The aim of this section is to provide an understanding of the benefits and impact of developing business resilience. It is intended to answer such questions as:
- How will business resilience help day to day business performance?
- How will this impact on how a business develops?
- How will you know that it’s having a positive effect on your business?
Understanding the Benefits and Impact of Developing Business Resilience
Putting strategies into place can often feel like laborious, long-winded and costly chores, so you want to know that the effort you put in might one day be rewarded. Or even better, rewarded on an ongoing basis. In this section we’ll address what developing business resilience can mean for your small enterprise.
How Business Resilience Helps Day to Day Business Performance
Here are a few points for starters:
- Improve your goods and service
- Protect existing customer base and opens up opportunities with new ones
- Increase efficiency of processes
- Cut costs and drive profitability
- Stay clear of legal trouble
- Lower insurance premiums
- Peace of mind for customers, suppliers, shareholders and management
- Job security for staff
A key driver in many business’ decision to build a strategy for resilience into their organisation is the lure of gaining a competitive advantage from it. When you write a business plan you work hard to think of all the unique selling points that you can use to pitch for work from customers and clients. So why wouldn’t you use it as a way to persuade customers that you are reliable and justify spending money on? It’s no surprise that using relevant accreditation and certification to prove that you have safeguarded your own business practices and supply chain is making its way on to more and more marketing material.
Proving your worth to customers and clients isn’t the only way a business can benefit from developing a resilience plan either. Auditing your organisation in the ways we have already discussed often reveals weaknesses which can be eliminated, and highlight new sales channels or supply options to reduce inefficiencies. All this makes for a more resilient and cost-effective business.
Insurance premiums may even be lowered for businesses with an effective resilience plan incorporating continuity management. According to the British Insurance Brokers’ Association and UK Cabinet Office 2012, more than 80%of brokers state that discounts on premiums are given when continuity plans are in place. In the wake of events such as Hurricane Katrina insurers are increasingly focused on a business’ ability to bounce back from a crisis presenting a cost-saving opportunity. In one survey 31% of respondents said that insurance companies played a significant role in influencing the development of their business resilience plans.
Under some circumstances, however, financial gain won’t be seen by integrating developing a business resilience plan. But it is still important for businesses to weigh the potential cost of failure against the outlay for investing in the future of the company. Count up the money lost in sales, damages, wasted time, fines incurred, reputational damage and danger to life as a result of a crisis and suddenly it doesn’t seem such a bad idea to put some time and effort into developing a culture of resilience. Here are some features of a resilient business:
- Capable of responding swiftly to both opportunities and negative situations.
- Capable of growing and increasing market share even in times of adversity.
- A greater awareness of itself, its stakeholders and the market place.
- Awareness of vulnerabilities and their potential impact (both negative and positive)
- An ability to be flexible in line with unforeseen situations, able to adapt to change and geared towards developing innovative solutions.
How Resilience Affects How a Business Develops
A resilient business is also a dynamic business, and being in tune with the threats you face can help to generate a positive culture within a workforce as we have already discussed. This positive attitude can reap rewards in itself. It can help to engage your workforce and instil a culture of innovation and personal development.
Having and Promoting Business Resilience
In a similar way to Community Resilience, developing business resilience within an organisation or promoting it externally will involve making people aware of the issues, engaging their help, and providing support so they can contribute to plans and implement responses. Once engaged with this process, individuals and groups are likely to:
- Be more motivated – to want to help themselves, their colleagues and their organisation Provide specialist knowledge of their area of work, including information about risks, and suggest solutions based on this.
- Be more able to contribute their experience, recall previous disruptions and how they were dealt with.
- Be able to provide constructive criticism of proposals from different perspectives.
- Provide access to networks of people who can assist in other ways.
- Be more ready to recognise and report emerging problems, providing early warnings.
- Have a fuller understanding of their role and be more able to respond flexibly when faced with unexpected disruptions
And, as we have already touched upon, consumers, suppliers and competitors may look more favourably on you because of the plans you have put in place.
Richard Coleman, Director of an SME states: “The risk landscape for SMEs is becoming increasingly unpredictable and complex with potential major threats such as economic volatility, new cyber risks and severe weather now on the rise. Maintaining operations and service through these challenges is absolutely vital to the survival and success of the small business. As such, there is a growing consensus that business continuity planning for extreme weather, fires and other business interruption events is increasingly critical to the long-term resilience and sustainability of SME’s – and is becoming a strong positive feature for identifying better performing SME businesses.”
Effective resilience helps a business to become more competent and capable in the future. Even if a little time and investment is needed to put the right plans and management structures in place, the benefits of being able to achieve new, potentially lucrative objectives and safeguard against any losses can only be good news for small enterprise owners.
How You Will Know that Resilience is Having a Positive Effect on Your Business
As with any business strategy, success should be measured using both hard and soft data. In terms of business resilience it is something that over time becomes the heartbeat of your company.
Outside of disaster recovery the culture of resilience should result in a more efficient and successful business as a whole. Everyday disruptions may become less frequent or have less impact because of steps taken within the company. Productivity may improve, profit margins grow, customer satisfaction increase, discounts received on insurance premiums and even a greater number of investors keen to take on a “safe bet” business opportunity.