Deloitte report reveals how organisations can better prepare for future disruption...
Most global leaders (60%) believe the disruption seen in 2020 isn’t a one-off, and disruptions of similar scale – including those related to the climate crisis – could come with more regularity. However, less than a third of leaders feel completely confident that their organisations could quickly adapt and respond to future threats.
The Deloitte’s 2021 Resilience Report explores how organisations have coped with the tumultuous events of 2020 and identifies the traits that characterise a resilient organisation—traits business leaders can cultivate in order to build greater resilience into their own companies. Deloitte’s survey of 2,260 C-Suite executives in 21 countries confirms that organisations that plan and invest in anticipation of disruptions—whether on the scale of an isolated cyber-attack or a full-blown health pandemic—are better positioned to respond, recover, and thrive. It validates the notion that acting early and advanced preparation matter, and offers proven lessons for increasing organisations’ viability.
Commenting on the publication of the report Harry Goddard, Chief Executive Officer of Deloitte Ireland said, “We all know that the one thing that is certain in life is change, but what we have all faced in 2020 has been uniquely challenging. Business leaders have had to explore new ways of operating including switching from physical to digital channels to meet customer demands, reconfiguring supply chains and shifting to remote working. As resilient Irish businesses look to recover and rebuild, the road ahead is likely to be even more unpredictable. Organisations that plan and invest in anticipation of future disruptions will be better positioned to thrive.”
The “characteristics of resilience”
Deloitte’s research identifies five attributes of resilient organisations that serve as a strategic, operational, and cultural guidepost. Resilient organisations did not necessarily predict the events of 2020, but they withstood the immense pressures by enabling and promoting nimble strategies, nurturing adaptive cultures, and implementing and effectively using advanced technologies.
The survey suggests that organisations that deliberately build the following attributes into their operations and cultures are better positioned to overcome disruptions and help usher in a “better normal.” They are:
Prepared. Successful business leaders plan for all outcomes, both short- and long-term. More than 85% of those surveyed whose organisations successfully balanced addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020; fewer than half of organisations without that balance felt the same.
Adaptable. Leaders recognise the importance of having versatile employees, especially after a year like 2020. To that end, flexibility/adaptability was, by far, the workforce trait business leaders said was most critical to their organisations’ futures. Nearly three out of four respondents from organisations that had implemented actions to make their workforce more adaptable—such as by training or reskilling workers, implementing worker redeployment programs, or offering flexible working options—said their organisations are doing a good job at cultivating resilient cultures compared to just about half of organisations who didn’t have such programmes in place.
Collaborative. Business leaders indicated the importance of collaboration within their organisations, noting that it sped decision-making, mitigated risk, and led to more innovation. Two-thirds of respondents who said their companies removed silos in their organisations before the pandemic reported managing the events of 2020 better than their peers. Technology was a critical enabler of collaboration throughout the pandemic. Just 22% of those surveyed said their organisations had the technologies needed to facilitate remote working before the pandemic. Forty-two percent developed and adopted these technologies out of necessity during the year.
Trustworthy. Business leaders understand the challenge of building trust with key stakeholders, yet many did not feel they had lived up to the task. More than a third of respondents were not confident their organisations had maintained trust between leaders and employees. In the context of the pandemic, physical, emotional, and digital trust were particularly important. Organisations that prioritised the physical safety of their employees and customers, the mental health and morale of their employees, and the security of their data weathered 2020 better than those who did not.
Responsible. Most business leaders acknowledge that the business world has a responsibility beyond the bottom line. Eighty-seven percent of C-suite executives who said they have done very well at balancing all of their stakeholders’ needs felt that their organisations could quickly adapt and pivot in response to disruptive events. That is nearly 50 percentage points more than the proportion of C-suite executives who said the same at organisations that haven’t done well at balancing their stakeholders’ needs.
Looking forward
Sometimes leaders don’t know their capabilities until they are put to the test. Case in point, before 2020, only 24% of C-suite executives felt completely ready to lead through potential disruptions, and only 21% felt completely confident their organisations could quickly adapt and pivot, if needed. In the midst of the pandemic, however, these numbers jumped to 34% and 30%, respectively, indicating that the events of 2020 have given some a confidence boost about their organisations’—and their own—resilience. Yet, that still leaves 66% of C-suite executives who don’t feel completely ready to lead and 70% who don’t have complete confidence in their organisations’ ability to pivot and adapt to disruptive events.
That is concerning considering that global business leaders made it clear that disruption is not going away: Three quarters say they believe the climate crisis is of similar or greater magnitude compared to the COVID-19 pandemic. They ranked climate change as the top societal issue for business to tackle over the next decade (47%), followed by health care issues and disease prevention (42%), and gaps in education and training (39%).
“January is always a time to take a moment to reflect. It is also a time to plan ahead to meet future challenges and likely disruptions. One real and meaningful approach would be for businesses to adopt a truly purpose-led strategy that embraces all stakeholders and puts the advancement of society at the heart of business strategy for the benefit of all.”
For more information and to view the full results of Deloitte's 2021 Resilience Report, visit: www.deloitte.com/resilience2021.
Methodology
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The Deloitte 2021 Resilience report is based on a survey of 2,260 C-level executives and senior public sector leaders, including CEOs/presidents, COOs, CFOs, CMOs, CIOs, and CTOs. The survey, conducted by KS&R Inc. in July–September 2020, polled respondents from 21 countries; 45% were from Europe/South Africa, 28% from the Americas and 27% from Asia Pacific. All major industry sectors were also represented in our sample. Additionally, KS&R and Deloitte conducted select one-on-one interviews with global industry leaders and academics.
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All private sector respondents came from organizations with annual revenues of US$500 million or more, with nearly a third (31%) coming from organizations with revenues of more than US$5 billion. One in five private sector respondents had the title CEO/president, another 17% were CFOs, and 16% were CIOs.
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Among the public sector leaders surveyed, 40% represented organizations and agencies with a budget of US$1 billion or more. Among the public sector leaders surveyed, 21% were CIOs and 19% had the title of director or deputy director.
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Thirty-eight percent of respondents were between the ages of 45 and 54, the largest segment represented. Twenty percent of the respondents this year were women.
About Deloitte
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte organization”) serves four out of five Fortune Global 500® companies.
Article Published: 26/01/2021