2023: Another 'Annus Crisisbilis'

A year so bad that we resuscitated “polycrisis”

You know things are bad when you’re reaching back decades for a way to describe what’s going on.

But they are, and we did.

Columbia University History Professor, Adam Tooze , in particular, resurrected the term polycrisis to define the present moment of consecutive, concurrent, and compounding crises, “this coming together at a single moment of things which, on the face of it, don't have anything to do with each other, but seem to pile onto each other to create a situation in the minds of policymakers, business people, families, individuals.”

And in 2023, it was this simultaneous accumulation and durability of critical events that served as our main challenge.

Existing crises persisted or got worse

Just remember how the year started – against the backdrop of a continuing pandemic and war in eastern Europe, with resultant health and economic impacts to energy, food, and the overall cost of living.

Now fast forward to the end. Not only have these crises not disappeared, but many have intensified.

Cost of living continues to be a top concern for global publics. Last week, CNN polling of U.S. voters revealed that the economy or the cost of living remained the most important issue facing the country, with few expressing optimism about where the economy was headed.

Similarly, in the U.K., the economy (35%) and inflation (25%) were the top two concerns, according to Ipsos Issue polling in November.

Then, there’s wellbeing in the workplace. Turbocharged by the pandemic, workplace wellbeing declined precipitously over the last few years. However, even improvements in the pandemic health picture haven’t made a significant dent in employee perspectives on their own wellbeing.

For instance, a round-up of employee and employer sentiment in the U.S., U.K., Canada, and Australia, Deloitte’s 2023 Well-being at work survey came out with the top-line finding that half of workers “always” or “often” feel exhausted (52%) or stressed (49%).

The not-so-wearied reported only feeling overwhelmed (43%), irritable (34%), lonely (33%), depressed (32%), and even angry (27%).?

Cyber attacks soared

Employers, for their part, had good reason to feel overwhelmed. Cyberattacks continued to increase. Breaches broke records set in 2022.

The Apple-supported study, The Continued Threat to Personal Data confirmed that data breaches were at an all-time high for U.S. businesses in the first nine months of this year, with global organisations facing similar trends.

These attacks were often perpetrated against critical infrastructure assets, as well, including healthcare organisations and water infrastructure .

Ransomware attacks, specifically, skyrocketed this year. High-profile targets included Royal Mail, the U.S. Marshals Service, TSMC, MOVEit, and others. The MOVEit breach alone affected more than 2000 organisations and over 62 million people, with data taken from government agencies, school systems, big businesses, even HR and payroll services.

Meanwhile, the rise of ransomware-as-a-service portends much of the same for next year, i.e., more breaches and service shutdowns as well as heftier payments.

Hackers are also turning more of their attention to vulnerabilities in vendor’s systems to gain access to the data stored by organisations reliant on the vendor. In fact, rounding out the dismal year in cyber, 98% of organisations reported now having a relationship with a vendor that experienced a breach within the last two years, attesting to the need for stricter scrutiny of vendor ecosystems.

New crises emerged?

Besides our longstanding crises, we faced a landslide of new ones in 2023.

Most explosively, the year is coming to an end with the Israel-Hamas war raging, threatening to broaden into a regional conflict with major supply-chain ramifications if Red Sea commercial shipping is further threatened.

Nor is the Red Sea our only supply-chain flash point. Tensions are still at high boil across the Pacific, with China’s graphite export restrictions to the U.S. having just gone into effect at the beginning of the month.

Meanwhile, the drought-plagued Panama Canal , through which 40% of all U.S. container traffic travels, has become so dry that ships are facing the stark choice of having to idle, potentially for up to weeks, or sail entire continent(s) out of the way to get through more passable waterways.?

Outside of drought, the severe weather picture darkened further.

This year, the National Oceanic and Atmospheric Administration (NOAA) confirmed a staggering 25 weather/climate disaster events with individual losses exceeding $1 billion in the U.S., up five from last year and a stunning 17 from the 1980-2022 yearly average.

The year in corporate crisis

Corporate crises picked back up, as well, with the fall of the tech sector’s preferred bank, Silicon Valley Bank (SVB) in the largest bank-run since the Great Recession.

SVB wasn’t the only corporate flame out, though.

This year, Chinese real estate giant, Evergrande , struggling to meet interest payments on its debts, filed bankruptcy in New York then suspended trading in Hong Kong, after seeing a loss of 99% of its share value over the last few years.

Whole sectors tottered, too.

Hollywood, having rebounded after Covid, truly had an annus horribilis. Months of strikes by both writers and actors stopped production, leading to an estimated economic cost of $6 billion in lost wages and business impacts.

Among less glamorous crises, here in Australia, we suffered a 14-hour nationwide outage , when major telco Optus’ services went down. In the words of communications minister, Michelle Rowland, whose government promptly ordered an investigation into the incident, the outage “caused significant disruption to the lives of millions of Australians, impacted small businesses, and left many without the ability to contact emergency services.”

Banking was another critical sector in the spotlight. The Basel Committee on Banking just issued its report card for banks, doling out incompletes sector wide as the industry is lagging in adopting Committee principles on operational resilience and operational risk.?

Green shoots on the horizon?

So, is there any hope in 2024, or does next year augur more of the same?

One great positive of facing consecutive anni horribiles (four by my count) is that business leaders are waking up, acknowledging the great challenges they face to resilience, and learning from past experiences.

Organisations, as measured in the BCI Horizon Scan Report 2023 , are increasing awareness of the critical need to adopt benchmark standards for security and resilience and business continuity, such as ISO 22301 .

Businesses are also increasingly centralising risk scanning processes to enhance risk mitigation and enable a more proactive response to evolving threats.?

Software providers in the integrated resilience management space are doing their part, too.

Adapting to this wider range of risks and increasing occurrence of multiple, major incidents at once, we are delivering innovative solutions that give our customers a more comprehensive and holistic approach to resilience and facilitate collaboration and coordination in response when it matters most.

And that’s something to look forward to in 2024.

--

James Boddam-Whetham is CEO of Noggin, an integrated resilience software platform that seamlessly unifies operational & third-party risk management, operational resilience, business continuity, incident & crisis management, emergency management, and security & safety operations. Learn more at www.noggin.io .