Resilience is more than just a buzzword. The pandemic has shown how important it is for companies to invest in their own resilience at an early stage. The “Business Resilience trend book” published by Telekom in cooperation with Mind Digital, the consultant network for digital future markets, discusses important issues. "Times remain uncertain and volatile," says Bernhard Steimel, Head of Mind digital. He provides tips as to where companies can begin.
In the psychology field, resilience is known as the ability that helps people to make it through crises better and grow personally as a result. What is the difference between this definition and resilience in the business world?
Resilience means strength. For companies, this means handling shocks better and becoming more robust. Resilient companies can sustain cyclical and structural changes to supply and demand well, even in times of crisis. They are capable of generating profits despite crises.
Is resilience just something for large corporations?
No. Every company, whether large or small, has to try to become more resilient.
What characterizes resilient companies and what sets them apart from other businesses?
In our research, we have identified five characteristics of resilient companies.
- These companies make tough decisions at an early stage! They accept the need for fundamental changes. They aren’t afraid to abandon old habits. We’ve been able to observe this often during the coronavirus pandemic. Major trade fair and event organizers that quickly advocated for virtual trade fair concepts, for example. Clothing stores that quickly launched online shops, to avoid losing customers.
- Speed is important. Some processes simply cannot be ignored; you have to do something quickly. Break new ground, establish an additional offer.
- Develop strengths and don’t hesitate to make important investments, particularly during a crisis. For example, take the hardship of German asparagus farmers, when harvest workers from Eastern Europe were no longer allowed to enter the country due to the pandemic. A quickly implemented online platform connected the asparagus farmers with the target group of people who were looking for work here in the region. It ended up saving the asparagus harvest.
- Get smarter. Companies that digitalize more are more resilient. The digital pioneers have simply made it through the crisis better. Why is that? Many companies were saved by the fact that they quickly invested in digital workplace concepts and IT infrastructure for their staff. This enabled them to send their employees to work at home, thus ensuring their productivity.
- Become more empathic: Companies should increasingly take a stakeholder-oriented view of the economy. Customer-centricity is often invoked, but the coronavirus crisis revealed that there is still some catching up to do. Companies had to digitalize to maintain contact with their customers. Companies like Adidas are expanding their customer experience programs and merging data across all customer touchpoints to provide a consistent customer experience.
What are the top action areas for becoming more resilient?
As I see it, the first action area is customer experience. Why is it so important? In uncertain times, companies want to quickly find out how they can create new customer experiences with limited effort and increase the benefits of their products for customers. Digital quality management is also becoming important. But: customer orientation first! After all, effectiveness is more important than efficiency.
The second action area involves business processes. These are very important when it comes to making a company faster. Speed is one of the most important capabilities of companies in uncertain times. It’s especially relevant for supply chains. Just think of the ship that got stuck in the Suez Canal recently. It caused delivery delays of three to four weeks. Due to missing containers, the logjam made deliveries up to five times more expensive than the regular price. Digital supply chain software makes it possible to identify risks in the supply chain, as well as create more delivery transparency. Last but not least, robotic process automation (RPA) is also very important. It is one of the most important action areas in process optimization, because it lets you automate processes in a human-friendly way. When it comes to RPA, everyone’s a winner: by getting faster services, for example. And employees are freed from mindless activities and can have more fun at work, because the robot takes care of simple, repetitive tasks.
The third and most difficult action area is the technology. This involves everything that has to do with the digital foundation. It relates to the “engine room” of a company: cloud, security, infrastructure, and development and operation of software; basic information. Resilient companies require security for their critical infrastructure. In times of crisis, digitalization becomes a survival factor: it’s about remaining operable and flexible despite disruptions. When employees have to work from home, for example, good data connections and a reliable infrastructure are fundamental for business. That’s why companies need to consolidate their IT expenditures at an early stage. They have to develop a target vision as to how they want to work in future.
There is still a lot of work to do. What specific initial steps can companies take to invest in their own resilience?
My advice to companies is to concentrate on these three points:
- the meaningful purpose as a compass in uncertain times
When work focuses on the purpose, employees can better cope with uncertainties and are more committed. The corporate strategy needs a thorough review to design a target vision for the new reality.
- Fast decisions for digital growth initiatives
Fast decisions are often better and more viable. They are usually underpinned by an improved organizational structure. Strategic decisions are made by upper management. The implementation of the projects is decided by the local teams.
- Entrepreneurship and trust in your own learning ability
Resilient companies can continue doing business even under strain. But they have to have the courage to make the necessary decisions. Crisis management requires a “we can do it!” mindset. If you don’t have confidence in your ability to change, you’ve lost before you’ve even started.
Another important factor: digital pioneers can recruit young talents more easily. That’s why companies have to create a culture that attracts talent and serves as the basis for successful resilience at the company.
The global economic crisis is accelerating existing trends. Yesterday's decisions are today's commandments.