Saying ‘I Do’ to Resilience—10 Potential Barriers to Business Bliss
An innovative and successful organization is increasingly one that is resilient. Consider these 10 trouble spots that every organization needs to consider…for better or for worse.
My wedding nearly got rained out, and it wasn’t even outside. Two days before our big day, an aging sprinkler system soaked the venue, leaving it unusable and not up to code. I didn’t panic. Instead, I got to work because disasters are what I do for a living.
Running a non-profit that helps organizations prepare for and recover from disasters, I get asked all the time how companies can become more resilient -- how resilient organizations can adapt to the changing political, economic, and environmental realities of 2016 and beyond. The simple answer is to expect the unexpected. Know that you’re going to get thrown a curve – that you can get rained out even when there’s not a cloud in the sky.
What’s harder is to be prepared to respond and recover when the unexpected happens. Preparation ensures that your business and your community will act in an informed and responsible way that will better protect your people, core competency, and resources.
To be ready, you need to know your risks. However, according to the 2015 International Business Resilience Survey, a joint survey of C-suite executives and resilience managers conducted by Disaster Recovery Institute (DRI) and Marsh, organizations are better prepared to face traditional rather than non-traditional risks and are becoming increasingly nervous about the changing risk landscape.
But don’t let the fear of the unknown give you a case of cold feet. Consider the following 10 factors when building a risk-aware program for resilient organizations and communities:
1. Aging infrastructure will cause problems to the built environment.
Our infrastructure is in a dire state of disrepair, which could have a negative effect on the economy as a whole if it impedes the efficient flow of business. There is a gap between reasonably successful private sector efforts to maintain the infrastructure under its control, and the federal government’s willingness to fund necessary upgrades. Bottom line: We are failing to make the infrastructure upgrades necessary to ensure communities will be resilient in the face of disasters…and I’m not just talking sprinkler systems.
2. Aging IT systems will create vulnerabilities, too.
Outdated and patched systems are vulnerable to cyberattacks. There is an increased reliance on technology, but not every business can afford the latest and greatest, especially small businesses -- the single largest employer in the U.S. The DRI-Marsh survey found that leading businesses consider cyber and technology risks to have the greatest potential impact on their operations and to have the greatest likelihood of occurring.
3. Expanding supply chains mean more vulnerability.
Very few companies produce products in-house anymore. Rather, they are built by a network of suppliers and external producers, each responsible for different components. This is true in both goods and services. Traditional risk management programs are focused on company problems and may even include direct suppliers, but very few incorporate third-party suppliers and other linked risks. It’s time to review those contracts and even engage in exercises with those upstream companies. I wish had before the big day.
4. Supply chain risk can be malevolent.
Supply chains are already vulnerable because of their complexity. Now consider that problems could stem from malevolent actors rather than accidents. The recent high-profile breach at Target (News - Alert) is a great example. They were infiltrated through a trusted HVAC systems vendor that was a more vulnerable organization and an easier attack than Target itself. Don’t be an easy target -- review your vendor’s security requirements as well as your own.
5. Expect higher governance standards.
A dizzying number of recent scandals, notably at Volkswagen and Toshiba (News - Alert), is increasing the scrutiny of corporate governance and increasing the demand for ethical management practices. Companies will be expected to take into account not only the interests of their shareholders, but also the interests of other stakeholders including employees, customers, and the community at large as well as the environment. Any violations of consumer trust, whether real or perceived, could have serious consequences.
6. The privacy vs. security debate will rage on.
It will become increasingly difficult to strike the right balance between citizens’ privacy and national security. Expect an escalating debate on the rights of companies and citizens to protect their privacy in the face of increasing demands for surveillance. New legal frameworks could be on the horizon that will affect the course of business.
7. Expect increased political activism and politically-motivated hacktivism.
Cybersecurity will always be a concern because the internet was designed to be open rather than secure. Our dependence on technology is attracting an onslaught of attacks not only from traditional hackers and hacktivists, but also from sophisticated state-sponsored attackers seeking competitive advantage in the global economy.
8. Instability will continue as a result of austerity measures.
Civil disorder will increase if economic conditions worsen. The lack of stability could result in new expectations from the business community. At the very least, it may affect whether businesses are able to access markets experiencing unrest either through customer-facing operations or back-of-house services.
9. Mass migration could create economic opportunities.
Mass migration will continue for the foreseeable future and there are no easy answers about how to address it. Developed nations will have to work harder to better process the thousands of individuals who are fleeing war and economic hardship. Once settled, these motivated potential workers could have a positive impact on the host economies.
10. Look for a more pragmatic approach to climate change.
Research shows that climate-related disasters have more than doubled since the 1980s and they now account for more than 80% of all reported natural disasters worldwide. These events are effecting entire regions and making lasting impacts. Asia is particularly prone to fierce natural disasters and is under-prepared, which will have ripple effects across the globe as the region grows in economic importance.
About the Author
Chloe Demrovsky (@ChloeDemrovsky), CBCV, is Executive Director at DRI International. She oversees DRI’s global network conducting courses in 50 countries on 6 continents and is responsible for DRI's global education growth, which since 2009 has resulted in a certification increase of 72%. She is a Board Director for the DRI Foundation, Coordinator of DRI’s International Glossary for Resiliency, and International Editor for Thrive International Magazine and Thrive Iberoamerica Magazine. She is also an Adjunct Professor at New York University. She holds a Master’s in International Business from New York University and a Bachelor’s from Bard College at Simon’s Rock.