"Fortune favors the prepared mind

Louis Pasteur"

No return to ‘business as normal’

Change will continue to happen

The speed and complexity of change in today’s tightly-connected, digitally-enabled world continues to increase. The notion that ‘once the immediate issues have been resolved, there will be a chance to take a deep breath and relax’, is no longer realistic. It is essential to act now; reflect on lessons learned from the events of the past year then rehearse every imaginable change scenario. Being in the wake of the pandemic means that it is still possible to capitalize on the pace and momentum of change over the past year and direct it towards initiatives that will build resilience for the future. Above all, it will be important to appreciate that the world will continue to move ever faster, so failing to move at least as fast could mean being left behind. The issues that organizations, and the wider planet, are facing and will continue to face in the coming years, will demand resilience.

Becoming a resilient organization

However challenging it may be for an organization in the short-term, building resilience is an investment that must be made to enable long-term success. The time to act is now. Waiting to respond to the next unplanned disruption is simply not a viable strategy. An organization’s leaders should be energized and motivated to work jointly to build up and embed the resilience needed to survive and thrive. How best to do this will depend on the nature of each organization. However, irrespective of the specific, detailed steps, scenario planning, across the organization and its leadership team, is one of the most effective ways to prepare. This exercise should involve envisioning every imaginable scenario, working to identify vulnerabilities, blind spots, and gaps. In essence, the goal should be to virtually “break the organization”, to protect it from being broken in real life. Then once this list of vulnerabilities is identified, working collaboratively across regions and business units to determine how best to address each point and build the necessary agility and capability to minimize potential future disruption.

Laurels are not for resting on

It can be tempting, when it looks like the crisis has receded, to reflect on the successes and throttle-back a little. But resting on laurels is the antithesis of building resilience. It is when things seem to be going well that complacency can creep-in and future success can be taken for granted. Instead, this is the time to over-invest and make preparations for possible future disruption. Resilience demands an alert state of mind that is never satisfied with the distance travelled, it continually demands forward momentum. It is also important for organizations to be continuously and objectively assessed to find more ways to react faster, to diversify and to change direction with less inertia. Being caught unprepared could enable a more resilient rival to seize the opportunity and advance ahead of a less nimble field, making them look less relevant to their customers and stakeholders.

Maintaining optimal resilience always benefits from an objective external perspective particularly when the organization is experiencing a comparatively comfortable run (without the urgency to act that kicks-in during a crisis). Deloitte is uniquely positioned to provide such impartial counselling before offering clients just the right amount of hands-on support they need to help them become the resilient organization they aspire to be.

"It does not do to leave a live dragon out of your calculations, if you live near him

JRR Tolkien (The Hobbit)"

Seek out better ways to be more resilient

Plan ahead

The ultimate test comes when a crisis strikes and the adversary, whatever it may be, makes a game-changing impact. What now? How to recover and respond? To be confident of success there has to be a counterplan. With the right measures in place, together with optimal readiness and the ability to pivot, the resilient organization can be confident that it is as prepared as it will ever be to win the fight. These preparations obviously can’t wait until the night before, they must be carefully planned in advance. It is vital, therefore, to be proactive in planning for such an encounter, whatever it is and however unexpected it might be, to be ready and confident to face it, if and when it happens.

"It’s not the will to win that matters everyone has that. It’s the will to prepare to win that matters."

Resilience training

Resilience is expecting the unexpected, which means always being alert and ready for it. Athletes training for extreme events, stretch themselves beyond anything they’re likely to face, so they can confidently cope whatever might happen in the event. It’s the same for business. The most extreme scenarios need to be rehearsed and trained for so that the organization is pre-stressed and ready to deal with any whatever it is likely to face in the real world. And, like an athlete, it is not an option to skip training for a few weeks and still expect to be in peak form if the event is unexpectedly brought forward. Systems need to be kept primed, ready to rise to the challenge whenever it comes.

