Operational resilience: why should small to medium businesses care
In today’s dynamic business landscape, operational resilience is not a luxury—it’s a necessity. We live in the era of constant change. Disruption to our daily lives and our businesses is inevitable. 91% of businesses were disrupted in the last two years according to PWC’s recent global Crisis and Resilience Survey. Building operational resilience ensures that all businesses, not just the deep pockets at the big end of town but the small and medium ones too, can weather storms, adapt swiftly, and emerge stronger.
Why is this important? Because in Australia small to medium businesses employee around 66% of our working population and contribute more than half of the annual GDP. So, it’s important for the individuals, businesses, communities, and the nation as a whole.
The pandemic amplified differences between leading companies and the rest. Small to medium businesses with financial resilience, organizational capabilities, and strategic focus fared better. They invested wisely and adapted swiftly.
In my experience small to medium businesses demonstrate a remarkable ability to be resilient. To reinvent themselves quickly. They’re leaner and less hierarchical, therefore it can be easier to pivot and capitalise on opportunities. But this is reactive resilience. After the fact. They’re surviving.
To thrive, though, is slightly different. It is to plan for long-term viability. To monitor strategic shifts, anticipate your vulnerabilities and take pre-emptive action to protect or adapt your crown jewels (business critical processes, products, services). To be ready.
Resilience is one of the top strategic priorities for 89% of businesses. Driving this, of course, is the global state of permacrisis to use Collins Dictionary’s word of the year in 2022. Additionally, Australia, the United Kingdom, and New Zealand, among others, have introduced regulations requiring entities in critical infrastructure sectors – including energy, financial services, healthcare, transport, and communications – to prioritise operational resilience. These regulations aim to ensure the uninterrupted availability and reliability of essential services, with non-compliance resulting in substantial penalties.
As a result, we’re increasingly seeing supply chain impacts of these regulations. There are many small to medium businesses in those supply chains. So, regulation compliance is likewise inevitable. Are you in a regulated essential service supply chain? Do you want to be in the chain ahead of your competitors? Have a good long hard think about how you can deepen your organisational resilience and demonstrate compliance. Truth is that the cost of compliance is far less costly than non-compliance – think fines and unwanted publicity.
Operational resilience isn’t an abstract concept—it’s a lifeline. Planning for the long term can be a blind spot for small to medium businesses because it may interrupt the daily battles with cashflow, customers, resources, optimism bias, etc. Which is why we’ve developed Riskfacta. To make it easy and affordable for small to medium businesses be ready.
There is no doubt in my mind that small to medium businesses can build organisational resilience, navigate crises, and emerge stronger. It isn’t a one-time effort—it’s an ongoing commitment to adapt, innovate, and thrive.
#resilience #risk #riskmanagement #crisismanagement
Riskfacta insights are written by experienced professionals with decades of direct experience. AI may have been used in early research and data gathering, with all work then validated and supplemented by our subject matter experts.
