leaving the role of victim: It is important to focus on one's own strengths and weaknesses and identify areas for improvement in the future.
- Taking responsibility: Resilience involves taking responsibility for one's own choices and consequences.
- Network orientation: A stable network is essential for coping with difficulties.
- Planning for the future: Through effective risk management, resilient companies can avoid or at least manage negative events should they occur.
Business Continuity vs. Business Resilience
Unlike business continuity, business resilience goes one step further. Business continuity is based on the business continuity plan (BCP). It is the company’s ability to resume business operations quickly after a failure or disruption. The aim is to respond appropriately to disruptive events and maintain an acceptable level of service or production after the disruption. One aspect of business continuity is disaster recovery, which involves restoring the functionality of the IT infrastructure after an outage or cyber-attack.
Business resilience goes beyond recovering from a disruption. It pursues strategic initiatives to turn challenges into new opportunities. The focus is on defining measures to emerge stronger from future crisis’. Business resilience promotes post-crisis strategies to avoid costly failures and secure vulnerabilities. An agile company therefore first ensures business continuity to develop business resilience.
Why is Business Resilience Important?
Companies increasingly face challenging situations that can disrupt operations, damage reputations or bring other threats to life. Flexibility is the foundation of a resilient organisation, enabling businesses to adapt to changing circumstances and develop new strategies.
First, a distinction is made between acute, sudden crises and those that are bubbling under the surface for a long time.
Managing Sudden Crises
Acute crises are rare but sudden and unexpected, resulting in disruption to production or operations. They require rapid response and action in the specific situation. Examples of acute crises are:
Pandemics
Natural disasters
Financial crises
Theft, industrial espionage, or fraud
Insolvency of major customers or suppliers
Recognising Creeping Crises
There are also crises that develop over the long term and are not perceived in time. Preventive measures, such as risk monitoring and third-party performance, prove useful in these situations. Examples of creeping crises are:
Increasing competitive pressure from digitisation and globalisation
Demographic change
Shortage of skilled workers
Restructuring
Technological change
How companies prepare for and respond to events such as data breaches or quality defects determines how well they recover afterwards. Resilient companies respond to challenges with flexible solutions, for example by developing products that are adapted to the current situation, and finding alternative suppliers. These companies thus have a competitive advantage over other less agile organisations. By building resilience, companies avoid reputational damage and financial losses.
Regardless of how extreme a disruption is, we show in a detailed report how to prepare your company for any situation with appropriate data management. Find out which threats have the biggest impact on businesses.
Where can Resilience be Encouraged?
Business Resilience should be applied to all areas of a company to help in emergency situations:
Technology resilience, digital resilience, and cyber resilience
Resilient employees and leaders, and an open corporate culture
Financial resilience
Manufacturing resilience and supply chain resilience
Competitive and customer resilience
Pipeline resilience
Organisational resilience
The following factors contribute to improving the resilience of a company:
Risk management: identifying risks early and mitigating them quickly.
Crisis prevention: planning and establishing appropriate measures in response to emergencies.
Crisis response: acting appropriately and purposefully in an emergency to avert further damage.
Crisis management: emerging from crises stronger, faster and with resilience.
Strengthening Resilience With Data
Dun & Bradstreet helps businesses minimise risk, make the right decisions and strengthen business resilience with best-in-class global data and insights.
The D&B Hoovers sales intelligence platform helps identify quality leads and build a resilient sales pipeline.
D&B Finance Analytics helps to identify financial risks, reduce costs and increase operational efficiency. Financial data on more than 500 million companies can be found in Dun & Bradstreet's company database. The scores enable credit managers to make confident credit and risk decisions.
D&B Risk Analytics provides data for the monitoring and management of supplier risks in an integrated software solution. This allows supply chain managers to keep track of suppliers’ shifting risk factors such as stability, exposure to sanctions, geographical and financial risks, poor ESG performance and more.
In the following article, you will learn how to identify and assess risks, how to plan and implement business resilience in individual business areas and which success factors lead to higher resilience.