A new report released Nov. 30, 2015 by The Economist Intelligence Unit (EIU), on behalf of BSI, identifies a worrying gap in the capability of firms to maintain long-term growth. The global study of business leaders reveals that just one third (29%) trust that their firms have fully embedded resilience practices, and less than half (44%) expect it to be the case in three years’ time. This is despite 88% believing that resilience is a priority for their organizations and indispensable for long-term growth (80%).
The study, “Organizational resilience: Building an enduring enterprise,” finds that achieving the resilience to survive and prosper in the long-term is held back by a lack of skills and knowledge, insufficient leadership commitment and short-term financial considerations. It also highlights that cultural resistance and skills silos create weak-points and bottlenecks within an organization. Two fifths (39%) of business leaders struggle to secure business support for essential resilience measures such as information security, supply chain efficiency and corporate governance.
Just one in five (19%) European organizations have succeeded in fully embedding resilient processes, compared to a third in North America (37%) and Asia Pacific (34%). Worldwide, a third (33%) of larger organizations have resilient processes embedded across their business, compared to a quarter (26%) of those with revenues of less than $500M. Smaller businesses are held back by a lack of knowledge, whereas larger firms cite financial issues. Older organizations are found to be more likely to see the connection between resilience and long-term growth.
Resilience as a driver of business success is defined by the report from the avoidance of operational failures to a strategic enabler. Three fifths (61%) see it as a source of competitive advantage, with more than half seeing a very strong link between investment in this area and long-term financial performance. Firms interviewed for the report, including Fiskars, the 366 year old Finnish consumer goods company, explained that achieving organizational resilience is vital for long-term financial success. True resilience is found to come from strategic adaptability across all aspects of operations.
The report identifies six key features of resilient organizations:
- Proactive approach—a willingness to adapt before being forced to
- Dynamic leadership—support from the top of organization to embed process, CEO down
- Responsiveness to change—a willingness to listen to market needs
- Strong corporate culture—holistic inclusion and recognition of everyone’s responsibility and contribution to the business
- Keeping focused—possessing a clear vision, purpose and identity
- Long-term view—avoiding responding solely to short-term financial goals
To download a copy of the report: ‘Organizational Resilience: Building an enduring enterprise’, please click here.