Business Resilience – Resilience, But Right

The resilience of companies to absorb shocks and use them to build something new has always been a competitive advantage. One that has only strengthened itself in the digital present. In Asia, in particular, leading companies are turning pandemic-induced changes into opportunities for future value creation. This is also due to the long-cultivated roots of being agile, adaptive, and determined in the face of adversity and uncertainty.

New German describes “business resilience” as the ability of a company to continue to generate profit over cyclical and structural changes in supply and demand. And it will become the key to survival for many businesses as Covid-19 has widened the gap between those at the top of the economic profit performance curve and those at the bottom.

Welcome To The VUCA World

The new economic reality has become more volatile, uncertain, more complex, and more ambiguous. More than ever, companies need to make decisions under risk and uncertainty, continuously learn and adapt.

Each of us has experienced the factor of insecurity first-hand in the last few months. What happens after the lockdown? How and at what speed will the economy reopen and recover? Is there another lockdown coming? This uncertainty leads to reluctance and negative expectations on the part of consumers and ultimately decision-makers in companies.

An example of the complexity is the temporary chip bottleneck in the automotive industry. It could not be resolved quickly because the orders were based on incorrect assumptions, and other customers reserved larger quantities. Therefore, the production capacities, which Corona temporarily restricted, were not sufficient. In addition, there were logistics bottlenecks due to the recovery of the economies. And if the Suez Canal is also blocked …

We have long seen an ambiguity in severe uncertainty in the economic indicators and forecasts. An absolute cacophony of the opinions of different experts comes together and promises us inflation or warns of stagflation or even deflation. The periods that can still be foreseen with a certain degree of confidence are getting shorter and shorter.

With VUCA Against VUCA

At first glance, VUCA paints a very gloomy picture, as it is a macroeconomic description of the state of a new, challenging reality. But the answer for companies could also be VUCA, only that the acronym here stands for Vision, Understanding, Clarity, and Agility.

Of course, digital technology and leadership also play an essential role. Every third digital pioneer in German medium-sized companies is already relying on innovation with external digitization units. Most of these agile “innovation hubs” are supposed to create new customer experiences, digitally transform the business model and ward off external disruptions.

Despite all the external unplayability, the inner vision must not be missing in the end. Companies need a stakeholder-oriented view of the economy and its development and new demands that arise from it.

Resilience Is Not The Same As Resilience

Adaptability is a much more appropriate characteristic of the term, achieved through new thinking, openness, dynamism, flexibility, speed, and adaptive skills. Not only must production or your processes remain adaptable, but also the business focus and vision.

As a first step, companies must continue to work on abandoning silos and top-down structures. Purpose and customers must be the focus. And no, everything does not always have to be adapted to the new economic reality at once. But companies have to start and ideally start in an area that is already willing to change. Further, agile and adaptive processes could be the first to find their way here. With the first sense of achievement, the “project” is then expanded. Experience has shown that it makes little sense when companies fight against resistance. The majority of the workforce comes along voluntarily after a while because the reorganization is simply better. In the end, there will still be blockers, but they will voluntarily leave the company as hard as it sounds.

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