Rebuilding with resilience: Deloitte report reveals how organizations can better prepare for future disruption; Climate change top concern among business leaders

• Most global CXOs believe the disruption seen in 2020 isn’t a one-off, and disruptions of similar scale – including those related to the climate crisis could come with regularity.
• While 2020 gave some CXOs confidence in their organizations’ resilience, a majority still don’t feel completely ready for the next crisis.
• Report identifies five “attributes of resilience” for organizations to cultivate in order to withstand future, ongoing disruption.

NEW YORK, NY, USA, 25 January 2021—Released today, Deloitte’s 2021 Resilience Report explores how organisations have coped with the tumultuous events of 2020 and identifies the traits that characterise a resilient organisation traits business leaders can cultivate in order to build greater resilience into their own companies. Deloitte’s survey of 2,260 CXOs in 21 countries confirms that organisations that plan and invest in anticipation of disruptions -whether on the scale of an isolated cyber-attack or a full-blown health pandemic are better positioned to respond, recover, and thrive. It validates the notion that acting early and advanced preparation matter, and offers proven lessons for increasing organisations’ viability.

As we move beyond 2020, rebuilding with resilience will become essential to businesses, as evidenced by Deloitte’s survey, which found that over 60% of global CXOs believe we could see occasional or regular disruptions of this scale going forward. However, less than a third of leaders feel completely confident that their organisations could quickly adapt and respond to future threats.

“Businesses have always faced disruption, but the challenges of the past twelve months have been uniquely unrelenting. The confluence of a global health pandemic, social and political unrest, and worsening climate events has presented organisations with tough choices, new ways of operating, and fundamental strategic shifts,” said Punit Renjen, Deloitte Global CEO Emeritus. “As we look to recover and rebuild, the road ahead is likely to be even more unpredictable. Organisations that plan and invest in anticipation of future disruptions will be better positioned to thrive.”

The “characteristics of resilience”

Deloitte’s research identifies five attributes of resilient organisations that serve as a strategic, operational, and cultural guidepost. Resilient organisations did not necessarily predict the events of 2020, but they withstood the immense pressures by enabling and promoting nimble strategies, nurturing adaptive cultures, and implementing and effectively using advanced technologies.

The survey suggests that organisations that deliberately build the following attributes into their operations and cultures are better positioned to overcome disruptions and help usher in a “better normal.” They are:

• Prepared.  Successful CXOs plan for all outcomes, both short- and long-term. More than 85% of CXOs whose organisations successfully balanced addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020; fewer than half of organisations without that balance felt the same.
• Adaptable.  Leaders recognise the importance of having versatile employees, especially after a year like 2020. To that end, flexibility/adaptability was, by far, the workforce trait CXOs said was most critical to their organisations’ futures. Nearly three out of four respondents from organisations that had implemented actions to make their workforce more adaptable-such as by training or reskilling workers, implementing worker redeployment programmes, or offering flexible working options-said their organisations are doing a good job at cultivating resilient cultures compared to just about half of organisations who didn’t have such programmes in place.
• Collaborative.  CXOs indicated the importance of collaboration within their organisations, noting that it sped decision-making, mitigated risk, and led to more innovation. Two-thirds of respondents who said their companies removed silos in their organisations before the pandemic reported managing the events of 2020 better than their peers. Technology was a critical enabler of collaboration throughout the pandemic. Just 22% of surveyed CXOs said their organisations had the technologies needed to facilitate remote working before the pandemic. Forty-two per cent developed and adopted these technologies out of necessity during the year.
• Trustworthy.  CXOs understand the challenge of building trust with key stakeholders, yet many did not feel they had lived up to the task. More than a third of respondents were not confident their organisations had maintained trust between leaders and employees. In the context of the pandemic, physical, emotional, and digital trust were particularly important. Organisations that prioritised the physical safety of their employees and customers, the mental health and morale of their employees, and the security of their data weathered 2020 better than those who did not.
• Responsible.  Most CXOs acknowledge that the business world has a responsibility beyond the bottom line. Eighty-seven per cent of CXOs who said they have done very well at balancing all of their stakeholders’ needs felt that their organisations could quickly adapt and pivot in response to disruptive events. That is nearly 50 percentage points more than the proportion of CXOs who said the same at organisations that haven’t done well at balancing their stakeholders’ needs.

Going forward with resilience: climate change seen as top issue for business to tackle

Sometimes leaders don’t know their capabilities until they are put to the test. Case in point, before 2020, only 24% of CXOs felt completely ready to lead through potential disruptions, and only 21% felt completely confident their organisations could quickly adapt and pivot, if needed. In the midst of the pandemic, however, these numbers jumped to 34% and 30%, respectively, indicating that the events of 2020 have given some CXOs a confidence boost about their organisations’ and their own-resilience. Yet, that still leaves 66% of CXOs who don’t feel completely ready to lead and 70% who don’t have complete confidence in their organisations’ ability to pivot and adapt to disruptive events.

That is concerning considering that global CXOs made it clear that disruption is not going away: Three quarters say they believe the climate crisis is of similar or greater magnitude compared to the COVID-19 pandemic. CXOs ranked climate change as the top societal issue for business to tackle over the next decade (47%), followed by health care issues and disease prevention (42%), and gaps in education and training (39%).

“The scope of these threats accentuates the urgent need for leaders to embrace all stakeholders and put the advancement of society at the heart of business strategy,” said Michele Parmelee, Deloitte Global Deputy CEO and Chief People and Purpose Officer. “While change and disruption will be a way of life going forward, leaders who implement the building blocks of resilience now will be best positioned to thrive going forward.”

For more information and to view the full results of Deloitte's 2021 Resilience Report, visit: www.deloitte.com/resilience2021.

Methodology

The Deloitte 2021 Resilience report is based on a survey of 2,260 C-level executives and senior public sector leaders, including CEOs/presidents, COOs, CFOs, CMOs, CIOs, and CTOs. The survey, conducted by KS&R Inc. in July-September 2020, polled respondents from 21 countries; 45% were from Europe/South Africa, 28% from the Americas and 27% from Asia Pacific. All major industry sectors were also represented in our sample. Additionally, KS&R and Deloitte conducted select one-on-one interviews with global industry leaders and academics.

All private sector respondents came from organisations with annual revenues of US$500 million or more, with nearly a third (31%) coming from organisations with revenues of more than US$5 billion. One in five private sector respondents had the title CEO/president, another 17% were CFOs, and 16% were CIOs.

Among the public sector leaders surveyed, 40% represented organisations and agencies with a budget of US$1 billion or more. Among the public sector leaders surveyed, 21% were CIOs and 19% had the title of director or deputy director.

Thirty-eight per cent of respondents were between the ages of 45 and 54, the largest segment represented. Twenty per cent of the respondents this year were women.