Time for a collective re-think on Operational Resilience?

Sword GRC Blog

Time for a collective re-think on Operational Resilience?

No-one could have predicted the impacts – health-wise, financially, economically – caused by COVID-19. Organizations of all sizes and across every sector have had to manage change with great speed and agility, embracing the challenges of remote working, revised logistics, and supply chains, reconfigured work environments, and new operating procedures. Resilience was suddenly pushed up the agenda as businesses sought to navigate risks wrought by the pandemic and mitigate their impacts.

An IBM-sponsored article entitled ‘The modern business: reimagining resilience in a post-pandemic”, published at reuters.com, suggests: “Many enterprises have reconfigured and reinvented themselves seemingly overnight – some re-energised by accelerated progress. These are the resilient ones. Reimagining resilience in a post-pandemic world means greater agility and flexibility than ever before and systems and processes that allow organisations to scale innovation at speed.”

The sentiment is echoed in the introduction to the Investment Association’s ‘Effective Governance of Operational Resilience’ whitepaper, in which Pauline Hawkes-Bunyan, Director of Business, Risk, Culture, and Resilience said: “The COVID-19 pandemic and the rapid transition to remote working has placed operational resilience directly in the spotlight. Our industry has remained resilient in face of this test of a ‘severe but plausible’ scenario and also identified those individuals responsible for implementing an operational resilience strategy. However, the message from the regulators is that the work does not end here. It is more apparent than ever that having a clear tone from the top can help embed a culture of resilience across an organisation.”

 

Survival of the fittest

“In these times of the ‘new normal’ many businesses are questioning how to be prepared for what may be next on the horizon. The ability to survive, be resilient to new and emerging threats and, best-case scenario, to grow and thrive are front-of-mind,” said Jenny Ritson-Smith of Sword GRC. “And it’s not just pandemic-related impacts that are a cause for concern. In what may be considered a recovery period, businesses are monitoring their risk mitigation strategies carefully in a bid to improve their resilience to further upheavals.”

Global management consultancy, McKinsey & Company suggests that leading businesses are building new levels of resiliency in three core ways:

  1. By revisiting their supply base and global asset footprint
  2. By moving quickly to digitize operations end to end
  3. By transforming business models to achieve cross-functional agility in operations

“The very definition of resilience – the ability to recover quickly from difficulties – is being deployed across these companies with striking speed. Now is not the time to hit pause. Now is the time to reimagine supply chains, adapt and overcome the longstanding idea that there needs to be a trade-off between efficiency, growth, and resilience.” *

 

Risk frameworks and resilience

It would seem that the pandemic has put risk management frameworks to the test and businesses have had to re-think their approaches to risk management. Operational risks – covering a range of issues such as regulatory compliance, employee health, and safety, cybersecurity, and supply chain resilience – clearly demand just as much rigor in their management as non-operational threats.

“Enterprise risk management (ERM) solutions can help businesses to take a joined-up approach, allowing risk management to be consolidated across functions and, critically at this time, providing a high-level framework that offers an organization-wide view of vulnerabilities, from which resilience can be developed,” said Ritson-Smith.

 

Download your FREE Operational Resilience whitepaper

The Institute of Risk (IOR) considers operational resilience to be a component of operational risk and the latest whitepaper in its Operational Risk Sound Practice Guidance series explores this theme.

Download your copy now.

 

* The need for operational resilience | McKinsey