The Keys to Corporate Resiliency

One of the most critical responsibilities of an executive is building corporate resilience through an effective crisis management process. Corporate resiliency is derived from three specific processes: awareness, action and preparation. Most executives recognize the impacts of known events such as, fires, floods, cyberattacks, workplace violence, etc., and have developed plans for dealing with such events.

Crises arise from being faced with an unknown or unimaginable event for which there is no mitigation strategy. The inability to effectively deal with an event, known or unknown, subsequently impacts reputation, employee morale and company value. 

Corporate resiliency, in its simplest terms, is an organization’s ability to return to a normal operational tempo — including throughout its entire web of suppliers, manufacturers, distributors, retailers, transportation carriers and the other participating partners — after some period of time following an incident. Creating corporate resiliency contains two unknowns that are imperative to understanding and developing an actionable planning process: What constitutes normal operational tempo? What is the period of time?

Awareness as it relates to resiliency is the process of establishing a clear understanding of normal operational tempo and identifying risk. What are the baselines, both qualitative and quantitative, of the critical inputs or outputs constituting normalcy? These can be environmental conditions, just-in-time delivery schedules, production or service expectations of clients, or financial solvency.

Awareness can also enable leaders to identify and handle unexpected, non-normative events and their subsequent solutions. In a recent World Economic Forum survey, participants were asked to identify situations or threats they believed had the highest consequences for their companies. They were:

• large-scale involuntary migration
• extreme weather events
• failure of climate-change mitigation and adaptation
• interstate conflict
• natural catastrophes
• failure of national governance
• unemployment or under-employment
• data fraud or theft
• water crisis
• illicit trade

The action process is the influencer of time. Time has an exponential impact on an organization, both tangible and intangible. Staff morale, internal and external trust, company value, and goodwill impartment are all influenced by time. The process of determining time then identifies the surge capacity required to: return to normal; identify the resources needed to accelerate the return to normal; and inform executives charged with the decision-making process with implementable options that maximize corporate strategies for recovery as well as impact value and reputation of the company.   

Once awareness has been established and actions taken, only then can an effective preparedness process begin. 

Once appropriate and effective strategies for mitigation of an incident are identified, emergency action plans should be developed for implementation during an event. Business continuity plans should be established after correctly identifying the business-essential and critical operations necessary to maintain as near-normal operations as possible during an event.

Crisis communications plans must be shaped to take advantage of known actions, timelines and pre-identified stakeholder groups, to better inform stakeholders and remain transparent during and after an event. 

Become aware, understand necessary actions and their influence on time, and prepare today for a crisis of tomorrow. Your organization’s reputation and value depend on it.

Ken Burris is vice chairman at Witt O’Brien’s.