Traditional enterprise risk management models based on historical trends and behaviours are no longer valid by themselves, and agile adaptation to change in a new enterprise resilient management model is now required for organizational survival and success. This trend has been massively accelerated by the impact of the Covid-19 pandemic.
That was the conclusion of a panel discussion, hosted by the business body Resilience First, and Fusion Risk Management. The panel also concluded that there will be competitive advantage for those organizations that are resilient. In a world where the threats are endless but the resources to prevent them are not, the most resilient organizations will thrive during uncertain times, as we have seen during the Covid-19 pandemic.
Robert Hall, Executive Director, Resilience First, said: “Management models based on planning and predicting instead of resilient adaptation to changing circumstances are no longer suited to today’s challenges. The impact of Covid-19 has simply accelerated that change. The nature of modern risk, with its frequently unknown origins and the scale of its potential disruption, makes traditional approaches to risk appear redundant.
Bob Sibik, Co-Founder and Senior Vice President, Fusion Risk Management and event chair, said: “Over the past four decades we have witnessed the evolution and convergence of risk management, crisis and event management, incident response, disaster recovery and business continuity. Finally, we have experienced the first global event that has affected organizations in a multitude of ways, disrupting supply chains, displacing workers from the workplace, disabling the workforce and straining access to information systems.
“During the next decade, the siloed disciplines that have served us in the past will no longer adequately address the needs of organizations to deliver on their commitments. These disciplines must be entirely integrated to become more efficient and effective, and to support the strategic initiatives of the organization. There will be competitive advantage for those organizations that are resilient. In a world where the threats are endless but the resources to prevent them are not, the most resilient organizations will thrive during uncertain times, as we have seen during the Covid-19 pandemic.
“We are being challenged to transform how reliably we operate, and we must conceive new strategies based upon flexibility and agility. This will require new thinking about how we prevent, monitor, respond to, and recover from disruptive events, and how we continue operations that produce desired outcomes during disruptive events. The result will be dynamic and resilient organizations with more durable ecosystems; trusted organizations capable of delivering on their commitments, no matter what.”
Lord Toby Harris, Chairman, National Preparedness Commission, and Member of Advisory Board of Resilience First, said: “Managing to be actively resilient is good management. It means your organization is agile and innovative. It means you are empowering your people and engaging with your community. As a result, your organization is more likely to be efficient. It is more likely to be successful.”
“Planning and responding to risk is not cost free. But not doing so is worse. Or, as John F Kennedy put it, there are risks and costs to action, but they are far less than the long-range costs of comfortable inaction.”
Thomas Wallace, Partner in London, at the management consultancy McKinsey & Company, said: “We need to be prepared from the next black swan event, not just what has come before. We need models and governance to help ensure stability under any kind of crisis. This can mean increased monitoring being built which can alert users to issues as they arise or maybe before they arise and allow proactive responses to be taken.”
“As we build more sophisticated systems and analytics, we should take the opportunity to incorporate more robustness and redundancy into the design of those systems and the wider ecosystem. We will continue to see risk management pushed towards resilience. We will always try to predict what will happen next, but we have to be proactive and robust in the face of the things we cannot anticipate.”
Dr Pippa Malmgren, former US Presidential advisor, said: “The line between efficiency and resilience is a fine line and you don’t know where it is unless you test it. We have been tested at a societal level not only by Covid-19, but also the world economy slowing more generally. People are now putting more weight on resilience than efficiency. This is an incredible mindset shift.”
“What has happened with Covid-19 has in that way been a gift. It has permitted us to move away from this belief that as long as you get more efficiency anything goes. This idea that resilience is not something that happens in a silo on an isolated basis. It’s about the unexpected interconnectedness of things that has become more obvious and apparent to people because of what has happened in the last extraordinary year.”
