How to Achieve Operational Resilience in a Competitive Marketplace

Operational resilience is the ability of an organization to survive and recover from disruptive events. This includes everything from fires to pandemics and cyber attacks.

In today's complex, competitive marketplace, operational resilience is a vital foundation for delivering value.

To achieve this, organizations must develop a multidimensional approach to operational resilience that extends across people, processes, technology, third parties, and governance. This requires extensive coordination, collaboration, and preparation.

1. Develop a Strategic Plan

A strategic plan lays out a business’s goals and objectives for the next one to three years. These are intended to guide the company and build team alignment.

A successful strategic plan should be reviewed at least once a year. This is a great way to check your progress and see whether or not you’re on track.

Resilient businesses can adapt and grow in the face of change. For example, if the primary market changes, a resilient company may be able to shift its product lines to meet this demand.

To achieve operational resilience, businesses need to develop a comprehensive strategy that includes all possible threats and dependencies. This will ensure that they’re able to deliver on their customer promises and remain competitive in the marketplace.

2. Establish a Resilience Board

Operational resilience is the ability of an organization to deliver critical services and meet customer expectations. It requires a strong strategy, robust systems, and a comprehensive approach to operational risk management that encompasses governance, change management, running processes, information security, and disaster recovery.

A resilient enterprise can recover its key business services from significant unplanned disruptions, protecting its customers, shareholders, and reputation, while also maintaining its financial integrity. But achieving this level of resilience can be difficult, requiring extensive coordination and collaboration between organizations, third parties, and ecosystem partners.

One way to build resilience is to establish a board that has a strong culture of agility. By fostering agile decision-making, companies can become more responsive to the rapid and disruptive changes that occur in the market and consumers’ demands and behaviors.

Another way to build operational resilience is to train the workforce on crisis scenarios and response plans that include natural disasters, cyber-attacks, workplace violence, brand or reputation crises, and other events. These training can help take the emotion out of a crisis and make it easier for employees to respond effectively.

3. Create a Resilience Strategy

A resilience strategy is an approach to achieving operational resilience in a competitive marketplace. It involves several factors, including avoiding single points of failure and user error in your IT network.

Resilience is a process that takes time and practice to master. Those with higher levels of resilience may experience a more natural tendency to bounce back from difficult experiences.

For example, if you’re driving on the highway and another car slams into the back of your vehicle, you can either become angry and start yelling at the other driver or take a deep breath and focus on the task at hand.

Similarly, resilient people don’t see themselves as victims of adversity; they have an adaptive mindset and can work to find solutions to problems.

In general, resilience is defined as a person’s ability to bounce back from traumatic events and negative situations. It can be developed over time with the help of a mental health professional or through the use of resilience-building techniques.

4. Implement a Resilience Framework

If you want to achieve operational resilience in a competitive marketplace, it's important to develop and implement a resilience framework. This can help you better understand your risk management processes and how to respond effectively to potential threats.

Resilience is the capacity of a system to withstand or recover from significant disturbances that threaten its adaptive function, viability, and development. It is a process that may include people, communities, institutions, or nation-states.

The resilience of individuals and communities can be influenced by the availability of specific resources called “capitals.” These resources include social capital, economic capital, political capital, human capital, and communal norms.

Individuals with good health (human capital), adequate insurance and savings (economic capital), a strong social network (social capital), and effective government infrastructure (political capital) are often well-positioned to cope with stressors that lead to traumatic events.

The resilience Activation Framework is designed to improve the activation of these critical resources, including health systems, social networks, and public infrastructure, after a disaster. While this can be beneficial in the short term, it will not necessarily improve mental health and resilience in the long run unless these resources are activated in a sustained manner.

5. Make a Resilience Budget

In today's competitive marketplace, resilience is a critical digital capability that will get companies through tough market challenges. To develop resilience, operations executives need to shift their focus from efficiency and throughput to market response.

The first step is to identify the most essential, critical services to customers. This will help you build resilience plans from a customer perspective and ensure that they are always met.

Next, you need to define how disruption will affect your business. Disruption can take many forms, including natural disasters, cyber-attacks, and third-party risk.

Resilience can also be affected by your firm's ability to recover from a disruption event. This can be done by modifying your operational processes, procuring substitute links to "workaround" a disruption, or both.

Resilience should not be treated as a one-time box-tick exercise but as part of your business's DNA and culture. You need to make sure that everyone in your organization understands why operational resilience is important, what they need to do to achieve it, and how it will benefit the company.

6. Create a Resilience Implementation Plan

A resilience plan is a holistic strategy that identifies vulnerabilities to climate change and other hazards. It includes both short-term adaptation solutions (e.g., improving local infrastructure) and longer-term goals for reducing greenhouse gas emissions.

The development process of a resilience plan should involve input from the community to identify problems and strengths that can be addressed. This process can help to build relationships and community trust, promote equity, and address underlying social and economic inequities that contribute to a community's vulnerabilities.

It also requires whole systems approach vulnerability assessment that draws on the cultural wisdom of the community, aims for desired outcomes at every step, and involves collaboration across sectors and disciplines. This can be accomplished by working with community leaders to create collaborative spaces where people feel safe to discuss past traumas and the problems within their communities.

In addition to building the capacity of communities to build resilience, government agencies should incorporate climate resilience into their policies, programs, and regulations. This can include developing resilience action plans and incorporating climate resilience into urban and land use plans.

7. Create a Resilience Monitoring Plan

The ability to achieve operational resilience in a competitive marketplace is critical for many companies. While it's easy to take a reactive stance to IT challenges, a proactive approach can help keep the "known unknowns" in check and strengthen the continuity of critical business functions.

Resilience requires a comprehensive understanding of the interlinkages between people, processes, technology, data, third parties, facilities, and operations within your organization. The right multi-layer risk strategy can help you identify and control risks across these domains.

A resilient organization develops business models that adapt to significant shifts in customer demand, the competition landscape, technological changes, and the regulatory terrain. This involves balancing short-term financial goals with longer-term profitability and building first-line capabilities that enable employees to adapt quickly when disruptions occur.

To create a robust monitoring plan, organizations need to establish a system that can detect, measure and report on the impact of disasters, climate change, and other significant events in real-time. This is important because it enables the identification of early signs of disruption and provides a means of alerting the organization to its vulnerabilities.

8. Create a Resilience Monitoring Report

A resilience monitoring report enables leaders to assess and track the impacts of resilience-building projects. It can also help them make decisions about project implementation and funding.

Resilience programs are a critical part of any firm’s overall business strategy. They help to protect against risks, but they also enable companies to thrive in new situations and shape the competitive landscape.

For example, a 2020 global business analysis reported that firms that prioritized resilience in their supply chain had up to 60% shorter product development cycles and were able to expand their output capacity by up to 25%.

In contrast, organizations that don’t prioritize resilience in their supply chains often struggle to restore functionality and performance rapidly following a disruption. That is because they view the events they encounter as infrequent and ad hoc, rather than inevitable and necessary.

Operational resilience must be viewed as a fundamental part of the firm’s DNA and culture, with all staff playing their part in achieving it. It should be considered a cornerstone capability, supported with investment in skills and technology that empower everyone in the ecosystem.