Building Operational Resilience in an Era of Rising Threats

Disruptive events ranging from extreme weather to cyber attacks are growing in frequency and severity. Yet research shows only 25% of companies feel highly resilient to disruption [1]. Operational resilience - the ability to anticipate, prepare for, adapt and respond to change and adversity - has become an imperative. This article provides evidence-based strategies for constructing resilient business operations.

Adopt Enterprise-Wide Risk Monitoring

Gaining visibility into emerging threats is the foundation of resilience. Risk intelligence solutions using AI and big data analytics can rapidly scan thousands of risk variables to generate location-specific alerts [2]. Monitoring should span disruptions like natural disasters, geopolitical instability, infrastructure failures, supply chain shocks and more. This enables early warning to activate contingency plans.

Perform Business Impact Analysis

Not all disruption events impact operations equally. Quantitative business impact analysis evaluates potential financial, productivity and reputation loss from identified threats [3]. Critical processes and recovery time objectives are revealed. With this insight, resilience strategies can target where resources are needed most to minimize downtime.

Test and Update Business Continuity Plans

With 74% of companies lacking complete business continuity plans [4], testing and updating is crucial. Tabletop exercises validate plan effectiveness to fill gaps. Strategies should be revisited at least annually as operations and threats evolve. Embracing cloud computing and remote work provides flexibility when primary sites are inaccessible.

Prioritize People-Focused Resilience

Employees sustain operations, so protecting and supporting people enhances resilience [5]. Remote work policies, mental health resources, hazard training and flexible leave improve workforce stability amidst disruption. Additional staff cross-training allows key functions to continue if teams are impacted.

Explore Risk Financing Solutions

From parametric insurance to weather hedging, innovative risk financing tools transfer and spread financial impact [6]. Such solutions provide rapid liquidity for recovery. A balanced insurance portfolio aligned to risk exposure ensures comprehensive cost mitigation.

With preparedness now a competitive necessity, organizations must make operational resilience a strategic priority. Those who build robust continuity capabilities and cultures of adaptability will reliably deliver business outcomes despite growing uncertainty.

[1] BCI Supply Chain Resilience Report, January 2020. https://www.thebci.org/resource/bci-supply-chain-resilience-report-2020.html

[2] Karen Kroll, “How AI and data could help protect supply chains from disruption”, Supply Chain Dive, January 2020. https://www.supplychaindive.com/news/supply-chain-artificial-intelligence-data-disruption/570037/

[3] Elizabeth Blosfield, “Business impact analysis crucial for business continuity”, Business Insurance, February 2020. https://www.businessinsurance.com/article/00010101/NEWS06/912332662/Business-impact-analysis-crucial-for-business-continuity

[4] Insuresilience, "Too many companies lack complete business continuity plans", Insuresilience.org, 2021. https://www.insuresilience.org/disaster-resilience/too-many-companies-lack-complete-business-continuity-plans/

[5] Deloitte Insights, “People-focused resilience: Navigating disruption”, 2021. https://www2.deloitte.com/us/en/insights/topics/talent/people-focused-resilience-navigating-disruption.html

[6] Aon, “ Weather, Climate & Catastrophe Insight: 2019 Annual Report”, 2019. http://thoughtleadership.aon.com/Documents/20200122-if-natcat2020.pdf

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