Feeling overwhelmed by the constant barrage of change? You’re not alone. Businesses are now grappling with a new reality. One of constant reinvention. Colin Gray, Managing Partner, Strategy at McCann Enterprise, a B2B specialist practice based in Birmingham, calls it ‘Resilience 2.0’. Here, he discusses how it’s not just about adapting in the face of disruption, it’s building capabilities for continual reinvention in the face of complex challenges. Resilience 2.0 is the key to thriving in this ever-shifting business landscape.
Since the pandemic, business leaders have been grappling with a series of geopolitical events and resultant market volatility. Elections around the world are also likely to have a significant impact on the direction of the global economy. With at least 64 countries going to the polls, we can expect not only changes in trade and investment policies but also a potential increase in uncertainty and political polarisation.
Geopolitical risks posed by elections and conflicts have inevitable knock-on effects on the economy – both globally and for individual countries. For businesses, these events have resulted in rising fuel prices, shipping costs and supply chain disruption.
At the same time, these disruptive events have acted as a prompt for continued evolution in government regulations and consumer expectations. Unfortunately, according to the World Bank, the frequency of these events is increasing. As a result, the concept of building resilience now needs a more sophisticated approach. While it remains the foundation of effective strategy, it’s no longer about weathering isolated storms. It’s about charting a course through a complex web of interconnected challenges and building long-term agility. Resilience now encompasses the proactive, as well as the reactive, to drive sustained success.
Businesses now need to be able to pivot and adjust strategies in response to unexpected changes in circumstances. This might involve embracing new technologies to drive efficiencies, adapting product offerings to meet evolving consumer demands or restructuring supply chains to reduce risk. In tandem, companies need to foster a culture of continuous improvement and lifelong learning. For example, GXO, a world leader in providing cutting-edge logistics and warehousing solutions, is not only introducing robots into its warehouses but also AI-powered technology to streamline operations. As a result, it has partnered with Multiverse to launch a 15-month data training programme. GXO has also identified a need to upskill its employees in areas such as data analysis as they roll out new technologies (real-time tracking, predictive analytics, IoT integration, etc.).
Marriott’s ‘Development Academy’ and McDonald’s ‘Archways to Opportunity’ are education initiatives designed to increase employees’ capabilities. By upskilling and reskilling employees, these programmes equip them with the knowledge and skills necessary to adapt to changing business needs. Walmart has taken similar steps but has explored ways to mitigate related costs by partnering with online learning platform, Springboard. Introducing a culture of continuous learning carries a cost. However, it does offer numerous benefits – fostering a more adaptable workforce in the long run and more engaged employees in the short-term. When employees are empowered to learn and contribute, resistance to change diminishes, fostering more adaptability and innovation.
According to EY, collaborative business models offer huge potential in enhancing adaptability, de-risking experimentation and accelerating innovation. According to its research, collaborative ‘ecosystems’ of strategic partnerships are an effective means of improving agility and innovation to drive sustainable growth. Its CEO Outlook Pulse Survey suggests that approximately a third of CEOs incorporate an ecosystem of business partnerships into their strategy – based on leveraging the core competencies of each business and harnessing the power of collaboration. The survey also highlights that 69% believe their current ecosystem is very important to their company’s success, which suggests that navigating the complexities of building collaborative business models can lead to significant rewards. Compare this to PWC’s CEO survey, which suggests 40% of UK CEOs believe their business will not be economically viable within a decade on its current course. This highlights the urgency for businesses to adapt and building Resilience 2.0 offers a framework for achieving this.
Nestlé, one of the world’s largest, most diversified food and beverages company, has invested in building relationships with suppliers in different geographic regions to adapt and diversify its supply chain. As part of its strategy of driving long-term growth, the company has sought to reduce reliance on any single source of supply, which makes them susceptible to future disruption. At the same time, they’ve invested in new digital technologies to enhance factory safety and prevent disruption before it arises.
Each of the examples outlined above will have significant investment behind them, which would have been informed by detailed cost/benefit analysis. So, what are some every day, practical steps that can be taken to build your company’s equivalent of Resilience 2.0?
You can start with something as simple as scenario planning. This involves considering different future possibilities and asking a series of ‘what if?’ questions to capture potential risks your business might face. These are then used to identify your biggest areas of vulnerability. Once these have been identified, work with your team to get diverse perspectives as you evaluate the potential impact of each vulnerability and develop creative solutions for how you might respond to them. This process should include related timeframes, data sources, reporting requirements and communication plans. Assess the merits of each creative solution, as well as capture associated challenges and opportunities. This process will not only help to foster a culture of risk awareness and mitigation, but also build a foundation for great resilience and equip your business with additional flexibility to thrive in today’s world of constant change.