Building resilience in a polycrisis world

Promote a strong risk culture

Though the practices we’ve described can help any organization become more resilient, making the changes stick requires attention to company culture and how people work. This includes underlying incentives—formal or tacit. It’s true that bringing together a cross-functional team to identify risk blind spots can help tear down silos, but participants aren’t going to look terribly hard if they feel they’ll be penalized for the problems they might find. That’s why there needs to be a true culture of speaking up and identifying potential systemic failures.

Here are a few practical tips for leaders to make sure their companies don’t inadvertently improve financial performances at the expense of operational resilience or overlook the role their people play.

Manage up and down and side to side. Boards need to understand why the C-suite has changed the way it views existential risk and buy into the new approach, as it will affect investment decisions and even the compensation of the leadership team. C-suite leaders must ensure they communicate across functions, and, with a mandate from the top, the message also needs to be communicated throughout the business.

Focus on empowerment. When employees have power and choice, they are happier, better at their jobs, more innovative, and more likely to go the extra mile—beneficial traits for any organization seeking to bolster its resilience. Yet 43% of global CEOs in PwC’s 26th Annual Global CEO Survey admit that company leaders don’t often encourage debate and dissent. This needs to change.

Avoid the blame game. The CEO survey also found that 53% of CEOs said their company’s leaders did not often tolerate small-scale failures. This is decidedly unhelpful, as finding blind spots or vulnerabilities in the way we’ve described requires a close examination of small-scale failures. By embracing transparency and staying blame-free, companies are more likely to spot the weakness before it’s too late. Pre-mortem exercises that start with the assumption that a plan can fail can reduce overconfidence and help make finding weaknesses a strength.

Bring all the right people together. For risk to be looked at through a cross-functional lens, key people across the different disciplines—from IT and operations to HR and communications—need to become part of the conversation. Don’t make it hierarchical or siloed; instead, let all key people contribute their expertise and voice concerns when necessary. Only by integrating silos can there be true enterprise resilience. 

Set resilience KPIs. Being able to absorb shocks depends as much on rapid and decisive response capability as it does on pre-shock risk mitigation and preparation. Work out what is necessary to deliver key services and how long it will take to get them up and running—from end to end, across all the dependencies that are mapped. Set goals for activating backups and workarounds. Understanding the highly interconnected components of operations ensures that rapid responses are accurate, which is critically important when communicating to customers and the media alike.

Invest in preparing people. Effective crisis-management skills are developed through frequent exposure to the characteristics, pressures, and demands faced when disruption occurs. Leaders need to develop the relevant skills, mindsets, and behaviors to respond in times of crisis or disruption. They can do this through tech-based microsimulations or through simple scenario-planning discussions with key stakeholders. It’s an approach that builds the muscle memory required for setting strategy, making decisions, and managing stakeholders in an uncertain world.