Business leaders are optimistic about resilience despite the pandemic
Global business leaders remained confident about their organisations’ resilience in the year of the pandemic, according to BSI's 2021 Organizational Resilience Index Report.
Despite the challenges brought on by the pandemic, business leaders’ confidence in the resilience of their organisations has risen in 2020, according to BSI’s fourth annual Organizational Resilience Index report.
The index, which is based on a survey of 500 senior leaders around the world, found that leaders remain cautiously optimistic, with more than half (57%) of businesses in the UK, US, and India expecting their financial performance to improve this year.
The concept of organisational resilience refers to an organisation’s ability to anticipate, prepare for, and adapt to both incremental change and sudden disruptions in order to survive and thrive – capabilities that have been put to the test by the events of the past year.
Perceived organisational resilience across organisations globally rose in 2020, with 33% of respondents stating full confidence the resilience of their organisations – that’s 5% cent more than in 2019. Many of the organisations interviewed for the index felt that the measures they had in place prior to the pandemic were successful and helped them survive, stabilise and begin to rebuild.
While 2020 was a difficult year for businesses across the globe, many leaders said their organisations emerged more confident from the pandemic. Within the study, there is a clear association between those reporting a stronger financial performance and those with stronger perceptions of their own organisational resilience.
“2020 was a global test of organisational resilience and powerfully demonstrated the increasing importance of an organisation’s ability to prepare for, and respond to, unexpected or sudden disruption,” said BSI chief executive Susan Taylor Martin. “It’s encouraging to see cautious optimism about the future as business leaders focus on building back better and organisations clearly recognise the value of prioritising the health, safety and wellbeing of employees, clients, and communities.”
Regional factors in recovery and confidence
The pace of recovery is expected to vary in different regions and countries and the index found the same to be true for sentiments regarding financial security and business confidence.
Businesses in Japan and China, for instance, reported similar financial setbacks in 2020, but only organisations in China expect a better year in 2021. Respondents to BSI’s survey suggested that lower confidence in Japan is reflective of business culture rather than market conditions.
Meanwhile, business leaders in India, the US, and the UK have shown optimism, with future confidence in their organisations either doubling or trebling, despite nearly half of organisations reporting worse year-on-year financial results in 2020.
Japan had the largest proportion of organisations reporting a worse year in 2020 and is forecasting the weakest recovery with only 38% expecting a better year in 2021. In contrast, US firms were the least likely to report a reversal of fortunes in 2020, and, alongside India, are the most likely to forecast growth with 64% expecting a stronger 2021.
Measuring impact and performance
BSI's 2021 Organizational Resilience Index Report ranks the 16 elements that make up organisational resilience ranked by impact and performance, with scores indicating the change on the previous year.
Source: BSI's 2021 Organizational Resilience Index Report
The elements respondents saw as as having the highest impact on business resilience in 2020 are:
- Supplier management, up ten places on 2019
- Horizon scanning, up two places on 2019
- Business continuity, up 13 places on 2019
- Innovation, up two places on 2019
- Community engagement, up two places on 2019
The elements respondents felt their organisations performed at best are:
- Financial management, same rank as 2019
- Vision and purpose, same rank as 2019
- Adaptive capacity, up 10 places on 2019
- Leadership, up one place on 2019
- Information and knowledge management, down one place on 2019
You can access BSI's 2021 Organizational Resilience Index Report here.