Lessons Learned From the Pandemic: Business Resiliency

More than a call to action or a rallying cry, one common thread bound together organizations that had success navigating 2020’s challenges: resilience. The ability to operate through adversity while staying resilient was one of the most important attributes of companies that are finding success during the Covid 19 pandemic.

Initially, whether it be through necessity or opportunity, businesses developed new products and services for both B2C and B2B at speed in response to the pandemic. Examples included consumer products company Dyson stepping up to the plate with ventilators, clothing manufacturer Sterlingwear with PPEs, and spirits producer Trolley House Refreshments with sanitizers. 

As the crisis deepened and a new reality set in, businesses had to navigate what was often an unclear path in order to thrive in the midst of chaos. While each journey varied, successful companies that were able to look deep into their customers’ needs and take advantage of their assets and core capabilities were the ones that met with the most positive results. 

While it may be obvious that the resilient enterprise will more likely succeed in volatile or changing times, what it takes to build and maintain resilience is often easier said than done. There are a number of critical factors that go into creating a resilient enterprise. In fact, there are five key factors to address and one overarching goal that must be addressed in order to build and maintain resilience.

I. Attributes That Define Enterprise Resilience

In all cases, an ability to adapt and innovate were essential to success but it goes deeper. A broad and inclusive effort is required to succeed, including a focus on customers, engaging with stakeholders, challenging assumptions, responding rapidly, and maintaining a balance of acting short term while thinking long term.

A. Focus on Customers

Intimacy with customer needs remains the number one priority for resiliency. Gaining deep customer insights requires building and maintaining a dialogue that goes beyond normal transactional interactions. Through these deeper conversations, a fuller understanding of challenges, risks, priorities, and opportunities emerges.

Example: Safety Protocols for Commercial Production

Oui Productions, a creative production company, kept the lines of communication open with their agency clients throughout the initial stay at home orders. From these dialogues, an emerging theme appeared: a desire to quickly resume creative production to meet the immediate demands of businesses communicating to consumers coupled with a hesitancy to do so due to the lack of clear standards and protocols for safety.

Drawing on the available guidelines from governmental and health agencies, OUI Productions developed a program, Covid Concierge, that featured clear and comprehensive guidelines, including administration from medical professionals and, ultimately, onsite testing capabilities. As a result, OUI Productions has been able to resume activities while providing an emerging industry standard program that meets the needs of the broader industry.

B. Engage Stakeholders

Maintaining a broad range of perspectives from those directly involved in product and service delivery will provide insights and perspectives that might be overlooked given the speed and urgency to respond to immediate challenges. In addition, it is important to look further and include those outside of the immediate supply chain to understand how complex interrelationships might impact logistics and the ability to deliver goods or services.

Example: Supply Chain Realignment Poultry Processing

Restaurant closures as well as stay-at-home orders at the beginning of the pandemic drove an increase in at-home preparation. As consumers stocked up on essential food supplies, the poultry industry saw a significant spike in demand for processed chickens as homemade recipes continued to gain traction.

However, challenges quickly emerged when the processors, such as Tyson along with other producers and organizations in the supply chain, saw a spike in COVID infections. These infections combined with slowed production due to newly implemented safety measures radically altered the capacity of these poultry processors just as demand spiked upwards. 

After some time, the largest poultry processing businesses began to share their collective challenges and identify improvement areas. Two solutions became apparent from this dialogue. 1) Suppliers required enhanced levels of support to meet demand. 2) Real-time information on consumer demand, poultry supply, infection rates, and other critical data needed to be shared across the industry to ensure stability. 

As a result, the poultry processing industry was able to streamline its supply chain and better meet demand.

C. Challenge Assumptions

Faced with significant uncertainty, companies have been provided a golden opportunity to radically challenge fundamental tenets of their business. In such a situation, it becomes important to build a robust process so that the organization has a standard plan on how to question the fundamentals of how their business operates. However, there remains risk to those who question. So, it’s imperative to structure a process with clear roles that allow a free flow discussion that entertains constructive dialogue. The need to go farther and deeper in probing becomes sacred. Questions such as “what if” and “what’s next” help drive the process.

An illuminating example exists within technology development and venture capital fields. In all of these settings “red teams” are chartered to take an adversarial position and pursue a holistic “attack” against an idea, position, or product. The goal is to expose vulnerabilities and then identify ways to overcome those vulnerabilities. 

Example: Corporate Real Estate

One of the defining assumptions that was challenged by many companies was the need for corporate office space. That became apparent early in the pandemic with the announcement that REI would be selling their newly built corporate headquarters. While remote work had been a growing trend in some sectors, REI’s move signaled a major shift across the business sector and an acknowledgment that working in a corporate office environment was no longer a requirement for successful operations. 