Covering for every eventuality

Some organizations appear to have thrived through the pandemic, not because they were agile and prepared, but because they were fortunate enough to have products and services that experienced a surge in demand from ecommerce websites and pharmaceuticals to PPE equipment and hand sanitizers. But there is still no room for complacency. These organizations simply have a different set of challenges to test their resilience such as coping with disappointed customers who, when demand suddenly outstrips supply, feel marginalized and undervalued when their needs seem to be ignored. Or they might have to respond to a flood of counterfeit products that emerge to exploit their supply gap while threatening serious reputational damage. Resilience planning needs to anticipate any eventuality and ensure that sufficient agility is built into the system to deliver the appropriate response. The next crisis could just as easily be a cyber attack, an unexpected consumer protest against certain products on health or environmental grounds, or a product embargo following a complaint about the treatment of workers somewhere in the supply chain. Resilience does not mean being impervious to these things but knowing how to spot the signs then respond swiftly with the right action at the right moment.

Deloitte can work with you to help plan for the unexpected. We can optimize your fitness for change and ensure you are in peak shape for whatever the future holds. With our lens of objectivity and broad scope of expertise we can be ready to add value immediately.

Resilience in an interconnected world

Global opportunity

Today’s interconnected global supply chains enable products to be sourced from, and sold to, practically anyone, anywhere in the world; so, when supply or demand rises or falls in one location, focus can be redirected onto another. The model extends across sectors and comprises anything from raw materials, commodities and labor to a range of globalized service categories. As an economic ideal this apparently seamless global marketplace looks supremely efficient. In practice, it is increasingly subject to threats from a growing number of social, geopolitical and environmental forces. These could include, for example, local or regional political or social unrest, border disputes, piracy, human rights embargos or new environmental constraints, any of which could at the very least raise costs, disrupt supply chains, or even close some vital markets altogether. Building-in the necessary resilience, that anticipates and can proactively respond to such eventualities, will define the winners of the next decade.

Global perspective

A global perspective means taking a fresh, holistic, view of the organization’s role in the wider commercial and social environment. For example, traditional boundaries between industry sectors have been blurring so that most large organizations now straddle a number of traditional categories. It is now perfectly possible, for example, to think of an organization as being as much a data company as a retailer or a logistics company; another might be a data company, a hospitality company and a travel company. Data is, of course, the lowest common denominator and will be the bedrock of nearly every organization everywhere.

Data represents an immensely valuable resource, essential for improving connectivity to various stakeholder groups:

• building trust with shareholders 
• increasing customer empathy and loyalty
  
• improving employee engagement
  
• developing stronger relationships with ecosystem and alliance partners

These are just some of the relationships that will fuel future growth.

Global trust

The rising sensitivities around data protection and cyber-security must also be considered when planning resilience-building activities. This points to probably the most vital element of all, in an ever more amorphous business and social environment, to build trust. As old boundaries soften between sectors, geographies and categories and even between commercial, political and charitable operations, trust will be the touchstone for the resilient organization. Trust must be engendered not just in customers and employees but across wide, interconnected stakeholder networks that have become so influential in driving company performance. There was a time when companies either did well or did good. With a holistic global perspective, it is entirely realistic to aspire to do both. As Confucius observed: “without trust we cannot stand”.

Global survival

Over the past year, as the pandemic struck global communities, it led to waves of social concern for the health of the planet. Paradoxically, reduced economic activity, also caused a drop in CO2 emissions and improved air quality in many of the most vulnerable parts of the world. International opinion polls have confirmed that concern for the environment has risen markedly and that there is a growing conviction that the human activities responsible for global warming and environmental degradation could, if left unchecked, threaten the survival of populations across the world. Consumers are increasingly acting on their convictions, reducing their energy usage, consuming less and recycling more to live more sustainably. They are demanding that big business does their part as well. This poses a range of resilience challenges for organizations everywhere. Is the supply chain as eco-friendly as it could be? Is the carbon footprint declining fast enough? How much has energy consumption fallen taking account of remote working? The list, of course, expands exponentially with deeper analysis as the number of fields under scrutiny rises. The resilient organization should anticipate a tightening customer grip on these issues, driven by increased political and consumer pressure and should act now to ensure that it is fully prepared for changing customer expectations and advancing legislation. It would also benefit from seeking objective analysis and validation to enable it to retain the stakeholder trust and confidence that it will need to thrive in the future.

Deloitte is a forward-thinking, global organization that spans all disciplines. We offer a comprehensive range of objective services to clients across the world to help build their resilience and enable them to thrive, whatever change is happening around them. We earn the trust of our clients and partners by making an impact that matters. Which is why we’re here for you.