Irish businesses need to embrace a strategic approach to resilience to thrive in an era of constant disruption, according to PwC.
Data from nearly 2,000 respondents worldwide including Ireland provides insights into how business leaders are preparing for, and responding to, this new world of constant disruption.
More than half (57%) of Irish respondents to PwC’s Irish and Global Crisis and Resilience Survey say resilience is ‘very important’ on their list of strategic priorities.
“Irish businesses need to embrace a strategic approach to resilience to thrive in an era of constant disruption or ‘permacrisis’”
At the same time, less than half (47%) have a business resilience programme in existence for five years or more (Global: 42%).
Age of disruption
Considering the war in Ukraine, inflationary pressures and geopolitical uncertainty, it is unsurprising that nine in ten (97%) Irish respondents reported to be concerned that their organisation will continue to face multiple disruptions for at least another two years.
“To build a trusted and agile organisation, it is vital that business leaders invest in resilience across functions and people”
76% of survey respondents said that the impact of the most serious disruption on operations was high/medium, disrupting critical business processes and services and causing financial and reputational issues.
Irish respondents are more concerned than global counterparts about most types of disruption in the future. According to the survey the most concerning disruptions anticipated in the next two years are: Cyber attacks (Ireland: 60%; Global: 30%), geopolitical disruption (Ireland:43%; Global: 21%), climate change/natural disaster (Ireland: 37%; Global: 21%), employee retention/recruitment disruption (Ireland: 37%; Global: 36%) and supply chain disruption (Ireland: 30%; Global: 23%).
Many of the key challenges faced by Irish organisations in establishing a resilience programme are more severe in Ireland compared to global counterparts. 40% cited maintaining and developing the resilience programme as a key challenge (Global: 35%), Another 40% cited team and expertise constraints (Global: 28%) and 33% cited executive sponsorship (Global: 26%).
“Business leaders face an unprecedented level of disruption and uncertainty in today’s rapidly changing environment,” said Andy Banks, Risk Assurance Partner, PwC Ireland.
“Organisations are contending with external macro forces and internal business transformations, and it is against this backdrop that resilience has become one of the most vital strategic priorities in the corporate world.”
“Overall, the trends on how global businesses are developing organisational resilience are similar in Ireland. The survey shows that Irish businesses need to embrace a strategic approach to resilience to thrive in an era of constant disruption or ‘permacrisis’. Irish businesses are more concerned than global peers about the scale of future disruptions and they are also more challenged when it comes to implementing resilience programmes. Investment is key but Irish organisations are planning less investment than global counterparts over the next two years in key areas such as workforce resilience and disaster recovery.”
Just around a third or less of survey respondents are highly confident in their ability to recover from multiple disruptions. Many lack the foundations needed for resilience success, for example, less than half (43%) of Irish respondents reported to be ‘fully involved’ in the overall business resilience governance of their organisaion (Global: 60%). Just a fifth (20%) admitted that their organisation’s approach to resilience is ‘fully integrated’ in their overall business strategy (Global: 21%).
One in five or less (in Ireland and globally) reported that they had the foundations needed for an industry leading resilience programme. This confidence gap puts organisations at risk to not being able to recover from an unexpected shock or not being able to adapt as quickly as competitors.
A minority of Irish survey respondents revealed that their organisation had a crisis/recovery plan that is reviewed and regularly tested. For example, just 33% had such a plan for business continuity, 27% for cyber recovery and 20% for disaster recovery. Just 27% confirmed that their business resilience ‘training and coaching’ programme is ‘industry leading’.
The survey data revealed three significant trends driving, what PwC has called, a resilience revolution:
- Integration: Businesses need an integrated approach to resilience, centrally governing and aligning multiple resilience capabilities around protecting what matters most, and embedding the programme into operations and the corporate culture.
- Leadership: A successful resilience strategy and programme needs (1) executive sponsorship from the C-suite, (2) a programme leader with clear responsibility, and (3) a skilled team to do the day-to-day work.
- Programme approach: Integrating resilience programmes into wider business strategies and processes is critical. Many focusing on protecting what matters most and prioritising investment based on what’s critical to their organisation and stakeholders.
Andy Banks concluded: “It is hoped that the investment that is planned over the next two years will happen. The ability to adapt and respond to disruption is vital to maintaining trust built with stakeholders and protecting shareholder value and reputation – all at a time when the expectations for resilience of businesses and government have never been higher.
“To build a trusted and agile organisation, it is vital that business leaders invest in resilience across functions and people, and focus on an integrated approach, supported by technology to enable a panoramic view of their risk and resilience landscape.”