Operational Resilience Across Sectors and Disciplines
A necessity in financial services becomes increasingly critical for other industries
Friday, January 22, 2021
By Brian Molk
Simply put, the global shocks of 2020 were unmatched by any time in recent history. Not only did the COVID-19 pandemic reach a scale and longevity that rippled through the way organizations operate, communicate, and safeguard against future disruptions, we simultaneously experienced civil unrest, wildfires, hurricanes and more. This unprecedented time exposed weaknesses in organizations and demonstrated that historically siloed approaches to resiliency put organizations in grave danger.
No one had a plan robust enough for 2020. Those that emerged stronger were those that took an agile, collaborative and, above all, data-led approach to resilience.
Driven by these changes, the industry will see several trends in 2021: operational resilience that blurs the lines between multiple disciplines; real-time decision-making based on data instead of plans; industry collaboration and product suites; a new executive buyer, often in the C-suite; and regulators taking greater interest in resilience across critical industries.
Operational Resilience Goes Multi-Disciplinary
2020 prompted volatile and unpredictable market conditions. The pandemic not only demonstrated the interdependence of multiple areas of risk, but also showed organizations that they must be hyper vigilant about all disciplines simultaneously and holistically.
Organizations recognized they had resources and processes siloed, and that cross-organization communication and coordination is necessary to prove resilience to leadership, regulators and stakeholders. This demonstrated that solution areas (business continuity, risk management, disaster recovery, and more), with their specific expertise and training, each have a role to play - and a strength to bring - in an operational resilience strategy.
As organizations recognize the importance of multiple-discipline focus, the barriers between these practices will break down and come together as operational resilience will become the overarching school of thought in the industry. As a result, products and services will evolve to serve this need.
Data Instead of Plans
If 2020 demonstrated one thing, it is that organizations simply cannot plan for everything - and instead must be ready to resolve problems as they arise. However, those that emerged most successful from disruption were those with good data at their fingertips, ensuring that leaders can make informed decisions quickly.
Gone are the days in which meticulous planning and tabletop exercises were the best approaches to resilience. In 2021, organizations will recognize the value of identifying their data and dependencies, maintaining them in software, and leaning on the technology to simulate the multitude of possible outcomes.
When unplanned events do arise, organizations will depend on technology to play out the plans, understand where they will fail and propose the right changes proactively.
Collaboration and Product Suites
Collaboration among technology and service providers is well underway and will continue. As resilience is increasingly viewed as a highly visible and critical business operation, the industry will realize the benefit of products that span disciplines to better deliver on organizations' needs.
As organizations break down silos between business continuity, incident and crisis management, disaster recovery and various risk disciplines to become one broader resilience practice, industry players will consolidate their respective offerings and increasingly integrate product suites for greater collaboration - and ultimately, greater resilience.
In 2021, we will see resilience become a priority at every level of an organization - especially with executive leadership. Prior to 2020, many companies viewed resilience as an esoteric activity focused on placating leadership and regulators. They relied on a few employees to own all resilience programs, not intimately involving themselves or their operating executives with the details. Resilience has come out of the back room and placed firmly in the boardroom.
The C-suite will be increasingly committed to knowing whether their organization is ready to tackle and recover from disruptions. This means a resilience program needs to span all the appropriate departments and disciplines, speak the language of business instead of practitioners, and answer the highest-level questions of readiness in a single executive experience.
Every Critical Industry
Undoubtedly, operational resilience will begin to take center stage in all critical industries. Over the past several years, the Bank of England, the Federal Reserve and the European Central Bank, among others, have begun a push for regulation not only in financial resilience, but in the resilience of operations for financial services. These bodies recognized the critical impact that their industry has on the well-being of individuals, businesses and the economy as a whole - and are taking seriously their role in making a more resilient economy.
Other critical industries, including energy, communications and information technology (the U.S. Department of Homeland Security identifies 16 critical infrastructure sectors), are similarly positioned. We expect to see regulators taking a greater interest in the organizations in these spaces, to ensure our national and global systems are resilient enough to recover from future events.
Many people are likely relieved that 2020, the most challenging of years, is over. But don't rest on your laurels. Whether it's climate change, political unrest or even pandemics, the world is more interdependent and more exposed than ever. Ensure your organization has learned the lessons of 2020, understands and takes advantage of these trends in 2021, before it's too late.