Why resilience is the key to managing risk in 2017 and beyond

Why resilience is the key to managing risk in 2017 and beyond

The risk landscape we all face is becoming both more complex and much less stable. Building resilience into the organisational DNA is now a critical imperative for boards that take long-term sustainability seriously.

By Michael Davies, CEO, ContinuitySA

The point of departure for any attempt to ensure business continuity is obviously to identify what risks the particular organisation faces, and then put mitigation measures in place. That remains the first step because, as experience teaches us, the likely is … more likely to happen.

But boards need to recognise that experience is no longer quite as trustworthy a guide as it once was. The world has become more interconnected, both digitally and in terms of mass, often unanticipated movements of people in search of a better life. As a result, risks are much less contained than they used to be—because everything is increasingly connected, organisations can experience serious consequences from events that occur at a considerable remove.

One example would be the impact of a natural disaster, such as a tsunami or floods in South-East Asia, on the production schedules of American or European manufacturers, and thus on their clients. Nearer to home, student protests last year affected businesses near campuses, including some of our own clients who had to move staff to our work-area recovery facilities. In addition, the possibility that the Class of 2016 might not graduate was setting off alarm bells in the professions that rely on a steady stream of graduates.

In response, we at ContinuitySA have increasingly been preaching the gospel of resilience to anyone who will listen to us. Our point is that while an organisation must have detailed and specific plans in place to deal with the likely risks it faces, the real return on an investment in business continuity is improved resilience—in other words, the organisation is better equipped to react to any unforeseen and potentially threatening event, and to recover it.

In the strict sense, recovery means getting back up and running, but, as King IVTM reminds us, risk often has a flipside of opportunity. This is particularly true when a business model is being disrupted—a resilient organisation is better placed to respond to changed market conditions and new opportunities.

Next time: Having understood the need to build resilience in the light of the unexpected, what are the key areas to which a sensible organisation should be paying special attention?

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