New Delhi/Davos, Jan 25: The companies with built-in resilience were better equipped to handle the COVID-19 crisis, even as 2020 proved to be an unprecedented year of global disruption that left some businesses unable to cope, a new Deloitte study showed on Monday. The new study by Deloitte Global revealed that companies with built-in resilience were better equipped to handle the crisis, according to an article written by Deloitte Global CEO Punit Renjen published by the World Economic Forum during its online Davos Agenda Summit.
The global financial crisis of 2008 taught leaders in both the public and private sectors many valuable lessons about readiness. But nothing prepared CXOs for the triple threat they faced in 2020the confluence of a global health pandemic, social and political unrest, and worsening climate events. Mounting challenges during the year expanded the concept of preparedness in ways many leaders didn’t anticipate and pressured organizations in ways many couldn’t imagine.
Most organizations continue to struggle and many have been forced to cease operations, some permanently. However, certain companies have persevered, even succeeded in this unusual environment. And they are not just the ones that happen to be in industries whose products and services are needed during crises. In the survey, Deloitte Global sought to know which organizations possessed the cross-functional, strategic resilience and state of readiness that could overcome a worldwide challenge to consumer and B2B activity (and more importantly) why they were able to deliver.
Therefore, it decided to focus its inaugural 2021 Resiliency Report on how organizations best survive ongoing, broad and unexpected disruption on the scale witnessed in the past year. The survey of 2,260 private and public-sector CXOs in 21 countries revealed that successful organizations intentionally cultivate resilience and embed it in various aspects of their businesses.
Those that make it a priority are not only doing better than their peers in the current environment, they also anticipate more robust growth in 2021. Most global business leaders believed 2020 may not be an outlier. More than six in ten of those Deloitte surveyed said they think they are likely to see either occasional or regular disruptions of this scale going forward, and three-quarters of CXOs said they believe the climate change crisis is of similar or greater magnitude than the pandemic.
Assuming they’re right, organizational resiliency is more critical than ever. To get a sense of business resiliency before, during and after the disruptive events of 2020, Deloitte asked leaders to state which actions they had already taken or been planning to takeactions that suggest baked-in resiliencyin the areas of strategy, workforce, technology and societal impact.
Deloitte learned that taking early action matters and that resilience is as much about thinking ahead as it is about doing what it takes to respond and recover from a crisis. Across the board, organizations that had implemented key actions prior to 2020 surfaced as leaders in resiliency. Typically, they already had invested in workforce initiatives like reskilling their employees or redesigning work.
They had diversified operations and developed technological capabilities to drive new business models. They had adapted to remote working, kept employees safe and maintained trust between leaders and employees. Their organizations valued diversity, equity and inclusion and they were committed to improving the environment and strengthening communities. Those who were actively planning investments in these processes showed some resiliency, but not as much as the pacesetters. Respondents who were not planning such investments, in the near future or ever, were most likely to be overwhelmed by the events of 2020.
Some data variances were particularly stark. More than 80 per cent of CXOs who said their organizations had done very well cultivating resilient cultures also said they are doing well weathering the events of 2020. But among those who said they had not done well at all building resilient cultures, only 27 per cent were happy with how they fared in 2020. Unfortunately, organisations that acted prior to 2020 were in the minority. Less than a quarter of respondents said they were already engaged in the most popular strategic actions to survive the challenges (assessing cash reserves, strengthening supply chains and removing organizational silos) before the pandemic. Not surprisingly, the events of the past year have moved more companies to act.
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