By definition, a resilient business is the one which survives everything the world throws at it. One might consider that to be a great example of Darwin’s ‘survival of the fittest’ theory. And it’s here that we’re going to have to drop the bombshell – Darwin never said, or wrote that about evolution. A quote often attributed to Darwin, however, is much more apt:
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Unfortunately for Darwin, he didn’t say that either; according to research from Cambridge University’s ‘Darwin Project’. Interestingly, that sentence is actually attributable to a professor of management and marketing, which makes it all the more appropriate when talking about business resilience.
Business resilience has for decades been a topic of concern within IT functions everywhere. How best to back-up and restore critical data? How to recover from an unexpected event like a cyber attack, flood, or fire? How to ensure access to key systems and data when working conditions unexpectedly change? All of these questions are ones which are rightly asked, but which focus on only a couple of key areas; disaster recovery, and business continuity planning.
DR and BCP are both vital, of course; but we think true business resilience is much more than that, and we’ve developed our Business Resilience Quadrant to reflect our thinking on the topic:
One can hardly turn on the TV, read a newspaper or, since it’s 2020, browse through news items on your phone, without seeing articles about the latest cyber-attack on a business, vulnerability affecting millions of users of a popular app or piece of hardware, or tale of business failure due to ‘challenging market conditions’. With so much bad news about, how does one react?
The traditional DR and BCP approaches sit solidly within the bottom two sectors of the quadrant, taking a focus on protecting (the basics) and adapting (responding to the unknown). Both incredibly important, but in isolation indicative of a certain mindset; in this case, primarily protective of the current. A truly rounded, resilient business will display the attributes of all four points of the compass; being protective of their capability; consistent in their ability to deliver it, progressive in developing it, and flexible in the ways in which it is delivered.
When a business or industry sees great change, or a seismic shift in their market, what do they do? If your customer base suddenly declines, there’s really two options available to you.
Firstly, you can retreat into yourself, retrench, sit on your cash reserves and hope they come back, i.e. sitting within the bottom left of our quadrant. Now, we’re not going to say that’s not going to work; in unforeseen circumstances, such as the ones we’re seeing in 2020, there will be some businesses which will do that – and it may be the right approach for them. Take automotive sales – when customers aren’t travelling, they don’t buy cars. If you’re not allowed to open, they can’t buy cars. So you sit back, enjoy the sunshine, and wait until a) people start moving around again and b) you’re allowed to open and sell them cars.
Secondly, you can look at the situation, anticipate how it will develop, and put in place means to mitigate it; innovating within the top right hand sector of the quadrant. They may be short term, if the situation is going to go away; for example, using 2020’s global pandemic again as an example (I know, everyone’s bored with it, but it’s a good example!), one might be able to adapt in a small way to the situation by engaging with customers differently (selling cars over Skype, Zoom, or the phone, for example and delivering them ‘touch free’).
Both of these approaches will work in the short term; but which is the best approach if things drag on, or the market influence grows or becomes a permanent shift? Clearly, the business which tries to wait things out will struggle… depleted cash reserves, being behind the curve when it comes to changing how they work, even finding it hard to access the equipment or skills they need to help them change will all be negative influencing factors to those of a protective mindset.
The innovator puts themselves in a position of power. They’re ahead of the curve, trying something new, getting all the attention. They’re maybe getting it right first time, but equally may fail at some things – but they’ll fail quickly and move on to something else. They’ll be open to doing new things, trying a new approach, and won’t waste time waiting for something to happen – they’ll be making things happen and driving change themselves. They will be horizon scanning and anticipating the next influence with which they’ll have to cope, putting in place measures to allow them to flex, to adapt, to develop as those things come along.
We can see that being able to pivot, to change ways of working, to diversify, and engage in different ways are all great methods to ensure survival – in theory; but there are plenty of real examples. Nintendo, for example, were once a major player (pun intended) in the playing cards business. A decline in their popularity meant looking for new markets and new products – and we know where they are today. Microsoft, once known for packaged, off-the-shelf operating systems and productivity software, have diversified into hardware, gaming, and communications – as well as moving to a ‘cloud’ services, pay-as-you-use revenue model. Even YouTube didn’t start out as we know it – its origins being as a video dating platform which evolved rapidly into the streaming and sharing community we’re all so familiar with today.
Businesses which can adapt, pivot, and change take a different approach to resilience which we can all learn from – but we still need to get the basics right. A truly resilient business considers all four sectors of the resilience quadrant – but innovation, and the willingness and propensity to constantly evolve, adapt, and shift focus, is truly the best means of defence against the unknown.