Resilience in the Face of Geopolitical Threats

For the last two years, it feels like we’ve lived in a state of ongoing crisis as unexpected global events have disrupted organizations in every part of the world. From a global pandemic and massive supply chain disruptions to rising inflation/cost of living and large-scale cyberattacks that have stopped businesses in their tracks, organizations large and small have faced numerous challenges. Consequently, operational resilience has never been so vital. Now a geopolitical crisis is also demonstrating the critical need for resilient and robust organizations that can adapt and flex quickly to make informed decisions and actions.

The crisis in Ukraine is multifaceted, affecting personnel safety, supply chains, vendors, and the economy. It’s critical for organizations to assess the immediate and potential future effects and take swift action.

Assess Impact

The first step in formulating a response is to assess the impact of any threat or disruption and fully understand which business operations, clients, vendors, and partners could be affected.

Employee safety should be top priority, says Fusion RM’s Bogdana Sardak.

Organizations with offices in or near areas affected by the geopolitical crisis must consider how daily operations will be affected. Employee safety and security should be the top priority. Businesses must also consider that government intervention such as sanctions, financial limitations, or government restrictions may hinder the organization’s ability to function as usual.

Even if an organization does not have direct ties to the affected areas, it does not exist in a vacuum. Firms must identify the impact on business-critical vendors and how it directly affects the business. The effect on vendors and their supply chain may not be instantly apparent, so organizations must proactively reach out to third-party providers and inquire about their operations and resilience plans.

Crisis Calls for Action

Crisis requires a response. That’s why it’s critical that every business has a comprehensive crisis and business continuity plan in place that was developed with key stakeholders and can be quickly activated to ensure the business can continue operations.

There will be many moving parts in this process. Activating subgroups and subtasks to orchestrate the complete business response is critical to remain organized and efficient. Subgroups should take on separate tasks of the overall business response, such as vendor alternatives and geographic office logistics, and engage with key stakeholders of the C-suite for critical decisions and approvals. Keeping the C-suite updated during the activation of plans will be critical for success.

Understanding the vendor and supply chain dependencies, and to project potential impacts during disruptive events, requires mapping of business processes in detail; preferably this action happened before the crisis. Organizations should be focusing on critical business processes which support critical services and products. If an organization does not have a complete vendor/supply chain map to its critical products and services, it must use existing data on critical business services and products and engage from that point.

Engaging with essential vendors and fully understanding their position and operations will direct the next steps. In some cases, vendors can continue operations as usual, but in others, an alternative supplier may have to be found – and quickly.

Prepare for the Long Term

The effects of COVID have shown the importance of having a long-term, high-level plan for an economic downturn, and for leaders to be prepared for when cash flow and the market are not acting favorably.

Plans are not the end goal. They are a good exercise; it is the muscle-memory response to the goal that makes an impact in times of crisis. Organizations must be able to look at a plan, understand how the current situation deviates from the plan, and quickly act. It’s critical to have data on how operations run and understand all moving parts that contribute to the business as usual. Mapping this data in an organized manner will enable action without delay when long-term disruptions affect an organization. Understanding how an organization works provides the knowledge to put it back together.

Process mapping starts within an organization and extends to the internal and external dependencies, including vendors, supply chain, applications, people, and physical sites that support daily business functions. Simply knowing who oversees what functions and tasks are not enough. One business process can have multiple teams in different regions/countries and use different vendors for the same product/service simply because of the geographical difference. You must completely understand operations at every level and have clear upstream and downstream dependencies. Know which vendors you rely on for which operations to recognize the impact on a business in times of crisis and to inform thought-out decisions.

Prioritize Resilience

Operational resilience provides the tools to understand operation data points and locations. Once an organization understands its data, it can be effectively mapped and analyzed for multiple situations regardless of the nature of the disruption. Whether a geopolitical crisis, natural disaster, or supply chain shortage, resilience provides the ability to digest data and take swift action. Proactive planning provides an opportunity to have multiple options that are pre-discussed and pre-approved for the worst-case scenario.

Businesses cannot achieve resilience without fully understanding their critical processes. After identifying critical processes, they must discuss and plan for when business as usual halts. Critical operations typically include people, applications, sites, and suppliers that enable an organization to fulfill its brand promise to customers under normal conditions. By prioritizing resilience, organizations can ensure there is no single point of failure.

Pivot and Adapt

Over the last two years, wide-ranging crises have affected almost every organization in some way. We should recognize that disruptions are here to stay; it’s no longer a question of if, but when will another crisis occur. Never has it been more important to be able to pivot and adapt to any disruption.

It’s critical that businesses today understand the global threat landscape so they can proactively respond and get ahead of potential disruptions. Sometimes, over-reaction may present the best option. Predictable crises give firms the time and ability to respond before the situation calls for a reaction. Monitoring the global landscape continuously offers organizations the time to act before imminent danger, especially when life and safety are at risk.

People-First Approach

When preparing for any disruptions, organizations should put people first. With the proper data, preparedness, and plan, firms can seamlessly adapt new operation models and logistics and worry about what truly matters: people and safety.

No business can exist without its employees. By showing genuine care for employees and their families who may be affected by a crisis, organizations can boost employee morale. “We are all in this together” goes beyond social media posts or other marketing content. By displaying genuine care, employee and customer loyalty will increase well beyond the period of disruption.

Organizations should also be brave and stand up for what they believe is morally right. Do not be the one lagging while everyone is taking a particular stance out of fear. It is not about politics; it is about caring for human life and putting people first.

Looking Ahead

A geopolitical crisis like the one in Ukraine evolves by the minute. The situation a business faces today may be different tomorrow. Organizations must prioritize agility in these situations to flex and adapt as new developments occur.

If you have not started your resiliency journey yet, this is the perfect time to start and be ready. And, with the appropriate preemptive and proactive measures in place, organizations can prioritize what really matters – human life.

Bogdana Sardak is director of risk, Fusion Risk Management.