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What is Operational Resilience?

The world as we know it is dynamic, and the global pandemic has emphasized the fragility of human and organizational operations in the connected world of today. Companies are not only trying to recover from the drastic changes of the pandemic, such as remote work, but from the impact of the shifting risk landscape and how it has affected their business goals and outcomes. With an eye on the importance of riding the waves of disruptions and change we see today, organizations need to achieve operational resilience to survive.

Operational resilience is the ability of an organization to absorb and adapt from any threat or unplanned disruption. It is a coordinated, consistent, and automated approach to business continuity that goes beyond recovery of internal processes to focus on external services and product delivery. Operational resilience includes traditional elements of IT disaster recovery, planning, testing, and execution, that allows for a swift response during crises to protect an organization’s ongoing operations but takes steps closer to the overall business objectives and strategies.

An organization that takes time to construct a solid risk management strategy will thrive in this age where business risk is increasingly connected. Therefore, integrated risk management is the foundation for operational resilience. An organization that has achieved operational resilience will continue to function properly and achieve its goals even amidst interruptions.

While the burden of resiliency is one that every employee should carry, senior management should focus on assessing and understanding the risk levels of the organization and its readiness for disasters and unexpected scenarios. Gartner predicts that by 2025, “70% of CEOs will mandate a culture of operational resiliency to survive coinciding threats from COVID-19, cybercrime, severe weather events, civil unrest, and political instabilities.”i Our whitepaper, “The State of Integrated Risk Management” discusses the importance of resiliency starting top-down from leadership.

Communicating Operational Resilience in Your Organization

To effectively and optimally manage risks, organizations must adopt a holistic approach to overseeing every aspect of the multiple risk management functions. Usually, organizations carry out risk management in silos; each department deals with its own risk management and possible disruptive scenarios. Occasionally effective, this method is not ideal for companies that seek to thrive in the long run, especially in their digital transformation efforts. The silo method does not take into account the risk assessment of the company as a whole. Any risk assessment done in any sector is only as effective as that sector deems fit. Uncoordinated, ad hoc processes can leave a business vulnerable and recovery plans ineffective.

Operational resilience deals with assessing and understanding the risk tolerance levels in every sector - to proactively manage risks throughout the organization. Resilient organizations look at both internal and external risks as they understand that risk can also originate from third parties. They have risk management plans in place for any disruption, whether cyberattack, natural disaster, or global pandemic.

Companies with operational resilience also must consider risks beyond their own four walls. They know that good communication is imperative to coordination. When a disruption or threat arises, senior managers must convey information to every party involved, including disaster recovery and crisis teams and, if necessary, consumers. Internal and external communications are incredibly important in risk management to reduce impact and maintain business continuity. An organizations’ resilience can be improved by ensuring visibility and communication with the following:

  • Clients

  • Stakeholders

  • Distributors

  • Vendors

  • Suppliers

  • Partners

  • And every other set of persons that can have an impact on the organization.

Interdepartmental communication is crucial to the success of shifting from a reactive to a proactive risk management structure. Operational resilience is a cultural mindset change that drives the implementation of resilient practices throughout the business.

How to Embed Operational Resilience in an Organization

There are some integral steps that organizations must adopt to transform from recovery to operational resilience.

Adopt a Holistic Perspective to Viewing Organizational Risks

Organizations should consider both internal and external factors that can have a direct or indirect impact on the organization. Take into consideration the people, technology, programs, and processes, etc. associated with the business. An effective enterprise risk analysis must consider risks across every sector and division of the organization. This strategy enables employees and teams to come together to envision potential disruption scenarios that may arise.

Design a Comprehensive Risk Assessment System.

To manage risks, organizations must be able to access and predict possible risks scenarios. This is where communication plays a major role, as everyone in the organization must be informed about evolving business priorities that inform recovery and response processes. When members of the organization are on the same page, potential threats and interruptions can be properly analyzed, understood, and documented. Consider the upstream and downstream dependencies, systems, and processes, and how your team plans for them.

Identify Possible Failures in Existing Processes and Remedy Them

While every failure that may arise from existing processes may not need to be documented, it is critical to identify key scenarios and focus on the capabilities that prepare for those specific scenarios AND related, derivative, or similar situations. Assess different threats levels and types to proactively plan against them. An effective program must include a cycle for learning and improving processes, so it’s important to bring the continuity and recovery professionals managing day-to-day incidents or planning and testing for crisis events together,

Operational Resilience and The State of Integrated Risk Management

We want companies like you to benefit from the risk management lessons learned by our customers during the height of the global pandemic. In our State of Integrated Risk Management report, we outline the key discoveries and insights garnered from those who thrived despite the worldwide upheaval. Get the whitepaper now to read more about the four themes affecting organizations today, and how your business can benefit from an integrated risk management strategy focused on resiliency.

Archer’s Business Resiliency Solution

At Archer, we can help you scale through uncertainties and digitally transform your business to the next level through strategic decision-making.

Contact us today to discover how to improve your organization’s operational resilience to make your company better suited to handle risks, improve business outcomes, and ease your digital transformation process, especially during times of disruption.

i Gartner: Predicts 2021: Operational resiliency. January 2021.


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