The 2024 Atlantic hurricane season commenced last month and already records are being broken. It was predicted that this year would have an increased number of storms with several becoming severe hurricanes. No one would have imagined a Category 4 hurricane in the first month of the season – not seen this early in over 50 years. The warmth of the sea water is said to be what normally occurs in September, not the month of June.
This unprecedented occurrence has brought into sharp focus the issue of climate change and the need for business resilience. Several global advocates have been for some time promulgating the climate crisis affecting nations and more so its impact on small island developing states. It will be some time before the current form of industrialisation is abandoned for more environmentally friendly and sustainable modes of development. In the meantime, countries must ensure they put in place a myriad of policy instruments and programmes to protect their spaces from the increase of intense natural disasters.
Businesses too are equally required to adopt sustainable practices. While simple risk management steps like business insurance, continuity plans and the procurement of equipment to sustain operations are lauded, more sophisticated measures may be required to confront the disruptions, natural or otherwise, that threaten the business.
A Forbes article, How to build business resilience, defines resilience as an organisation’s ability to navigate disruptions and adapt to challenges. It emphasises that resilience is not just about survival, but also about enabling long-term, inclusive, and sustainable growth. Building resilience goes beyond just protecting a business’ own interests. Sustainable and ethical practices contribute to the well-being of society and the environment, creating a more resilient future for all.
The article outlines three key strategies businesses can implement to build resilience:
Geographic Expansion: Diversifying business operations across different regions mitigates risk and ensures stability during economic downturns.
Fair, Inclusive, and Ethical Frameworks: Implementing ethical frameworks that promote fairness and inclusion fosters trust with stakeholders and future-proofs businesses for a changing consumer landscape.
Circular Business Model and Sustainability Framework: By adopting sustainable practices and circular business models, companies attract environmentally conscious customers, reduce operational costs, and contribute to a more resilient global economy.
These ideas are not esoteric but can contribute to building models in business capable of withstanding climatic events, cyberthreats, pandemics and the myriads of existential threats that confront our region.
There is an inevitability of disasters, particularly at this time, as such a focus on long-term resilience is key. The World Economic Forum (WEF) posits the importance of building resilience at all levels (organisational, national, and international). It highlights the need for public-private partnerships to address these complex challenges.
In its article How to build business resilience in an era of global risks, the WEF contends that businesses need to be prepared to react effectively to crises, minimising damage and emerging stronger. The focus on building long term resilience necessitates more than just reacting to immediate crises; but about proactively strengthening the organisation to withstand disruptions.
Four pillars of organisational resilience were proffered as follows:
Technology and Operational Resilience: Maintaining core business functions and ensuring the availability of critical technology.
Workforce Resilience: Having a productive workforce capable of adapting and executing during disruptions.
Data Resilience: Protecting the integrity and confidentiality of data, ensuring compliance during crises.
Financial Resilience: Maintaining liquidity and assets to weather financial strain caused by disruptions.
There is an intrinsic need to integrate core resilience competencies like business continuity, disaster recovery, and incident management to create a cohesive response when a crisis hits.
The world’s economies have arguably seen its share of disruptions in these three decades of the 21st century compared to the prior 10 decades combined:
Climate change and extreme weather events have disrupted supply chains and threaten business operations. Firms have resorted to alternative suppliers, trade routes, and scenario planning for climate-related disruptions where practical.
Geopolitical tensions have also disrupted supply chains.
Technology advancements such as AI present both opportunities and risks. Businesses need to be aware of potential risks like misinformation, cyberattacks, and job displacement. Building resilience involves using AI responsibly, managing its risks, and adapting to the changing job market.
There appears to be a never-ending cycle of exogenous shocks and climatic events, for which businesses must confront and address. The key is to embrace the long game approach. Possible strategies include:
Assess vulnerabilities: Identify potential disruptions related to climate change, geopolitics, and technological advancements.
Strengthen supply chains: Diversify suppliers and consider alternative trade routes to mitigate disruptions.
Embrace responsible technology: Use AI responsibly, manage its risks, and plan for the changing job market.
Invest in cybersecurity: Protect the business from cyberattacks that could be exacerbated by AI advancements.
Scenario planning: Stress test the business strategies against different risk scenarios.
Communication and collaboration: Build trust with the workforce and stakeholders, and collaborate with the public sector to address these challenges.
By following these tips, businesses can become more resilient and better prepared to navigate the complex and ever-changing risk landscape. Building resilience involves preparing for potential disruptions and having alternative plans in place.
Building resilience is an ongoing process. By continuously evaluating your vulnerabilities, implementing strategies, and fostering a culture of preparedness, the business will be better equipped to navigate challenges and emerge stronger.
The Small Business Association of Barbados (www.sba.bb) is the non-profit representative body for micro, small and medium enterprises (MSMEs).
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