Riding the momentum to build resilience for a customer centric organization

Today’s prolonged uncertainty and continuous disruption of the business and customer expectations is challenging leaders in an astonishing way. This change is more of an acceptance, than a paradigm shift. Positioning and sustained growth amid this VUCA environment is equally essential to build resilience. Resilience is an increasingly a prerequisite for corporate survival.

The dynamic pace of changes is making disruptions hard to forecast, even as the quantum and direction is uncertain adding to the complexity. Building up response capabilities in advance, is the way forward for bands to stay alive.

In contrast to the past, risk management then meant to focus on a small number of well-defined risks, primarily financial risks (if you recollect the dotcom & 2008 burst). Now the risk is encircling around the broader directive of resiliency management. The global pandemic and geopolitical tensions have made risk and resilience significantly more important to organizations.

So, what crisis response do you have for a resilience strategy?

Rather than hunting for the blind spots in risk coverage, resilient organizations grip on to the holistic view, in which resilience becomes a competitive advantage during the times of disruption. It will be beneficial to stimulate and use crisis scenarios to test for resilience during a downturn.

Last week I read McKinsey’s steps that briefly sketch a path to overcome pitfalls while systematically building and strengthening strategic resilience. The steps & I have taken the liberty to make it simple and customise for this how-to guide:-

• Measure resilience and start to report it internally. Taking a business-model view, review resilience dimensions regularly and systematically, identifying strengths and weaknesses compared with industry peers. This is the first step to know where we are & where we want to be. Critical for the business metrics to be in line with our long-term customer centric vision.

• Pick your disruptions. Choose a particular type of disruption to start with, then probe it deeply for expected initial impact and longer-term secondary and tertiary effects. What happens when a few lakhs of Indians share posts on social media during festivities? We are talking about a million posts, in a span of 10 hours. Is your app able to scale up? Define a mechanism for creating scenarios systematically & study the A/B analysis. What worked? What failed? Gaps? To show a customer an empathy is great during a crisis, but can we learn & avoid the crisis in the first place?

• Identify the organization’s natural strengths. Test strategy and underlying assumptions against different scenarios—for example, by deploying qualitative and quantitative scenario analyses. Numbers and the whys behind those numbers please. Test the strategy against the goals, your long term vision and the mission statement. Again any gaps? Which team can work on it? What resources needed? Budgets? Timelines?

• Define a portfolio of resilience investments. This step will entail revising short-term performance and corporate resilience strategies to enable longer-term profitable growth. Keep a balance between these, develop action plans for alternative futures.

• Build first-line capabilities in resilience; build personal resilience and resilience within teams. These efforts also better integrate people into the transition. Important is to align the team on the priorities of CX initiatives planned & rolled out & also of the larger organization’s strategic point of view.

• Create an early-warning system that monitors risks. Risk refers to the degree of uncertainty and/or potential loss inherent in a decision. The board should be involved, but crowdsourcing can be used judiciously, for a more secure view on the risks the organization is facing.

Research suggests that resilience leaders often go on the offense, especially during times of crisis. They are among the first to respond to trends and take decisive actions that radically depart from existing strategies, such as changing the business model, developing new products, or acquiring a complementary business at a time of low valuations. First movers assume some risk, but they also get a chance to shape their industry and gain a large market share lead. In highly globalized sectors, including most segments within advanced industries, such early moves can provide a particularly strong competitive advantage.

Inspiration/ Source: McKinsey’s Global Resilience articles & posts