There’s no doubt that enabling technologies such as Zoom, Microsoft Teams, and others contributed to REI’s decision. The assumption that working collaboratively in an office was sacrosanct for many businesses but lessons learned from the pandemic challenged those bedrock beliefs.

D. Respond Rapidly

Times of significant disruption tend to slow down decision making to allow the gathering and analyzing of more information, greater consensus building, or even to let circumstances unfold. Unfortunately, conditions may continue to deteriorate, making slow or no action a trap. 

Resilience requires both an incremental and decisive approach towards decision making. Initially, small reversible steps allow for real-time feedback and quick learning to validate assumptions, gauge reaction, and confirm the ability to support changes. Actions and decisions should be bold. Process and even governance matter to uncover the decision-making roles and process ensuring clarity on how to ensure timely decisions.

Example: Buying Capacity 

Emerson Electric’s, David Farr, was clear early on in the pandemic with his leadership team, telling them that they needed to take action swiftly and to be bold. After an early encounter with transportation bottlenecks, Emerson reserved seven aircraft in China to ensure timely movement of parts. With over 30 facilities and 8,000 employees, Emerson’s Chinese businesses were critical in providing the necessary parts to guarantee the continuous operations of their power and water utility divisions. That decision proved prescient because the cost rose dramatically and the availability of transportation options was limited a short time later. Quick action not only ensured a functioning supply chain but also proved to be a wise financial move as well.

E. Act Short Term - Think Long Term

The dual focus on the immediate and long-term will provide a perspective allowing the necessary context for the entire framework that supports resilience. The COVID pandemic has rapidly accelerated trends that were well underway including telehealth, virtual retail, and working remotely. In this context, Graeme Pitkethly, Chief Financial Officer for Unilever, rightly pointed to the need to manage businesses through a microscope and telescope. The urgent needs of the present can overshadow the necessity to think further and deeper into the future providing a balanced perspective. However, the balance allows for new opportunities to emerge in the form of new products or services or new ways of doing business. Small businesses have been prime examples of this trend.

Example: Custom Cocktails

The Wandering Barman began offering craft custom cocktails as part of their “laboratory and tasting room.” As shut down orders swept across the country, The Wandering Barman became a casualty like many others. However, they immediately understood that the demand for custom cocktails wouldn’t change only how they are purchased and consumed. The spike in at-home meal preparation, and alcohol consumption along with it, provided an opportunity for The Wandering Barman to develop and sell premade cocktails. Their distribution channels expanded significantly as other bars and restaurants sought to expand their own beverage offerings to complement their food service.

II. An Important Overarching Goal

While being resilient implies both flexibility and an ability to innovate, the resilient enterprise has a core that demands and requires a disciplined approach. This may seem counterintuitive at first blush but it is essential that an ongoing commitment to process be maintained and rewarded in order for resilience to flourish. This structured approach to resilience allows companies to gain the capabilities they need in order to not only meet the demands of their immediate circumstance while also growing, learning, and thriving for many years to come. It’s fair to say that an enterprise that loses its resilience will likely encounter severe problems down the road. 

Contributing Factors

Creating a resilient enterprise necessitates additional elements to support and nurture a dynamic, flexible organization. For an organization to get good at change and feel comfortable in a more dynamic environment requires a number of factors. The absence of some of these factors or weaknesses in their implementation can severely impact the ability of a business to become and remain resilient.

A. Leadership

Setting the tone, enabling failure, and acting decisively require leadership at every level of the organization. It is easy to want the outcome of a resilient organization but difficult to implement without the necessary leadership. 

B. Talent

Diversity of thought and domain expertise becomes critical in a dynamic resilient organization. These skills and knowledge should be sought not only within an organization but outside of an organization within the various stakeholders that interact with a business.  

C. Culture

Invisible forces, in the form of corporate culture, may inhibit the development of a resilient organization. Organizations may have implicit and explicit norms that challenge the fundamentals of resilience. These include rapid decision making, challenging management, as well as engaging stakeholders outside routine channels. 

III. What It Means to Be Resilient

Resiliency requires a deliberate, structured approach to ensure the flexibility needed to respond in a dynamic environment. Focusing on customers, engaging stakeholders, challenging assumptions, rapid decision making, and short and long-term thinking provide the tools necessary to become resilient. 

If your organization is looking to improve your resiliency, Directed Action’s resiliency diagnostic can provide insights and actions to become more resilient. For more information, contact Kevin Keane, Executive Director, at (310) 503-6034 or [email protected].

Directed Action is a boutique consultancy collaborating with senior executives on mission-critical projects related to strategy, operations, technology, and resilience. Our consultants have experience with Fortune 500 and Big-4 consulting firms to accelerate and deliver complex, strategic initiatives. We help clients navigate, adapt, and thrive through change in areas such as Accounting, Procurement, Finance, Operations, Human Resources, Diversity and Inclusion, and Information Systems.