• Patrick Potter

Operational Resilience is Necessary to Thrive Amid Disruption

Updated: Sep 9

The world is fast becoming a more turbulent place and disruptive events are occurring more frequently and they are less predictable as the following McKinsey study shows. The recent public health crisis, coupled with a consistent increase in cyber-attacks, natural disasters, geopolitical conflicts and a myriad of other events are causing organizations to reflect on the need to evolve from just being recoverable to becoming resilient – which is the ability to absorb disruption and not only continue to deliver on strategic objectives, but to quickly adapt and prosper.

Surviving disruption is not the only reason to build a resilient organization – operational resilience is a required trait in business today. Competition is fierce, shareholders require consistently strong returns, the public and many investment funds demand that organizations be socially conscious and actively engaged in contributing to the greater good. As a result, organizations can’t afford to operate in a reactive mode – these demands require that organizations be resilient. Resilience is good business practice as illustrated by a McKinsey study performed after the 2007 financial crisis which showed that resilient organizations emerged from the crisis more quickly and stronger and not only out-performed non-resilient organizations, but the S&P 500 index well after the recovery period.

A Harvard Business School study broke resilience down into attributes that include being adaptable, prioritized, data-driven, aligned and continuously improving. These attributes contribute to being a well-performing organization. Building a resilient organization focuses on what the organization does to provide products and services to its end customers, and the interdependencies. Organizations quickly learn that building resilience across an intricate, interconnected organization with many interdependencies is complex and expensive. A challenge is not creating more cost as you build resilience but developing an approach that provides a return on investment on your efforts over the short to medium term. In this respect, building resilience must be somewhat self-sustaining. Risk management is also an integral part of building a resilient organization because as new risks emerge, the organization must be prepared to identify, assess, treat and monitor them and their effects on the organization.

Turning the strategic objective of building a resilient organization into real results can be a challenge. It takes executive focus, a programmatic approach that aligns risk, resiliency, compliance, and third-party management teams, and drives active participation across the organization. The underpinnings include prioritization, planning, coordination, engagement, and constant improvement to drive the actions that will result in building a resilient organization. Learn about how Archer Operational Resilience solution can help you build a resilient organization.