- 2020 was an unprecedented year of global disruption which left some businesses unable to cope.
- New report by Deloitte Global reveals that companies with built-in resilience were better equipped to handle the crisis.
- We reveal the five key characteristics which could help businesses overcome future challenges.
The global financial crisis of 2008 taught leaders in both the public and private sectors many valuable lessons about readiness. But nothing prepared CXOs for the triple threat they faced in 2020—the confluence of a global health pandemic, social and political unrest, and worsening climate events. Mounting challenges during the year expanded the concept of preparedness in ways many leaders didn’t anticipate and pressured organizations in ways many couldn’t imagine.
Most organizations continue to struggle and many have been forced to cease operations, some permanently. However, certain companies have persevered, even succeeded in this unusual environment. And they’re not just the ones that happen to be in industries whose products and services are needed during crises.
Have you read?
Deloitte Global wanted to know which organizations possessed the cross-functional, strategic resilience and state of readiness that could overcome a worldwide challenge to consumer and B2B activity (and more importantly) why they were able to deliver. Therefore, we decided to focus our inaugural 2021 Resiliency Report on how organizations best survive ongoing, broad and unexpected disruption on the scale witnessed in the past year.
The survey of 2,260 private and public-sector CXOs in 21 countries revealed that successful organizations intentionally cultivate resilience and embed it in various aspects of their businesses. Those that make it a priority are not only doing better than their peers in the current environment, they also anticipate more robust growth in 2021.
Most global business leaders believe 2020 may not be an outlier. More than six in 10 of those Deloitte surveyed said they think we’re likely to see either occasional or regular disruptions of this scale going forward, and three-quarters of CXOs said they believe the climate change crisis is of similar or greater magnitude than the pandemic. Assuming they’re right, organizational resiliency is more critical than ever.
Those who acted early fared best
To get a sense of business resiliency before, during and after the disruptive events of 2020, Deloitte asked leaders to state which actions they had already taken or were planning to take—actions that suggest baked-in resiliency—in the areas of strategy, workforce, technology and societal impact.
We learned that taking early action matters and that resilience is as much about thinking ahead as it is about doing what it takes to respond and recover from a crisis.
Across the board, organizations that had implemented key actions prior to 2020 surfaced as leaders in resiliency. Typically, they already had invested in workforce initiatives like reskilling their employees or redesigning work. They had diversified operations and developed technological capabilities to drive new business models. They had adapted to remote working, kept employees safe and maintained trust between leaders and employees. Their organizations valued diversity, equity and inclusion and they were committed to improving the environment and strengthening communities.
Those who were actively planning investments in these processes showed some resiliency, but not as much as the pacesetters. Respondents who were not planning such investments, in the near future or ever, were most likely to be overwhelmed by the events of 2020. Some data variances were particularly stark. More than 80% of CXOs who said their organizations had done very well cultivating resilient cultures also said they are doing well weathering the events of 2020. But among those who said they had not done well at all building resilient cultures, only 27% were happy with how they fared in 2020.
Unfortunately, organizations that acted prior to 2020 were in the minority. Less than a quarter of respondents said they were already engaged in the most popular strategic actions to survive the challenges (assessing cash reserves, strengthening supply chains and removing organizational silos) before the pandemic. Not surprisingly, the events of the past year have moved more companies to act.
What is the World Economic Forum doing to manage emerging risks from COVID-19?
The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.
As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.
To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications - a companion for decision-makers, building on the Forum’s annual Global Risks Report.
Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.
The five characteristics of resiliency
Organizations that plan and invest in anticipation of disruption—whether it’s a gradual transformation or a sudden pandemic—are better positioned to adapt, rebound, and endure. Deloitte Global’s research identified five attributes of resilient organizations that enable and promote nimble strategies, adaptive cultures, and the implementation and effective use of advanced technology. Businesses that can bounce back from unexpected challenges typically are:
More than 85% of CXOs whose organizations successfully balance addressing short and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020, whereas fewer than half of organizations without that balance felt the same.
Leaders recognize the importance of having versatile employees. Flexibility/adaptability was by far the workforce trait CXOs said was most critical to the future of their organization.
CXOs indicated the importance of collaboration within their organizations, noting that it accelerated decision-making, mitigated risk and led to more innovation. Removing silos and increasing collaboration was one of the top strategic actions CXOs took before and during 2020.
Those who are succeeding are focusing on improving communication and transparency with key stakeholders, as well as leading with empathy.
Eighty-seven percent of surveyed CXOs who said they have done very well at balancing all of their stakeholders’ needs also felt that their organizations could quickly adapt and pivot in response to disruptive events. That’s nearly 50% higher than CXOs whose organizations haven’t achieved that balance.
These five attributes don’t just occur organically. They require desire, effort, investment and action to cultivate and maintain.
Leaders cannot be sure their organizations are truly resilient until they are tested by adversity. Last year presented organizations with the toughest and most important test most have ever taken and confirmed for some CXOs that their organizations are more resilient than they realized. Those that deliberately had built these resilient attributes into their mindsets and cultures were better positioned to overcome disruptions. They are the living examples that others should follow as we pursue a “better normal” post-pandemic.