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Are organisations ready to face the next unknown? This report, co-sponsored by The Economist and Iron Mountain, helps to answer that question.
Resilience reimagined is a survey-based research programme, conducted by Economist Impact and sponsored by Iron Mountain, studying organisational resilience. This briefing paper uses insights obtained through survey analysis, desk research and expert interviews to identify changing interpretations of organisational resilience across ten countries and four industries.
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In an evolving approach to risk management, leaders must examine who is responsible for risk management and how they can adopt solutions that protect all parts of the organisation.
Organisations have sophisticated processes for recruitment and retention. Many of these revolve around the workplace set-up: where people sit, hold meetings, and interact socially within and outside of work hours. In recent decades more organisations have embraced the possibilities of remote working, and with this shift more paper needs to move to digital. Data storage should broaden from solely on-premise to more cloudbased hosting strategies. When the pandemic hit and businesses were forced to close their premises altogether, these basic operations and procedures were put to a sterner test than expected. In many cases, where work does not require the physical proximity of staff and customers, organisations experienced little service disruption. Businesses where physical interaction is unavoidable either shut (restaurants, cinemas, sports venues) or continued limited work while adapting their facilities to social distancing.
As the pandemic demonstrates, many of the changes introduced in the initial outbreak response have become permanent as organisations rethink their office needs. Some will consolidate properties or tenancies to reduce their overall footprint, while others divest real estate that is no longer required as hybrid work practices are embraced. On the one hand, moving information through virtual channels will become even more important, with the long-promised ‘paperless office’ coming closer to reality. On the other hand, securing those information flows will take on an even higher priority as the organisation’s data spills beyond its walls. More than half of the organisations surveyed have invested in flexible workspaces that can be adapted to hybrid workforce needs. By contrast, nearly as many have changed their physical offices to meet employee wellness guidelines. So far, only 17% of those surveyed have closed locations, but 30% prioritise having more and smaller physical workspaces.
Remote work is creating another profound challenge for executive leadership: the impact of prolonged isolation bearing on employees’ mental health or the struggles of balancing work and parenting responsibilities. All this will take years to unravel, while changes in staff preferences between home and office working—and their employers’ response—are yet to be fully worked out. Hybrid work is here to stay, but organisations have some way to go to understand and adapt fully to the constraints it imposes.
There is work to be done, and leaders recognise this. Before the pandemic, training in new skills was the core activity in building workforce resilience, with 57% of respondents implementing programmes. But since the outbreak, attention has swung heavily from education to developing hybrid work patterns: about half say the pandemic accelerated progress in building hybrid work technology platforms (49%) and arranging flexible working schedules (49%).
Mr Baldwin reflects this positivity in his views on post-pandemic workforce resilience. “Reorganisations at companies will continue to take place; employee wellbeing is top of mind, as employees are a company’s number one asset. It is the staff that allows organisations to be successful.
The digital transformation of business, public sector and social life have brought tremendous opportunity for gains in the quantity and quality of goods and services, improvements in productivity and inclusion in financial and commercial markets of segments previously excluded by geography or social conditions. But digitalisation has also brought negatives. One is a proliferation in the harvest and storage of personal data, raising trust issues and risks of misuse by unethical corporations. The theft of personal data for fraud has been a rising feature of the digital world for at least three decades. As organisations make their data more secure, regulators are also clamping down on criminals and fraudsters as attacks become more sophisticated. A company or government entity suffers a devastating loss of trust and reputation when its customer data is breached. Another significant risk is posed by industrial spies or antagonistic governments, who can steal intellectual property, sabotage operations or eavesdrop on private communications. Again, the cost to the organisations is substantial.
An organisation’s approach to asset lifecycle management as a secure practice is central to embedding resilience. Digital fingerprints remain on old phones, laptops, monitors, servers, and office or healthcare equipment. How organisations plan, acquire, use, maintain and dispose of these assets is under regulatory scrutiny related to security and environmental impact.
The adoption of work practices triggered by the pandemic increased data security threats, as data are shared more often across wider networks and managed outside the controlled environment of corporate offices. In an age of hybrid work, securing the computers, laptops and mobile devices of staff takes a higher priority. Most organisations were already deploying data governance and security measures before the pandemic hit, with 54% reporting investment in monitoring cyber risks and 56% having digitised physical records for easy access and safe keeping. Investment has picked up pace in some areas since. In particular, 48% of organisations report having increased investment in hybrid work data protection and security applications.
The pandemic and other global disruptions we’ve faced in 2022 have once again reminded organisations, both public and private, that developing resilience can be the difference between thriving and sinking. Many have moved towards a more holistic, system-wide approach to resilience over recent years, and the process continues. These trying times have provided the perfect spur for those yet to make a move and have rewarded those already advanced along the track.
Organisations are already beginning to adapt to a more hybrid work environment, with employees performing their roles without discrimination between their home workspace and the office premises. This brings greater flexibility to operations but adds a new layer of vulnerabilities. Organisations are prioritising securing employees’ digital devices, whether desktop computers, laptops or phones while ensuring the continuing security of data flows.
But organisations have a lot more to do. Adopting best practices in organisational resilience is still rare. Few have centralised co-ordination of their resilience efforts. Few have embedded them at a sufficiently senior level in the organisational structure. Few still have resourced them adequately in terms of budget and personnel.
As Dr Flynn summarises: “The old way of doing risk management largely assumed that most days are blue-sky days. Today, we’re in a world where turbulence is the new normal.”
t is up to leaders to demonstrate a strong vision and support for resilience-building and resource it appropriately. Their efforts should include creating organisational structures that facilitate communication and co-ordination on building resilience. In particular, they should focus on transforming the workplace to enhance resilience, improving data governance and security, bringing more attention to sustainability and working towards operational efficiency.
Organisations, resilience professionals and the academic community should also focus on developing indicators and metrics that allow senior leaders to measure the impact of their resilience functions and create accountability for the results.
And such resilience-building can reverberate throughout the organisation, not just serving it during times of disruption. “You can prepare for bad things, and that preparation can bring good things,” says Mr Baldwin at Netflix, summarising the benefits of this approach.
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