The Surprising Secret of Business Resilience

Interdependencies are key to resilient businesses.

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Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
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Executives dream of insulating their companies from all risks, both natural and manmade, making their company’s revenues impervious to the vicissitudes of a capricious world. This is also the implicit goal of most business strategies, achieved through the use of resource control through vertical integration, supplier dominance through buying power, persuasive political influence through lobbying and campaign finance, and of course, good ol’ market monopolies, among other things. The idea is that by gaining control of your destiny, you foster complete commercial independence.

This dream is popular, but it is, of course, a fallacy. The surprising secret is that dependence, not independence, is the way to protect the organization against risks.

The concept of resilience offers a window into the fallacy. Like the term “sustainability,” resilience has become a standard at global confabs and — as with sustainability — it is a term that means different things to different people. Experts often talk in terms of personal “psychological resilience,” referring to the ability of individuals to bounce back after being hit with disappointments, shocks, or traumatic events. This is an important perspective, and corporate wellbeing specialists have begun developing resilience practices for workers.

But a less-understood perspective is “business resilience,” that is, how to ensure your company can continue creating value in the face of disasters, both natural and manmade.

A good place to learn about business resilience is Indonesia, and a good guide is Karin Reiter, Group Corporate Responsibility Manager at Zurich Insurance Group. I met Karin at the Aspen Institute’s First Mover Summit, and she offered a compelling example.

“Indonesia is often referred to as supermarket for natural disasters,” explains Reiter, “particularly for flooding.” As an insurer, Zurich had exposure to many companies in Indonesia. One customer in particular experienced a severe flooding event and was heavily damaged. In order to reduce future losses, Zurich risk engineers were called in to recommend how to make the factory more resilient to future shocks. Protective improvements such as moving stocks off of the ground floor and building berms to divert floodwaters were made, which would substantially insulate the factory during the next flooding event.

Not surprisingly, Indonesia experienced another flood not too much later. This time, however, the factory was protected thanks to the improvements. “So you would expect that the next day the company would be up and running again at full speed,” says Reiter.

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Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
See All Articles in This Section

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Comment (1)
simbarashe kamba
I concur with Gregory that the concept of "business resilience" is little understood especially in a young developing economy that is still passing through turbulent economic phases such as obtaining in Zimbabwe where I am resident.When Albert Einstein said,"Look deep into nature.....individual species do not exist in isolation but are part of interdependent ecological web...". In essence the same nature- model ought to exist in any business economy but now how can that concept be adopted and exploited to full benefit of any given community to creating sustainable cash inflow streams given that private-public sectors are not working hand in glove with deep suspicion of regime change agendas that has led to polarization of the same community which is supposed to be symbiotic?