Covid-19 was a wakeup call for many organizations. As a result of the virus, many companies were blindsided by interruptions in supply chains as well as shifts in demand and consumer preferences that wreaked havoc on their plans. In the midst of all this chaos, they were forced to reevaluate their business and innovation strategies to prioritize a new objective: resilience.
As we transition into the so-called “next normal”, the ability to adapt will be especially important not only because the business environment is becoming more dynamic and unpredictable, but also because we have witnessed the impacts of global occurrences such as a health pandemic.
Now that organizations have experienced how quickly disruption can occur, how can they better prepare themselves to weather unexpected future events? While creating resilience will look different for each company, activities such as investing in new technologies, cultivating an internal culture of innovation and being open to collaboration opportunities are key steps anyone can take to achieve this goal.
5 activities to build resilience
In the business context, resilience can be defined as a company’s ability to not only anticipate and prevent internal and external shocks to the organization, but to also understand, contain and recover from crises and ensure long-term survival.
Before the pandemic, most organizations had an insular approach to innovation by focusing their activities on the pursuit of increasing profits, maximizing efficiency and maintaining an edge over their competition. While this helped increase profit margins, and improve the quality of products and services, this narrow focus left many companies vulnerable to disruption.
Although we are not able to predict when or how future crises will occur, there are a few key activities that organizations can implement now to be better equipped in the face of unexpected events.
1. Invest in and adopt innovative technologies
New technologies such as Big Data, AI, Cloud and IoT have drastically changed the way organizations operate and help ensure their survival by enabling agility. As we shift towards remote and hybrid work models, resilient cloud and digital platforms are essential to keeping companies in business and profitable, as well as to help employees maintain productivity.
At Enel, we have been digitalizing our organization for several years. In 2019, the majority of our asset base and IT applications were digitized, making us one of the first European utilities to move all our operations to the cloud. This allowed our employees to become more autonomous and efficient by providing them with accessibility and automated operations from any location. Our investment in digital technologies helped us remain resilient in the face of the pandemic, especially as Italy was one of the hardest hit countries in Europe.
2. Test different controlled scenarios
Although it may seem counterintuitive to organizations that prioritize efficiency, it is important for companies to experiment with different activities, processes and structures, especially in moments of stability. Creating playbooks that map potential internal or external risks helps organizations test reactions to certain situations, and also understand which activity would help them quickly adapt in a crisis scenario. Preparing for risks provides key decision makers with the necessary tools and know-how to allocate resources, implement emergency processes and have stronger leadership in times of uncertainty.
3. Be open to innovation opportunities outside your organization
Collaboration is essential in today’s environment and companies can increase their resilience by working with other players: external organizations are a key source of innovation. This opens new avenues to create value by combining complementary know-how, expertise, networks and resources or by unlocking hidden potential in long-lasting relationships. These types of collaborations are effective beyond times of crisis, as they can help organizations find new ways to address challenges that go beyond their respective sectors.
One example of this is the Global Handwashing Partnership created by Unilever and Colgate-Palmolive. Through this initiative, the two competing corporations established a collaboration with various NGOs around a unified purpose – to promote handwashing and sanitary health in Africa and Asia. By leveraging complementary resources and expertise, the stakeholders involved generated mutual value. The NGOs were able to distribute health and sanitation products provided by the corporations, while Unilever and Colgate-Palmolive leveraged the established NGO networks and funding expertise in order to capitalize on the demand for sanitation products.
4. Prioritize the health, diversity and equality of employees
An organization that actively promotes wellbeing and diversity within its teams not only improves overall performance, but also helps maintain employee motivation, prevents burnout and empowers everyone to deal with change. In fact, a 2020 report published by Deloitte found that 82% of the CXOs surveyed said that by providing the necessary support resources, their employees were able to quickly adapt and respond to the disruptions caused by the coronavirus pandemic.
5. Cultivate an innovation-forward culture within the organization
Now, more than ever, it’s critical for companies to create a culture that embraces disruption. The same Deloitte annual report found that organizations that cultivated innovation-oriented cultures were three times more likely to weather unpredicted events and outperform their competition.
Furthermore, a joint study conducted by Deloitte and MIT Sloan Management Review reported that when companies encourage an innovation-friendly environment and provide the resources to innovate, employees have more confidence in the organization’s future. Ultimately, innovative cultures foster resilience by empowering employees at all levels of the organization to be better equipped to react to unexpected circumstances, both mentally and in their day-to-day activities.
As the world begins to recover from Covid-19, many businesses have declared that they intend to make their companies more resilient. While this takes time and commitment, the benefits of learning how to adapt to any situation far outweigh the costs. Forward-thinking organizations incorporate actions such as prioritizing the wellbeing of their employees, testing potential risk scenarios and embracing a resilient mindset to ensure long-term success and survival.