How organisations can be resilient in the face of constant crises

From ad hoc response to truly “ready for anything,” boards and their organisations are setting aside the traditional business continuity plans to focus on enterprise resilience.

A fire in a sub-station causing a catastrophic power outage. A cyberattack paralyses operations of an organisation. A major storm deprives a business of power, water and telecommunications. A pollution incident leads to the closure of a key manufacturing facility. A product defect leads to massive recalls. A public health emergency causes a shutdown of key operations. Imposition of tariffs by a major trading partners requires supply chain reshaping.

These are all examples of real-world crises that have affected major corporations in the recent past. While they may take many different forms, they all create an urgent call to action that goes beyond the normal course of business.

In the age of permacrisis

It is probably fair to say that organisations today have moved from a phase of multiple interconnected crises to one where a crisis never seems to end. We have now entered the era of the permacrisis, an extended period of instability and insecurity, often resulting from a series of catastrophic events. Simply put, it is the experience of lurching from one unprecedented event to another.

In this environment, boards and management teams can no longer afford to think in terms of traditional one-off business continuity as doing so leaves the organisation in a constant scramble to put out fires with outdated plans. Instead, we increasingly see leaders shifting to a resiliency approach that enables more effective capabilities with less stress on the organisation.

When a crisis hits, the typical approach has been to attempt to apply a playbook based on how previous business disruptions were handled. But there is no such thing as a standard or textbook crisis. Each event and its consequences tend to be unique in their own way. Instead of making organisations ready for anything, this limited approach forces organisations to improvise for each new crisis, expending scarce resources in the process. Worse still, it can lead to flawed decision making and missteps as the people involved are operating in unknown territory.

Increase in frequency of unexpected events

A different approach is required in the face of ever more frequent crisis events. That approach is to build resilience, the ability to continue operations in the face of severe disruption.

This is particularly important in light of events like the recent Heathrow Airport closure. In that case, a highly improbable fire at a key substation cut off power to the airport and caused massive disruption to passengers and trade with reverberations continuing for days after the 16-hour closure.

This was an example of what is commonly referred to as a Black Swan event. Something with extremely low probability of occurring but with various serious impacts when it does. But such events may become more frequent and less improbable. Climate change is leading to more extreme weather events that could interrupt power supplies through floods or lightning strikes, for example.

We are also seeing other catastrophic and once rare events occur with greater frequency. Cyber breaches, IT outages such as CrowdStrike, and weather events like Storms Éowyn and Darragh. Each brings with them the potential to compromise an organisation’s ability to do business.