6 key areas of business resilience
Resilience is a real buzzword at the moment for businesses and their leaders. A resilient business is one which can overcome problems, address challenges head on and make the most of opportunities. Regardless of current affairs each and every business operates in an uncertain, ambiguous, volatile and complex environment and therefore a key trait of all businesses is resilience. We must also not forget the leader in this too. At the heart of every resilient business is likely to be a resilient leader.
So, what does resilience mean?
1. Workforce resilience
A business’ staff are its most important asset – so looking after their well-being will support any business’ overall resilience.
Engaging leadership and good people management is at the heart of building workforce resilience – as is the way that a business develops and manages its talent.
2. Leadership resilience
We have separated out the resilience of a business’ leader and its staff for many reasons. A resilient leader, one who can take the ups and downs, the highs and lows of leading an SME is key to ensuring that a culture of workforce resilience is adopted and maintained. A key tip around building leadership resilience is to ensure that you have a good support network as a leader – this maybe in the form of support at home, peer support with other leaders or the utilisation of an external coach.
3. Operational resilience
This is probably the most familiar of the factors. This is about the need to identify and manage risks and contingency planning to protect against unexpected events.
The indicators of operational resilience are wide and varied and more often than not dependent on the industry in which the business operates. Consider risks that are industry specific, competitor specific and come from the outside world in general.
4. Commercial resilience
Commercial resilience in business considers factors such as customer retention, customer lifetime value, customer attraction and its costs. A strongly resilient business will consider how “balanced” its customer profile is – does one or two customers make up 80% of its income and as such their loss would have a critical impact to the business.
5. Financial resilience
Maintaining a viable cash reserve to deal with future issues is at the heart of financial resilience. Can the business survive financially if a significant crisis happens? Can the business survive if it loses key contracts?
6. Future resilience
This is the means by which a business ensures it remains competitive in the future – taking into account elements of a PESTLE analysis – what could happen politically, economically, socially, technologically, legally and environmentally. Also consider here, changing customer needs and increasing competition both leading to an increased need to innovate and change.
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