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Why Business Resilience Must Begin with a Cultural Shift – SPONSOR CONTENT FROM FM GLOBAL – Harvard Business Review

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The robustness of economies, businesses, and communities across Asia has been sorely tested by Covid-19. Standard & Poor’s forecasts the pandemic will cost Asia-Pacific economies US$620 billion in total and permanent income loss, and the Asian Development Bank estimates 68 million jobs will be lost in the region. While the negative effects of the pandemic are profound, there may be a silver lining if it catalyzes a culture of business resilience.

The companies that will recover quickly from a crisis most likely have leaders who recognize that resilience is good business. A resilient organization structures its business to ensure that it can meet its minimum needs to survive if disaster strikes. Such a cultural shift can succeed only if it gets the full support of the board, executive management, and key stakeholders.

From Plan to Process to Culture

A business continuity plan (BCP) needs to set out alternative ways to manage critical processes, and the business must be able to implement them in the event of disruption.

The evolution from business continuity planning to business continuity management (BCM) demonstrates that static, scenario-driven BCPs are likely to be very limited in their ability to manage disaster in today’s complex world. Often, the process of developing BCPs has become more important than the plans themselves.

The business impact analysis remains fundamental. Identifying the critical elements on which an organization depends, and understanding the impact of losing these elements, enables an organization to allocate limited resources efficiently so it can develop alternative operational capabilities.

But a truly resilient organization must look beyond operations to its business as a whole. An increase in the cost of capital may render planned projects unviable, resulting in missed growth opportunities. A highly leveraged company facing a material decline in income will likely find survival harder than one that has maintained headroom. Market share losses can extend way past a disruption if customers leave.

Leading Resilience from the Top

Business resilience and continuity are not new concepts, but today more than ever, bringing them to life needs those at the top to drive cultural change. Covid-19 has brought heightened awareness of resilience at the board level, and the realization that ways of working once thought impossible have proved effective.

In practical terms, many business continuity professionals believe that having someone at the board level responsible for promoting resilience would be a positive step in developing a resilient culture. Such an appointment would give resilience and continuity a clear voice. Moreover, because a resilient organization invests to prevent disasters or reduce their impact, having a resilience officer would also lend significant weight to the investment business case.

Giving business continuity a voice at this level will elevate resilience above a purely functional or operational responsibility. Steps can be taken within the BCM process to align analysis with board and executive perspectives, as well as operational strategies.

To take full advantage of the opportunity presented by Covid-19, organizations must ensure that the lessons learned during the pandemic are not lost. Developing different ways of working to survive can be the resilience and business continuity strategies of the future. But this evolution won’t happen by accident or osmosis. Organizations must foster a resilient culture—starting at the very top.

Your business deserves more than a policy. It deserves a partner in risk management. Learn more about FM Global’s approach and portfolio of services that support our partners through times of uncertainty.

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