The past two years of the COVID-19 pandemic have had significant impacts on the way we work and the flow of goods and services around the world. While businesses and the economy overall have responded well to dramatic and unforeseen disruption, fears of scarcity – from natural resources as a result of climate change, to ongoing supply chain issues and human capital concerns amidst the “Great Resignation” – are growing more and more pervasive.
For business leaders, the key to success in this “next normal” is operational resilience – building a responsive, agile, and purposeful organization in the face of existing challenges and those over the horizon. Here are three major changes impacting businesses now – and how to tackle them productively while mitigating major risks to business operations in the near term.
Connect with Employees – and Meet Their Shifting Needs
The relationship between employers and employees has changed – perhaps alternately. Many employees have reevaluated how they want to spend their time; in an already challenging and competitive talent market, businesses must respond to these shifting priorities. Whether they want to spend more time with family, are more conscious of mental health, or are increasing looking for a corporate purpose that aligns with their personal values, prospective and current employees have new and different needs.
The pandemic accelerated remote work, and many would prefer not to go back to the office, at least not full-time. Employees value the flexibility which hybrid work has enabled. For example, Deloitte’s Gen Z and Millennial Survey found that three-quarters of respondents would prefer a hybrid or remote work pattern. Many feel that having this flexibility helps them achieve better work/life balance, saves them time and money, and allows them to spend more time with family. At the same time, in-person connections are still important for the continued development of people and workplace culture. Companies need to find the right balance between providing flexibility and offering strong in-person experiences.
As the world of work continues to evolve, business leaders should also reexamine their corporate culture. In this new landscape, it is crucial for organizations to have a genuine purpose that extends throughout their operations and goes beyond profitability. The majority of employees expect their company to have a positive impact on society that goes beyond their core business model. Culture and purpose will continue to become more critical in attracting and retaining professionals. Like trusted relationships, these take time and will require a variety of approaches. Encouraging hybrid and flexible work, emphasizing social justice, and prioritizing sustainability can all help ensure businesses stay connected to their employees.
Scenario Planning and Risk Management Come to the Fore
Second, businesses have recognized the importance of scenario planning and risk management. The COVID-19 pandemic has dramatically underscored the value of forward-thinking risk management strategies; businesses that responded well to the pandemic tended to be agile, nimble, and proactive organizations that had effective plans in place to respond to crises, no matter how unforeseen.
There remains a great deal of uncertainty in the world right now, and none of us can reliably predict the future. However, the value is not in trying to make an accurate prediction but rather examining the potential scenarios and preparing for them. We are better off embracing uncertainty and preparing plans to adapt. This will require investing in new risk management capabilities, scenario planning, and even advanced sensing tools to recognize and respond to risks nimbly and quickly. Companies that can embrace this uncertainty and be prepared to invest in uncertain times will often see excess returns from those investments.
Businesses in the modern era must be unfraid to consider the worst. Recent events, including Russia’s invasion of Ukraine, have shown that geopolitical and external events can still have an enormous impact on business operations. Focusing solely on low costs can be problematic in today’s uncertain world. Building resilience and flexibility into one’s operations, combined with a cost-conscious approach is more beneficial.
Social Progress and Operational Resilience Go Hand in Hand
Third, consumer demand for sustainable supply chains, broad geopolitical uncertainty, and unforeseen disruptions like severe weather and disease outbreaks have caused a fundamental shift in supply chain management and operations. Powerful hurricanes, resurgent COVID-19 variants, and conflict have all impacted global business in the past several months. Savvy businesses will use all the tools at their disposal to improve reliability, foster social accountability throughout their supply chains, and enact broader global change.
A key part of that is to ensure social accountability is prioritized throughout a company’s supply chain. Achieving transparency throughout the supply chain is an important goal. Where full transparency is not possible, sophisticated AI-based sensing tools can help organizations better understand climate, sustainability, and social justice factors as they pertain to suppliers and partners. Proactively monitoring supply chains on these metrics can help companies spot disruptions before they significantly impact operations – and respond accordingly.
The war in Ukraine has also reminded us how fragile supply chains can be; Ukraine produces about half of the neon gas used in semi-conductor manufacturing., and given the wide use of computers in many finished products, this has the ability to disrupt many industries. Organizations that have prioritized resilience and have extensive visibility into their supply chains will be best positioned to weather this and future challenges.
There’s Never a Better Time to Get Started
While talent and culture, risk management, and building sustainable supply chains may seem like disparate tasks for business leaders looking to thrive in the age of scarcity, there is a clear throughline between them: investing in and rethinking each will give organizations a more resilient culture and more responsive operations in the future.
While the “Great Resignation” may be temporary, employee expectations of corporate culture have changed – perhaps for good. Similarly, even as pandemic-related risks fade and businesses approach a sense of normalcy, other risks will arise, and they must be prepared to face them.
These challenges are difficult that will rightly keep business leaders up at night. Building a more resilient organization may just be the key to sleeping more soundly.