There’s a very good chance that you’ve been talking about resilience in and around your business for the last few years. Covid made sure of that and now, Load shedding! They say whatever doesn’t kill you, makes you stronger and if there’s one thing South African small business owners are good at, it’s being resilient. But, how resilient is your business?
The University of Queensland, in Australia, published a recent article on building business resilience this year. This talks about the real effects of unprecedented threats to supply chains, customer bases, cybersecurity, and critical infrastructure over the past few years. But in South Africa, we have an extra load to bear and a few local conditions to hurdle.
Many businesses and practices have proven that a focus on resilience is increasingly important to ‘bounce back from disruptive events’, such as the global pandemic. In this article, we share insight on the following:
- What is resilience?
- How do you manage and measure it?
- How do you build a more resilient business?
What is resilience?
Business resilience can be defined as having the ability to predict, plan, react, and adjust to changes and disruptions in the business environment. If a company can effectively develop its resilience, it can eventually secure its ability to accomplish its goals and objectives, regardless of the unpredictable events and changes taking place.
How do you manage and measure business resilience?
Traditional management methods have some significant drawbacks that make it difficult to assess and achieve resilience:
- Many conventional companies have been designed to increase shareholder value from dividends and share value. Very few organisations really aim to calculate resilience beyond particular material threats.
- Companies and shareholders also concentrate on optimising their short-term returns. However, resilience requires a multi-time perspective: to forgo a certain amount of productivity or success now for the sake of more sustained performance in the future.
- Businesses have focused primarily on designing and implementing stable strategies that perform well when the causal relationship is simple, predictable, and unchanging. Resilience deals with what is uncertain, changeable, and unpredictable – which can have serious implications.
Managing resilience requires more than just coming up with new ideas or resources to apply to today’s approaches. It needs a different business model – one that embraces complexity, uncertainty, interdependence, systems thinking, and a multi-time scale perspective.
How do you build a more resilient business?
There are 5 ways that resilience can be improved:
- Leadership and strategy – Building resilience, starts with awareness. This is awareness of your business vulnerabilities and an overview of the possible effects of these on your day-to-day. A SWOT ANALYSIS can help you to see these easily.
- Operations – Operational resilience can be improved by some forward thinking. By recognising possible concerns inside your practices and implementing a risk reduction and management plan and in some instances, an alternative plan or a Plan B.
- People – Employees and their expertise are essential to your business resilience. Investing in your staff is the only path forward. Ability levels, turnover of workers, work satisfaction, training, and learning opportunities should be closely controlled. Ensuring that people are involved in agile change programs, and keeping them motivated, will yield rewards for every business. Examples of this are having a generator or inverter to ensure the lights are always on when they might not be at home. This creates a safe and credible workspace for your staff to return to when things may not seem to be working everywhere else.
- Relationships – Beyond the people that work for you are the people that work with your business. They are equally important to the success of your day-to-day and you rely on them to support your trade effectively, and also when times are tough. Build strong relationships and solidify honest, open communications with your stakeholder network and suppliers to build robust business communities ways in times of need.
- Build TRUST – People and suppliers are more committed and more likely to endorse, promote, invest, and partner with businesses they trust and grow with. Trust allows businesses to innovate, experiment and learn faster together and builds a resilient backbone for recall, reputation, and respect.
Let’s not forget, many businesses already take on some form of risk management but mostly to understand the effects of specific, known risks. Your business’s resilience should also be to deal with unknown risks, be able to adapt and change any external stress, and possibly turn it into an opportunity to succeed.
In 2023, we have even more reason to be resilient. South Africa feels the burn from global concerns and very unique local ones too. Navigating a way forward by visualisation and protecting your business from hardships can be an investment that not just saves, but grows your business. This year, you might like to consider a revolving capital facility. to help create flow and more certainty with your cash or perhaps you will help yourself along with trade credit to take some of the risk away from your business. Whatever you choose to do, be sure to build your small business with the resilience and fortitude it deserves.