Rethinking the concept of resilience in business in the post-COVID world
The coronavirus (COVID-19) pandemic is the biggest public health crisis in a century and has caused the deepest economic recession of the modern era. The pandemic has revealed vulnerabilities in public health systems and social safety nets around the world, brought vast inequalities to the surface, and demonstrated how major disruptions can snowball through interconnected systems. More crises await, from domino effects stemming from COVID-19 to the full impact of climate change and other disruptions of the natural systems on which we rely. Some crises will inevitably arrive as “black swans,” without warning — but many others will be what author and policy analyst Michele Wucker calls “gray rhinos” — highly probable, high-impact threats that we know about but tend to ignore. All chief executives should anticipate at least one major shock during their tenure and prepare and lead accordingly. Although there is a growing body of analysis concerning the effects of COVID-19 on business, most of it is still focused on the immediate response. In a recent issue brief, therefore, our organizations explore how companies can improve their long-term thinking and planning, and better prepare for similar future events.
Our work builds on discussions with members of the World Business Council for Sustainable Development and a series of interviews with firms headquartered in Asia, Europe and the Americas. It also incorporates insights regarding the pandemic’s impact from the 2020
GlobeScan/SustainAbility Leaders Survey, and further draws on a broader review of long-term resilience and business responses to COVID-19. The brief highlights three key lessons for businesses. Firstly, we cannot hide from gray rhinos or black swans. Companies must prepare better for known and unknown threats — in part by returning slack to our systems. Secondly, businesses need to embed resilience, once established, more deeply in their language and, especially, their practice to prevent it from atrophying. Firms that do so will be able to anticipate and prepare for all future scenarios, minimize the impact of the shocks that do hit, and recover more quickly from them. Thirdly, companies can build greater longterm resilience through improved approaches to corporate risk management, human and social capital, and environmental, social and governance (ESG) information.
Resilience is less about maintaining a steady state than about adopting agile, dynamic and transformational behaviors and actions in response to pressure — in other words, being adaptable. This in turn requires firms to emphasize purpose and values in leadership, improve stakeholder engagement, and redesign supply chains. But above all, firms must embrace longer-term thinking and new and sustainable business models and behaviors. COVID-19 is forcing firms to reimagine resilience. Instead of trying to strengthen their ability to resist change, companies must learn how to adapt and adjust if they are to continue to exist as employers, value creators for shareholders, and trusted members of communities.