Resilience, critical for both individuals and businesses seeking to survive and thrive
Volatility and uncertainty are now consistent themes across our politics, financial markets, and environment. The frequency of crises events has accelerated; in the last 15 years we’ve seen a global financial crash, climate crises events erupting across the developed and developing world, a global pandemic and now an energy crisis impacting the security of individuals, businesses and countries. This is accompanied by a significant shift in global politics and a continuing technological revolution that is disrupting all aspects of life and business.
In parallel, our natural desire as a race to continue to innovate and disrupt accepted norms and not standstill creates a natural volatility – what was is not necessarily what will be. The big difference now is that this shift from relevant to redundant occurs at such a pace that many are left in the wake.
The impact on organizations
The competitive landscape is so challenging for all sizes of organizations. Large organizations are now continuously needing to avoid standing still in fear that a challenger will come along and, in a blink, disrupt their previously impenetrable market domination. This requires them to both look over their shoulders at what’s coming but also look forward to how they are developing the next iteration of their business. This, together with the market environment described above means that there is no certainty and, therefore, no foundation or value in building static long-term strategies.
The outcome of this is that enterprises are now needing to execute quicker and in smaller packages in order to ensure that they don’t deliver and find that the business case has already been timed out
It also means that the capabilities and skills needed by an organization are no longer fixed or as easy to predict or plan for. In response to this, companies are now adopting agile talent models at pace, allowing them to leverage ‘talent on demand’.
The impact on skilled talent
This shift is thankfully also mirrored in a changing mindset within individuals in regard to their relationship with their employer, their career and their skills. Previously people’s identities were deeply connected to their employer, now identities are increasingly connected to our skill. When people describe what they do, there is a change in language from ‘I work for…’ to ‘I’m a…’. A lot of this has been driven by a realization in the workforce that a permanent role doesn’t necessarily bring security. In addition, to build career resilience, accumulating a rich portfolio of experiences, skills and knowledge is so much more valuable than longevity in one role. It’s a natural instinct to seek control when the environment we’re in is uncertain and so it is no surprise that the pandemic led to many people making changes that allowed them to establish more control over their lives – the way they spend their time, the work they do and where they live.
In order to effectively navigate the complexities and uncertainties that exist, our ability to absorb, adapt and respond to unexpected change that is outside of our control and continue to progress will be critical. We must all be ‘ready to pivot’
Sustainability, in my view, is at the centre of the answer to how we can create resilience.
For businesses, resilience will again be determined by financial strength; however, there are other important factors.
- What is the resilience of the sector within which the business operates? During the pandemic, we have seen certain industries thrive – e.g. big tech and platform businesses and others suffer, e.g retail and travel.
- How agile is the business and those that work within it? It can be argued that although large businesses have capital strength to tide them over crises, smaller businesses have agility on their sides with the ability to adapt and pivot, make quicker decisions and reduce fixed costs at pace.
- Culture, the ability of a business to identify changing dynamics, make quick decisions, mobilise their teams behind a shared purpose and maintain morale through adversity requires a strong Culture.
- The resilience of the customer base is also important; there is no value in having a resilient business if it is serving and, therefore, reliant on a segment that lacks resilience.
- Innovation capabilities, accepting that the business model, products and services a business offers will need to evolve and sometimes be completely replaced or reimagined, people, processes and technology that enable the need for change to be identified quickly is essential. Post this, the presence of skills such as creativity, problem-solving, operating within ambiguity and storytelling are then the drivers of creating the next iteration of a business.
- Capital strength, andaccess to capital, as we can all see from the run of big tech redundancies, is essential, especially for businesses focused on growth as opposed to profitability metrics or those with inconsistent cash flows. There must be a clear path to positive unit economics in order to ensure your business continues to exist and thrive in the long term.
Sustainability for individuals
- Sustainable finances: Many of us live beyond our means; increased access to borrowing has enabled progress, but it has also created an ability to become over-leveraged. Do we truly understand the value of our liquid and illiquid wealth well enough to be able to assess whether we are truly financially secure or not? Sufficient income in retirement is a global issue yet to be effectively tackled, and the increasing levels of debt being accumulated by younger segments of society (driven a lot by education, housing costs as well as easy access to credit) together with lifestyle pressures and a challenging job market makes it hard to think beyond the next paycheck. To create resilience protection, investments (traditional and non-traditional) and educated use and management of debt will be critical.
Entrepreneurship and the ability to create a variety of income sources will become increasingly important in helping individuals achieve financial independence and create value for themselves and the societies they operate in
As average life expectancy continues to increase the skill is in managing the conflict between living for today and securing our futures
- Sustainable skills: The myth of a secure job has been burst. As crises have come and gone, it has become clear that no-one is completely safe from losing their job. Technology will also disrupt a large number of job segments which will simply cease to exist. To create resilience, we will need to concentrate on the continuous acquisition of skills aligned to changing demand, increase our ability to learn new skills quickly and transform our education system to ensure we are adapting what we teach our children to the world they will enter, not the one that exists today. It will also be important that we teach our children the art of resilience, the mindset and skills required to navigate difficult moments: defeat, failure, unplanned events, bad luck, ambiguity and the stamina and grit needed to see out crises. Some of these learnings will come from the ‘school of hard knocks’; however, we may also need to adapt formal education in order to arm our youth with the right tools to succeed.
- Sustainable lifestyle: Our environment, health and well-being can no longer be taken for granted. A survey I was involved in recently demonstrated that the majority of people, across gender, geography and wealth segments, are concerned about the environment; however, the majority also felt powerless and allocated responsibility and influence to other stakeholders – e.g. governments, NGOs and corporations. What we consume, how much we sleep, the hours we work, the amount we use technology, and the resulting reduction in human connection and physical activity that has, and our direct impact on the environment we live in are all elements of our lives that require our attention. In order to be resilient, we will need to actively manage and invest in our mental, physical, digital, financial and social well-being. There will also be a need for each one of us to take personal responsibility for the environmental impact we can have – positive and negative – through our daily decisions.
Agility, Agility, Agility. Our ability to flex, adapt and pivot as individuals and businesses quickly becomes critical when the world around us is so unpredictable
We need to be nimble and set ourselves up in a way that allows for high degrees of change and disruption. For businesses, this can equate to shifting to more variable cost models, leveraging agile talent solutions and partnerships and creating a culture where people are comfortable with uncertainty. For individuals this can mean thinking differently about ownership (the more we own, the less fleet of foot we become), education and skills (are we acquiring the right knowledge and skills), how we generate income and location (Covid apart, re-thinking the concept of where home is and could be especially with the breakdown of needing to live where you work).