DESPITE THE challenges of 2020, business leaders’ confidence in the resilience of their organisations has risen. That’s according to the British Standards Institution’s (BSI) fourth annual Organisational Resilience Index Report, which surveyed 500 senior leaders across the globe.
The Organisational Resilience Index finds that leaders remain cautiously optimistic, with more than half (57%) of businesses in the UK, the US and India expecting their financial performance to improve this year.
The concept of organisational resilience refers to an organisation’s ability to anticipate, prepare for and adapt to both incremental change and sudden disruptions in order to survive and thrive. Of course, these are capabilities that have been put to the test in the past year.
As a whole, perceived organisational resilience across organisations globally rose in 2020, with a third of firms (33%) fully confident in the resilience of their organisations. That’s 5% more than in 2019. Encouragingly, many of the organisation representatives interviewed felt that the measures they had in place prior to the pandemic were successful and helped them to survive, stabilise and begin to rebuild, in turn boosting their confidence for the future.
While 2020 was a difficult year for most, many organisations emerged more confident from the test of the pandemic. Within the study, there’s a clear association between those reporting a stronger financial performance and those with stronger perceptions of their own organisational resilience.
Susan Taylor Martin, CEO of the BSI, commented: “2020 was a global test of organisational resilience and powerfully demonstrated the increasing importance of an organisation’s ability to prepare for, and respond to, unexpected or sudden disruption. It’s encouraging to see cautious optimism about the future as business leaders focus on building back better. Organisations clearly recognise the value of prioritising the health, safety and well-being of their employees, clients and communities.”
The BSI’s leader added: “As we look ahead to the ‘new normal’, we hope that our annual Organisational Resilience Index benchmark continues to provide organisations with the insights, foresight and inspiration needed to seize the opportunities ahead and ensure their businesses remain resilient in the future.”
While global recovery will be variable and take place at different rates around the world, the Organisational Resilience Inndex finds that financial security and confidence is not evenly spread across the world. Despite businesses in Japan and China reporting similar financial setbacks in 2020, only organisations in China expect a better year in 2021. Respondents suggested that this slower return to confidence in Japan is reflective of business culture rather than market conditions.
Business leaders in India, the US and here in the UK are looking ahead with relative optimism, with future confidence in their organisations either doubling or trebling despite nearly half of those organisations surveyed reporting worse year-on-year financial results in 2020.
Japan had the largest proportion of organisations reporting a worse year in 2020 and is forecasting the weakest recovery with only 38% expecting a better year in 2021. In contrast, US firms were the least likely to report a reversal of fortunes in 2020 and, alongside India, are the most likely to forecast growth (with 64% of them expecting a stronger 2021).
The report identifies that the aerospace industry is least confident of its organisational resilience following the upheavals of 2020. Just 43% of firms in this sector expect an improvement in 2021 in contrast to 67% of business leaders in the built environment sector, 61% in healthcare, 57% in the food space and 56% in the automotive world.
Despite the upheaval caused by the COVID-19 pandemic, diversity and sustainability continue to remain high on the agendas of organisations worldwide. The report unearthed that, rather than shifting down the priority list due to the emergence of matters that were perceived to be more urgent, looking after the well-being of employees, customers and communities is seen to be vital for rebuilding organisational resilience.
*The full report is available to view online at: https://www.bsigroup.com/our-services/Organizational-Resilience/Organizational-Resilience-Index/