Rebuilding with resilience: Deloitte report reveals how organizations can better prepare for future disruption; Climate change top concern among business leaders has been saved
Rebuilding with resilience: Deloitte report reveals how organizations can better prepare for future disruption; Climate change top concern among business leaders
- Most global CXOs believe the disruption seen in 2020 isn’t a one-off, and disruptions of similar scale – including those related to the climate crisis – could come with regularity.
- While 2020 gave some CXOs confidence in their organizations’ resilience, a majority still don’t feel completely ready for the next crisis.
- Report identifies five “attributes of resilience” for organizations to cultivate in order to withstand future, ongoing disruption.
SINGAPORE, 25 January 2021— Released today, Deloitte’s 2021 Resilience Report explores how organizations have coped with the tumultuous events of 2020 and identifies the traits that characterize a resilient organization—traits business leaders can cultivate in order to build greater resilience into their own companies. Deloitte’s survey of 2,260 CXOs in 21 countries confirms that organizations that plan and invest in anticipation of disruptions—whether on the scale of an isolated cyber-attack or a full-blown health pandemic—are better positioned to respond, recover, and thrive. It validates the notion that acting early and advanced preparation matter, and offers proven lessons for increasing organizations’ viability.
As we move beyond 2020, rebuilding with resilience will become essential to businesses, as evidenced by Deloitte’s survey, which found that over 60% of global CXOs believe we could see occasional or regular disruptions of this scale going forward. However, less than a third of leaders feel completely confident that their organizations could quickly adapt and respond to future threats.
“Businesses have always faced disruption, but the challenges of the past twelve months have been uniquely unrelenting. The confluence of a global health pandemic, social and political unrest, and worsening climate events has presented organizations with tough choices, new ways of operating, and fundamental strategic shifts,” said Punit Renjen, Deloitte Global CEO. “As we look to recover and rebuild, the road ahead is likely to be even more unpredictable. Organizations that plan and invest in anticipation of future disruptions will be better positioned to thrive.”
The “characteristics of resilience”
Deloitte’s research identifies five attributes of resilient organizations that serve as a strategic, operational, and cultural guidepost. Resilient organizations did not necessarily predict the events of 2020, but they withstood the immense pressures by enabling and promoting nimble strategies, nurturing adaptive cultures, and implementing and effectively using advanced technologies.
The survey suggests that organizations that deliberately build the following attributes into their operations and cultures are better positioned to overcome disruptions and help usher in a “better normal.” They are:
- Prepared. Successful CXOs plan for all outcomes, both short- and long-term. More than 85% of CXOs whose organizations successfully balanced addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020; fewer than half of organizations without that balance felt the same.
- Adaptable. Leaders recognize the importance of having versatile employees, especially after a year like 2020. To that end, flexibility/adaptability was, by far, the workforce trait CXOs said was most critical to their organizations’ futures. Nearly three out of four respondents from organizations that had implemented actions to make their workforce more adaptable—such as by training or reskilling workers, implementing worker redeployment programs, or offering flexible working options—said their organizations are doing a good job at cultivating resilient cultures compared to just about half of organizations who didn’t have such programs in place.
- Collaborative. CXOs indicated the importance of collaboration within their organizations, noting that it sped decision-making, mitigated risk, and led to more innovation. Two-thirds of respondents who said their companies removed silos in their organizations before the pandemic reported managing the events of 2020 better than their peers. Technology was a critical enabler of collaboration throughout the pandemic. Just 22% of surveyed CXOs said their organizations had the technologies needed to facilitate remote working before the pandemic. Forty-two percent developed and adopted these technologies out of necessity during the year.
- Trustworthy. CXOs understand the challenge of building trust with key stakeholders, yet many did not feel they had lived up to the task. More than a third of respondents were not confident their organizations had maintained trust between leaders and employees. In the context of the pandemic, physical, emotional, and digital trust were particularly important. Organizations that prioritized the physical safety of their employees and customers, the mental health and morale of their employees, and the security of their data weathered 2020 better than those who did not.
- Responsible. Most CXOs acknowledge that the business world has a responsibility beyond the bottom line. Eighty-seven percent of CXOs who said they have done very well at balancing all of their stakeholders’ needs felt that their organizations could quickly adapt and pivot in response to disruptive events. That is nearly 50 percentage points more than the proportion of CXOs who said the same at organizations that haven’t done well at balancing their stakeholders’ needs.
Going forward with resilience: climate change seen as top issue for business to tackle
Sometimes leaders don’t know their capabilities until they are put to the test. Case in point, before 2020, only 24% of CXOs felt completely ready to lead through potential disruptions, and only 21% felt completely confident their organizations could quickly adapt and pivot, if needed. In the midst of the pandemic, however, these numbers jumped to 34% and 30%, respectively, indicating that the events of 2020 have given some CXOs a confidence boost about their organizations’—and their own—resilience. Yet, that still leaves 66% of CXOs who don’t feel completely ready to lead and 70% who don’t have complete confidence in their organizations’ ability to pivot and adapt to disruptive events.
That is concerning considering that global CXOs made it clear that disruption is not going away: Three quarters say they believe the climate crisis is of similar or greater magnitude compared to the COVID-19 pandemic. CXOs ranked climate change as the top societal issue for business to tackle over the next decade (47%), followed by health care issues and disease prevention (42%), and gaps in education and training (39%).
“The scope of these threats accentuates the urgent need for leaders to embrace all stakeholders and put the advancement of society at the heart of business strategy,” said Michele Parmelee, Deloitte Global Deputy CEO and Chief People and Purpose Officer. “While change and disruption will be a way of life going forward, leaders who implement the building blocks of resilience now will be best positioned to thrive going forward.”
For more information and to view the full results of Deloitte's 2021 Resilience Report, visit: www.deloitte.com/resilience2021.
The Deloitte 2021 Resilience report is based on a survey of 2,260 C-level executives and senior public sector leaders, including CEOs/presidents, COOs, CFOs, CMOs, CIOs, and CTOs. The survey, conducted by KS&R Inc. in July–September 2020, polled respondents from 21 countries; 45% were from Europe/South Africa, 28% from the Americas and 27% from Asia Pacific. All major industry sectors were also represented in our sample. Additionally, KS&R and Deloitte conducted select one-on-one interviews with global industry leaders and academics.
All private sector respondents came from organizations with annual revenues of US$500 million or more, with nearly a third (31%) coming from organizations with revenues of more than US$5 billion. One in five private sector respondents had the title CEO/president, another 17% were CFOs, and 16% were CIOs.
Among the public sector leaders surveyed, 40% represented organizations and agencies with a budget of US$1 billion or more. Among the public sector leaders surveyed, 21% were CIOs and 19% had the title of director or deputy director.
Thirty-eight percent of respondents were between the ages of 45 and 54, the largest segment represented. Twenty percent of the respondents this year were women.
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