In the midst of the current pandemic, we have all become much more painfully aware of the fragility of supply chains, health care, and other critical systems. Many CEO’s have announced their intention to rebuild their businesses more resiliently, but not many know exactly how to go about accomplishing this task. Very few business schools teach resilience, and today’s managerial toolkit is primarily focused on financial performance management. As a result, very few organizations are able to explicitly design for, measure, and manage resilience.
Resilience as a company’s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances. Resilience is especially important because today’s business environment has become so much more dynamic and unpredictable. This is a result of several enduring forces stressing and stretching business systems — from accelerated technological evolution to a greater interconnectedness of the global economy to broader issues such as rising inequality, climate change, etc.
There is no better example of system stress than the coronavirus crisis. Humans impinging on the natural environment have enhanced the risk of cross-species infections. Dense urban populations facilitated the rapid initial outbreak of the disease. International travel facilitated its global spread. Extended global supply chains have broken down. Economic activity has been massively disrupted, and inequalities and social tensions have been exacerbated.
Crises like this one present an opportunity for change. With Covid-19, companies have a unique opportunity and necessity to revisit their business models to build greater systemic resilience. The author of this article presents the following six actions as a place to start when building resilience:
With the mainstream of business education and managerial practice focused on managing performance, resilience represents not just an opportunity to mitigate risk, but also an opportunity for competitive advantage. Andy Warhol famously said that in the future, everyone will be famous for 15 minutes. In today’s business world, transient high performance is commonplace; it is sustained performance by resilient companies that stands apart.