By Dr Sandra Bell Head of Business Continuity & ISDG Consulting (Europe), Sungard Availability Services
CEOs have long understood to survive and prosper they need to adapt to (and influence) their external environment. Their role is to direct corporate strategy, which involves looking both inward at the strengths and weaknesses of the company and outward at external factors that can affect the organisation using various analytical techniques.
However, the world is constantly changing and organisations’ corporate strategy must constantly adapt to keep up with it. Failing to adapt to change generally leads to business failure. In 1990, Richard Pascale famously claimed that “Nothing fails like success” by which he meant that what was a strength yesterday becomes the root of weakness today. Relentless change requires that businesses continuously reinvent themselves yet we tend to depend on what worked yesterday and refuse to let go of what worked so well for us in the past. To avoid this trap, businesses must stimulate a spirit of inquiry and healthy debate. They must encourage a creative process of self-renewal based on constructive conflict. Ten years later, Gary Hamel wrote about ‘Strategic decay’, the premise of which, in a nutshell, is that the value of every strategy, no matter how brilliant, will decay over time.
While corporate strategy needs to be able to deal with change both gradual change (described by Charles Handy in 1989 as "strategic drift") and rapid ("transformational") change caused by discontinuities or ‘exogenous shocks’, resilient organisations also need to deal with perturbations, deviations and disruptions.
For example, let's assume there are two competing coffee shops on a high street that is prone to seasonal flooding and power outages. Due to the fact that the high street floods regularly it would not be unreasonable for both coffee shops to have business continuity plans that involve the use of sandbags to prevent floodwater entering the premises and backup power generation to keep the equipment in the shop running in the event of power outages.
During normal flooding and/or power outage events both businesses deploy their sandbags and/or power backups and are able to continue serving coffee to their respective customers.
However, if the flood was more severe than anticipated, customers and suppliers may not be able to negotiate the flooded high street to reach the coffee shops. Likewise, the power outage may last longer and be more widespread than anticipated, affecting the coffee shops’ customers in their own homes.
The coffee shop reliant on its business continuity solution would concentrate on protecting its tangible assets and wait for the floodwaters to recede and the power to be restored before re-opening for business.
In contrast, a resilient coffee shop would immediately set about working out how to meet its customers’ needs despite the flooding and power loss. It may, for example, draw on its wide network of contacts to borrow a boat enabling employees to travel through the floodwaters and deliver coffee and baked goods direct to peoples’ homes or places of work and bring in supplies. It may also decide to temporarily diversify its range of food to ensure that local vulnerable people receive hot food despite a lack of power in their homes.
The response of both coffee shops is equally valid. However, the customer goodwill towards the resilient coffee shop is likely to ensure that its competitive advantage and market share remain high long after the floodwaters have receded.
Today’s consumers expect organisations to be resilient
Furthermore, today’s consumers are facilitated by information technology and have an ever-increasing expectation for 24/7 service 365 days a year. If they can’t buy exactly what they want, when they want, from their normal source they can now shop around globally. This means that if organisations do not have agile corporate strategies and resilience that enables them to respond successfully to market volatility, economic uncertainties, fluctuations in energy and commodity rates and global security instabilities and operational disruptions they can easily lose market share and confidence to new and non-traditional competitors.
A complex global commercial environment may be good at driving business efficiency but a rise in consumerism is driving a local business model and woe betide the organisation that does not heed this.
“Today’s consumers expect the modern organisation to be both agile and resilient”
Likewise, gone are the days when customers were happy to accept downtime while a heroic recovery was executed. They would much rather trust an organisation who successfully anticipates and manages risk in a calm and measured manner. In other words, today’s consumers expect the modern organisation to be both agile and resilient - it always delivers on its value proposition regardless of the negative stresses it encounters. It also means that resilience is a core, and valuable, business differentiator in today’s rapidly changing and volatile business environment. In fact, research suggests the need for organisational resilience will only increase.
How to achieve resilience?
Resilience means having the will, skill and capability to adapt in a positive manner to both a changing and fluctuating environment. However, the modern organisation is a complex beast and it is not always easy to get every part of the organisation to work together. Most organisations find it hard enough keeping their corporate strategy up to speed - and therefore the thought of trying to respond collectively to a temporary fluctuation or disruption often falls into the too difficult pile. This means that organisations at best rely on Business Continuity alone and, at worst, keep their fingers crossed and hope for the best when faced with disruption.
To be resilient an organisation needs three things:
- An executive who makes a conscious decision to adapt to disruption together with the skill and ability to orchestrate the organisation to do so in real time
- The organisation as a whole possessing the capability, mandate and confidence to adapt and evolve as and when required
- An understanding of the relationships and resources the organisation can and may need to access from others to aid their response
When questioned about the barriers to achieving resilience, a recent Sungard Availability Services-sponsored survey by IDG Connect revealed that effective leadership and immutable IT infrastructures are seen as the two biggest barriers to achieving corporate resilience.
Additionally, as the modern business is almost completely reliant on information technology then there has been little incentive to make other parts of the business agile if they are anchored to IT systems that are rigid, slow and expensive to change.
However, by following a few simple steps, the cloud can now change all this and offer the agility, flexibility and lower lifecycle costs necessary to free up the rest of the organisation to adapt and evolve, even in the face of the most transitory operational disruptions.
As with any new capability, skills need to be developed to harness the benefits, and this is where Sungard Availability Services’ Consultants can help. In addition to helping an organisation’s IT department implement the five key cloud requirements for resilience (see the EIU article for the list), they also provide services such as:
- Resilience Maturity Assessments to help organisations determine their strengths and weaknesses and build a roadmap for the most cost-effective way to develop resilience capability and skills.
- Executive Coaching and Masterclasses to help develop skills such as crisis decision-making, resilience command and control, and how executives can effectively balance obligations to multiple stakeholders while under stress.
- Strategy and Planning - Helping organisations develop plans that are flexible to meet changing situations; make best use of their internal resources and leverage external resources and relationships.
- Exercising & Testing - Providing a safe environment where organisations can develop, test and assess their resilience skills and capabilities.
About the author:
Dr Sandra Bell is Head of Business Continuity & ISDG Consulting (Europe) for Sungard Availability Services. She is a seasoned security and risk professional with over 25 years’ experience of the design and management of strategic, business-friendly security, continuity and risk solutions in the public and private sectors. Her experience ranges from the management of security and protection of data within the UK’s main business process outsourcer to the financial and government sectors to the protection of the largest part of the UK’s critical national infrastructure.