5 key steps to building organisational resilience

12 October 2021 Consultancy.uk 9 min. read
Profile
More news on

As companies around the world look to strengthen their organisations following a pandemic and a global recession, a new report has found the five key factors for business resilience. The study found that best-practice organisations know their customers’ ecosystems; empower their staff for change; take a competitive advantage from data centricity; use technology to boost their agility; and have simplified governance to support fast decision-making.

For its latest benchmark study, BearingPoint analysed more than over 5,000 client projects, before building a model based on qualitative questionnaires, and using this methodology to quantify organisational resilience based on five observed characteristics. When those five fundamental areas were aligned, the researchers found that companies and public organisations were positioned to thrive when faced with change, disruption and extreme events.

Speaking on the firm’s formula for resilience, BearingPoint’s Global Leader of Markets and Networks, Matthias Loebich, said, “We determined that five characteristics, when aligned, set successful companies apart, and that’s when the magic starts. I want to stress that all five characteristics must be present and weaved together for an organisation to be resilient. Similar to a cable, a company’s strength is when the strands are woven together. Or, to use another picture: if you don’t wire the five characteristics together the plug simply does not work and the device won’t turn on.”

5 key steps to building organisational resilience

Ecosystem Insight

The Covid-19 pandemic has highlighted the importance of supply chains in helping organisations to deal with demand surges and supply shortages, and as a lever for agility. Global markets could forfeit as much as $5 trillion in economic losses, if they do not adapt their ecosystems in the wake of the Covid-19 virus – and looking to best-practice organisations could be key to this adaptation.

According to BearingPoint, leading organisations respond to changing customer dynamics, complex supply chains and competitive landscapes and then delight their customers by delivering completely via multiple channels. Illustrating how this looks practically, the researchers noted a case study, where a regional wholesale and logistics player showed the ability to be flexible and respond under pressure to customer demands during volatile market conditions.

“The company had already embarked on a rolling transformation program pre-pandemic,” the analysts noted. “It understood that only by investing in technology, process improvement and the development of digital competencies would they fully understand their customer’s needs. They also needed to generate meaningful insight from their existing customer and supplier data to empower them to act quickly and decisively. Therefore, by focusing on changing customer preferences and sales efficiency before the pandemic, the firm was able to pivot quickly to reorganise their supply chain and enhance client delivery during the crisis to great success.”

People Empowered

Similarly, an Agile approach to working has proven more valuable than ever during Covid-19, throwing it into the spotlight for global businesses – as it has allowed them to adapt quickly to the changing environment of the pandemic. One central aspect of Agile is that organisations must empower their people to work with maximum flexibility and minimum constraints, to optimise their performance and to do their best work.

BearingPoint’s research suggests that resilient organisations are especially good at empowering their workforce: so much so that they differentiate themselves by exhibiting a people-focused culture in everything they do. As a result, their transformation and change programmes include a significant level of people-focused projects and initiatives, which have yielded tangible results in both improved employee experience and business performance. A good example of this was cited by BearingPoint, in the form of a leading European consumer electronics retailer faced the collapse of footfall in stores, while experiencing growth in online sales.

The brand moved quickly to remove standalone stores, scale up ‘click and collect’ fulfilment – but the success of this hinged on moving to a flatter management structure, and empowering in-store frontline colleagues. BearingPoint noted that the company did this by developing a technology-enabled initiative for in-store staff to provide video support to online shoppers, at quiet times in-store. This offered customers “a rich online experience, enabling the company to fully utilise in-store staff,” and develop in-built resilience.

Data Centricity

Data has long been a key asset and critical success factor in a number of industries. The retail industry for example had used it to track customer demand and preference to compete amid an over-saturated market. The most successful businesses, have proven to be those who effectively use data across the organisation and learn from others.

Beyond the retail industry, businesses are also adopting data centricity to bolster their resilience. BearingPoint found that the most resilient companies utilise quality data insights from multiple sources to ensure the right decisions are made, execution tracked, and alternatives uncovered. These firms have “total understanding of their data assets, quality, usage and ability to generate insights,” which they can use to create real-time data for real-time actions, focusing on leading indicators to capture trends, “all of which enables them to respond to changing market conditions.”

BearingPoint noted that Leinster Rugby (LRFU) was a leading example of this kind of data policy. LRFU recently performed a ‘Digital Leaders Study’ focusing on how the club interacts with its fans through digital channels, before benchmarking it against other leading global sporting brands. Using the findings the club has implemented a new CRM solution that manages customer data and supports interactions with the fans and other stakeholders – but beyond that, the club plans to use such insights to deliver Virtual Reality user experiences – giving it a competitive edge compared to the digital fan experience rival clubs offer.

Technological Agility

IT departments are coming under acute pressure at present. Rapid digitalisation to adapt to pandemic working has seen many having to deliver new tools to support changing demands quicker than ever before. Illustrating this huge workload, on average, one white paper from McKinsey & Company found that digital offerings have bypassed seven years of progress in a matter of months.

However, if companies are to sustain this remarkable leap forward, it is important that they realise how IT and business units can collaborate – using the newly delivered technology to boost agility throughout the organisation. BearingPoint asserted that resilient organisations foster such collaboration to increase the effectiveness of both current technologies and to support investment in value-adding technology. Exemplifying this in practice, BearingPoint acknowledged how a large European-based bank had become more collaboratively organised, to make quick decisions based on an agile structure built around empowering cross-functional teams.

The researchers stated, “The bank, months before the pandemic, reorganised its rigid organisational structure, transforming it into an agile building block structure constructed around identified value streams, as well as product or service groups. The agile teams within the building blocks are cross-functional and consist of both bankers and IT staff. As an initial positive consequence, the bank has managed to significantly streamline its existing processes, making necessary decisions more quickly in a decentralised manner, re-motivating longstanding employees due to greater co-determination, more targeted use of existing knowledge and increased responsibility.”

Simplified Governance

A truly Agile culture cannot exist in a company if a governance structure still exists which ensures the top-down micromanagement of an organisation. If companies are to really respond quickly and proactively to new challenges and opportunities, they need to create a governance structure that empowers, rather than impedes, front-line staff.

BearingPoint noted that the top 150 organisations of its study featured leadership which was understanding of the need to act swiftly, first by clarifying the overall strategy and direction, then weaving empowered decision-makers throughout the enterprise. These companies updated and integrated portfolio management into their strategy, and add new priorities like sustainability, as a result these nimble players are already moving to capturing market share or respond to threats, learning from other segments and companies to identify the right tactics, technology and investments that support strategy execution.

One large global transport listed company with an existing digital agile model exemplified this approach, responding to market volatility by increasing its speed of internal decision-making. The firm cut back on internal bureaucracy, and used a data-driven approach to transform group performance. For example, the finance department shortened the budget cycle by five or six weeks, enabling better and faster decision-making by each department. Due to these changes, BearingPoint said that the firm’s senior leadership saw timely outcome output-driven metrics (OKRs) that enable better decision-making, plus increased productivity and employee satisfaction by reducing the budget cycle iteration burden.

Commenting further on the firm's findings, Damien Palacci, Global Leader Consulting Portfolio at BearingPoint, noted, “We see the critical differentiator as the ability to quickly adapt and change tack in the game. To make swift, calculated decisions under pressure, to demonstrate excellent processes and systems responding to the scoreboard and the clock. But ultimately, it will be people who deliver the win.”