Last 1.5 years have not been easy for any industry. Business plans have gone vary, risk mitigation formulas have not proven effective, investment strategies have had to be revamped; not a single industry has been able to resist the wrath of pandemic. To top it, almost every part of India has experienced a natural calamity or an additional epidemic in the past 1.5 years, intensifying the uncertainty. If global trends are any indication, catastrophic events will grow more frequent but less predictable in future.
Leaving the Covid-19 pandemic aside for a moment. In general, you might have noticed, risk faced by industries has increased manifold in the past decade. The exact nature and severity of the risk might differ from country to country but the bottom line remains the same – difficult times are here to stay. Globally, number (at times even severity) of natural disasters has increased, internet & data breaches are on the rise, not to mention flipside of technological innovation: a variety of new legal & financial risk. The old risk mitigation formulas did not consider the technological advancement in terms of availability of data, pace at which data can be transmitted, or climate change & it’s direct or indirect impact on companies’ risk-return profile, or the changing regulatory aspect. For that very reason, our industries have been caught unprepared to face the events of last few months.
Each industry needs to develop the ability to withstand adversity and bounce back stronger. In other words, each industry needs to develop resilience: first to survive, and then to thrive. I am of strong opinion that a sound business model should be embedded with the following facets of resilience:
Invest in strong and secure technological infrastructure. This doesn’t necessarily mean invest in an expensive technological infrastructure. Understand the requirement of your entity and then choose an appropriate structure in order to keep your data safe, your teams connected, and your communication with third parties uninterrupted.
Plan the cashflow to keep sufficient liquidity should the entity have to go through some difficult times. Keep investments plans at bay for now.
Build a strong supply chain and delivery mechanism to maintain operational capacity. Maintain and update a list of alternate suppliers. Spread the risk of delivery failure by maintaining more than one service provider for deliveries.
Build a strong team – the one which can adapt to your vision and mission, where everyone feels included and is empathetic towards the goals & work of the other team members.
An effective resilience policy evolves with time – it anticipates the requirements, the future scenarios and responds to drive superior performance. It has been long proven that entities which respond early to disruptions or downturns, survive and thrive for a longer time.