As it turns out, the world simply can’t catch its breath. First with the Coronavirus, then came the war between Russia and Ukraine, and the Bitcoin crash. So, it makes sense that everybody’s on their toes about what the new year is going to bring to the table. Or, perhaps not everybody. Companies that understand the importance of resilience continue to thrive despite the disturbances. But how do they do it?
What’s the secret to achieving sustainable and inclusive growth through resilience? We’re going to guide you through essential steps to making your business more resilient in 2023!
Constant changes are your friend
One of the first, and possibly hardest, things to get accustomed to is the fact that you shouldn’t seek stability but flexibility.
You shouldn’t be the happiest if you’ve managed to enter a period when your business simply repeats actions and continues to bring in revenues without innovation. That’s not how you build resilience! Sure, money might keep getting in but even a minor disruption in your normal operations might derail your business. You have to keep introducing changes in your business in order for it to keep thriving, routinely looking for new opportunities and ways to improve.
What do we mean by a change in business exactly? You should encourage innovation, skill development, staff and leadership education. That way, not only will you have a mindset that is at peace with changes, but your employees will also be more at ease when the crisis happens.
If you are yet unsure about this, let’s take a look at the example of a world-renowned company that has been refusing core changes for decades. Blockbuster went from owning 9,094 stores worldwide to a single one simply because they somehow thought they were immune to all the tech advances and even rejected a partnership with Netflix in 2000 (while the latter was still a fresh startup). They could have easily continued with renting videos while exploring digital offerings but they stayed right where they were without thinking about the future.
Have several disaster scenario reliefs at hand
Is it possible to predict every single catastrophe in business or life? Of course not. Yet, the least we can do is imagine how the process of timely reaction and recovery would go. To this end, it’s best to define how you would react to certain hardships. Scenario planning is so popular for a reason!
Here are but a few scenarios you should think about:
- You lost all your suppliers.
- You experienced a devastating cyber attack, and your materials were compromised or stolen.
- Your most important manager(s) resigned.
- Your biggest client(s) withdrew from the project.
- The taxes increased by 20%.
The list goes on and on. Don’t be afraid of imagining the worst possible situations. That can only help you devise a defense mechanism on time.
Choose the risk manager
It’s good to think in advance about who exactly you should contact if/when an unexpected problem arises. This goes in hand with the previous method. Depending on the situation, you and your employees should know exactly to whom to turn.
Don’t put all your eggs in one basket
Now, your business may be focused on providing only frontend development services, but that doesn’t mean they should be your sole source of income. You need to diversify your income streams as soon as possible to build up your resilience. Does that mean you have to turn to backend development, too? You could, but fortunately, diversifying your services or products isn’t the only way of achieving various income streams.
You can also keep an eye on government grants. These are available not only in pandemic situations but at all times. The eligibility criteria are as variable as the possibilities of obtaining one. Try to follow news about the latest economic reliefs — perhaps your company is a good fit for one of the latest government projects.
Similarly, keep an open mind for new business ventures or partnerships that could become very profitable. Let’s remember that McDonald’s’ power lies not only in their fast food restaurants but the fact the company possesses the most attractive locations, i.e., today they gain power from the real estate business.
Employee diversity is highly recommendable
All it takes to keep the work atmosphere dynamic and boost innovation efforts, is hiring a diverse workforce. The benefits of diversity in the workplace abound. People with different professional and cultural backgrounds also come up with different ideas and solutions, and you get to pick from a richer talent pool.
The figures related to workplace diversity show that it can significantly increase your profits. Companies with high racial and ethnic diversity levels have a 35% advantage over the competition when it comes to financial returns. Diverse equity boards are far better, too, as they have a 95% higher return on equity.
Overall, there are plenty of good examples of how a diverse workforce improves your resilience.
Keep track of your assets
This is hardly anyone’s favorite, but making sure you can track any of your belongings and possessions at any time can be a lifesaver in certain situations.
It’s rather common for inventory to be the biggest capital source for a number of businesses. For this reason, it’s mandatory to know exactly how much of it is available at any moment. In contrast, you could be left scrambling while figuring out where the most important inventory is in times of sudden crises and how much is available to you at that moment. Usually, enterprise planning resource software (ERP) is indispensable for this purpose.
Estimate your resilience
Establishing business resilience goals and maintaining them is easy compared to measuring them. On the other hand, you need to know your resilience levels to determine whether you should invest more. This is challenging since you have to collect information from all systems, and have a multi-timescale perspective.
Remember that resilience is a long-term goal, and sometimes you’ll have to sacrifice short-term ones for the purpose.
Build a modular business
A modular business consists of several components/small businesses that can function on their own. They are all independent units and your business won’t be badly hit even if one of them stops working properly. A modular organization consists of small chunks with clearly set interfaces. They’re relatively easy to comprehend, and, more importantly, you can rewire them faster during an unexpected crisis.
Therefore, this is one of the best business models you could create. Its survival potential is excellent regardless of the latest advances.
Show off your value to the world
Which businesses survive in uncertain times? The indispensable ones! Usually, the situation makes it obvious which businesses are essential. Pharmaceutical companies and delivery companies blossomed during the pandemic. Therefore, it’s your duty to make your business stand out as the product/service that society “can’t live without.”
How do you do it? You need to align your business goals and activities with broader systems. Get connected and later embedded in societies, business ecosystems, and economies. Make your presence known and emphasize your purpose.
Prove that what you do serves important societal needs, and you should remain safe even during the worst of times.
Building resilience, as well as maintaining it, is a complex, long-term goal. Even though it seems like a big challenge, it’s definitely worth it. Without any doubt, it’s going to pay off. Because if there’s one thing that’s certain, it’s that the business world is filled with unpredictable events.