The Digital Path to Business Resilience
One of the words I kept hearing the most throughout 2020 was “resilience.” It makes a lot of sense, as the ability to address ambiguous and unpredictable scenarios became a key differentiating factor between the companies that struggled during the pandemic and those that fared better. Yet, one of the things I feel was most neglected about resilience is that it is a lot more than just coping with challenging situations.
Sure, at its core, resilience is about having enough strength to face volatile situations and enduring in spite of them. But surviving isn’t a sound business goal for the long term, because you can’t expect to grow a business just by reacting to the obstacles that come your way. Thus, it’s highly important to start addressing the other part that makes up a resilient business, the one that should appear after protecting itself from unexpected adversities: the ability to reimagine business to stay ahead.
Understanding resilience like that agrees with the widespread conception that the response to a crisis should consist of 3 phases. First, there’s a response phase to guarantee service continuity. Then, we go through a recovery phase to restore that service to profitability. And finally, we aim for a growth phase in which businesses increase and maintain those profits during a new normal.
If companies don’t go through the 3 phases and (more importantly) if they don’t develop mechanisms to ensure they go through them, then they can’t call themselves “resilient.” And that’s what I’m seeing in many businesses across different industries. During the first months of the pandemic, most companies set out to address more immediate concerns in a widespread response phase: they adopted remote work, tried to minimize supply chain disruptions, and adjusted their operations to keep doors open.
Yet, even when we are already a year into this pandemic, many of those companies are still struggling to jump to phase two of the crisis response. Why? Because the recovery phase is about coping with uncertainties in demand, supply, markets, and resource availability and, as such, the traditional way of approaching all of those things don’t work. Going through a recovery phase implies developing a new operational standard which, today, is all about digital acceleration.
It’s only through the adoption of new technologies and the reimagination of operations that companies can not only survive and recover but grow amidst the uncertainties of the new normality. In fact, digital tools are the only way to build a true resilience that won’t just allow businesses to better respond to unpredictable shifts from now on but that will allow those companies to be a better and stronger version of themselves.
The Digital Response
According to BCG, there are six dimensions of resilience that business leaders should focus on: ”protecting and growing the top line, developing agile operations, enabling people, accelerating the adoption of data and digital platforms, enhancing cybersecurity, and strengthening financials.” It’s no coincidence that all of those dimensions can be addressed through a combination of digital technologies like AI, data science, cloud computing, and the IoT.
Many people point that out to justify the crucial importance of tackling digital transformation processes right now. And while I agree with the sentiment, I’ve already argued that traditional digital transformation doesn’t cut it anymore. As the COVID-19 erupted, the urgency to become digitally enabled businesses asphyxiated companies all across the board. Thus, at BairesDev we’re pushing for digital acceleration, a process of faster technology adoption with a focus on agility and flexibility that’s key for resilience.
Through this quick digital response, companies can increase their stability and their productivity, lay down the foundation for future work, and open up themselves for new business opportunities (which, of course, are always up for grabs during crises as profound as the Coronavirus pandemic). I’ve argued in a past post that all companies should aim to become tech companies during 2021. The reasons for doing that are precisely these: developing technological capabilities (in conjunction with workforce-centered capabilities) is the only path to successfully go through a digital acceleration process.
Naturally, all that is easier said than done. Today, many businesses are struggling with limitations to their resources which means that they have to be laser-focused about their investments to respond to the current situation. Prioritization is key here and though building resilience should be your ultimate goal, how you end up getting there will largely depend on where you are standing right now, your current capabilities, and your financial muscle. There isn’t a formula written in stone for that.
However, there’s a general path that will surely take you closer to becoming a resilient company by the way of digital acceleration. It includes the following stages:
- Focus on improving your response and recovery phases through small incremental enhancements that provide the most value in the short term. Automating your operations, re-engaging with the right markets in a timely manner, and adjusting your underlying tech infrastructure are all things you can do right now that can immediately provide value.
- Define mid and long term objectives and create paths to get to them. Focusing on the small enhancements is good to finally get in recovery mode but you’ll need to go beyond them. For that, you should identify which larger goals you need to aim for to create sustainable growth that’s based on resilience, from increasing agility to enabling employees through digital acceleration.
- Take immediate action to address the vulnerabilities that feel more outdated and less resilient. In other words, start walking towards those long term objectives by ensuring that you don’t have vulnerabilities in the 6 BCG dimensions, especially in the financial and security departments. After you achieve a certain strength level on those, it’ll be time to go over all those dimensions again to sophisticate them and digitally enable them through more radical changes.
As you can see, there’s nothing too radical about these notions. That’s because times like these call for pragmatic actions and the only pragmatic path towards resilience is to respond quickly to ever-changing scenarios with the help of technology. Obviously, that kind of plan can only be successful with the proper planning behind it, which should define your strategy while allowing enough flexibility and agility to change midway.
In such a context, embracing digital acceleration is a must for all companies, regardless of their current resilience. That’s because what works today might not work 3 months down the road, so developing digital agility is essential for businesses that don’t want to get trapped in the response/recovery phases of a crisis. To truly grow and become a real resilient business, digital acceleration is the only way.