There is no business without risks. Businesses, if operated well, can attract good investments and huge profits, but negligence can be detrimental to their performance. A business needs to continue its regular operations to survive in the stiff competition of the market. But obstructions such as climate change, fires, pandemics, hacks, and network outages can hamper business operations. Operational resilience is the system of a business that enables it to continue operations despite any disruption and the factors of production.
Operational resilience is the ability of a firm to anticipate, detect and control the potential threats to a business. This system handles a business’s external pressures so it can run smoothly. To survive, a business must consider the risk factors associated with its objectives. An able and systematic resilience adjusts the business proceedings to abrupt changes quickly to keep up their performance.
The modern age has brought about numerous innovations to the platform but not without uncertainty. The world is unpredictable, and so is business. The Covid-19 pandemic is a clear example of this, making the presence of an efficient operational resilience system even more necessary. We have listed below several ways a business can strengthen its resilience system to ensure that it is well-prepared for future disruptions.
1. Construct the system on the Existing Processes- A firm doesn’t need to start from point zero if it wants to implement Operational Resilience System. This system can be easily added to the operations at any time as it only includes efficient risk management. Traditionally, the focus of risk management has been to react to the problems that have already occurred in the business. Operational resilience deals with the potential threats to the business and plans a way out in advance in case of any disruptions or emergencies. A Company, while incorporating Operational resilience in its system, should consider existing operations that can attract risks. This enables a firm to strengthen its resilience system and enhance business operations.
2. Be Informed about the Third Parties- Businesses need a regular supply of raw materials and labour to operate. Therefore, companies rely on third parties for financial services, distribution, and operations. For building up an efficient, resilient system, a business needs to learn the workings of the third parties so that it can be incorporated into the resilient planning.
3. Use the Experiences– Learning from past events is the best way to build a stronger resilience system. For instance, the covid-19 pandemic has taught us well about the measures a firm should take in case of a sudden lockdown. Learn from past mistakes and know well about the reasons for such events happening. This will help you formulate plans and measures to handle such situations skillfully. The Risk Management System will be effectively built if the mistakes are taken as a lesson and used in developing plans to adapt the firm to similar failures.
4. Develop a robust Communication Strategy- A well-developed communication system is the key feature of an efficient operational resilience program. Communicate the risks of the business with the distributors, employees, and board members. This approach enables them to be well-prepared for emergencies. The entire organization should be well informed to react appropriately in case of disruption. An organized communication setup will spread the information about the crisis quickly throughout so that the problem can be addressed at the earliest.
5. Make use of the Technology- The more technologically advanced you are, the more efficient the operational resilience system you can build. Without data, spreadsheets, and emails, one cannot build a resilient system. You need to deal with a complex data set to detect the risk factors that require an integrated technological system. An advanced technological setup keeps a check on the daily functioning of the business. Some risk management software automates the processes and lifts much of the burden of potential threats to the business.
Conclusion
Operational resilience has emerged to be of much importance in today’s times. It helps the business tackle the risk factors and grow in the market. It is sufficient for a business to carry on with its regular operations despite numerous threats and risk factors. Thus, operational resilience increases an organization’s ability to handle the internal and external risks that may hinder its functioning.
