Is your company ready for the next crisis?

As we forge into the New Year, things don’t look any more certain than they have the past few years. This doesn’t need to be a source of anxiety for leaders; however, it could be where you draw your inspiration. If you haven’t already started, your focus should be on building a resilient organization, one that can weather the volatile environment and adapt quickly to changes.

Just as we are thinking about how to handle unpredictability, we should also not dismiss the things that can be predicted. Many threats and disruptions are actually easier to predict than people imagine, yet we tend to overlook them as they don’t bother us most of the time.

Black swans and grey rhinos

Black swan events are devastating and rare events like the pandemic. Grey rhinos, on the other hand, are all around us most of the time. These include such things as geo-political conflict, inflation, recession, natural disasters, and cybersecurity issues. Both black swans and grey rhinos can be proactively managed.

The exercise

There are three key capabilities companies need to build up resistance to black swans and grey rhinos. Consider the following capabilities consider where your company stands with each of them:

1. Agility

This is the ability to sense threats and move quickly to avoid them. Has your company been able to pivot fast in the past? Have you taken a hit in the past from threats you should have seen coming? What have you done to detect threats sooner?

2. Robustness

This is your organization’s ability to minimize damage when a negative impact is inevitable. Is your company able to take a hit and keep going?

3. Resilience

This is how quickly your company is able to respond to events by proactively adjusting your operating model. What is standing in the way of your organization’s ability to change strategy quickly? How can you remove these barriers?

How you assess your development within each of these capabilities should indicate where your company needs to focus to build readiness for the next crisis and evaluate where you may need to direct some resources. Digital tools and technologies can improve resilience to shocks by enhancing sensing capabilities, promoting learning, and modularizing resources.