While 2020 gave some confidence in their organizations' resilience, a majority still don't feel completely ready for the next crisis, a Deloitte study finds.
Disruption was an operative word to describe the events of 2020, but a new report finds more than six in 10 organizations expect to see either occasional or regular disruptions ahead —yet, most global CXOs do not feel confident leading through disruption, and even more, believe their organizations are ill-prepared to pivot and adapt. The report from Deloitte Global also finds three-quarters of respondents believe the climate crisis is of similar or greater magnitude compared to the COVID-19 pandemic.
The report highlights five core attributes of resilient organizations that it maintains will enable companies to face challenges head-on: Prepared, adaptable, collaborative, trustworthy, and responsible.
"Businesses have always faced disruption, but the challenges of the past 12 months have been uniquely unrelenting," said Punit Renjen, Deloitte Global CEO, in a statement. "The confluence of a global health pandemic, social and political unrest, and worsening climate events has presented organizations with tough choices, new ways of operating, and fundamental strategic shifts."
As they look to recover and rebuild, organizations that plan and invest in anticipation of future disruptions will be better positioned to thrive, Renjen said.
The characteristics of resilience
Resilient organizations did not necessarily predict the events of 2020, but they withstood the immense pressures by enabling and promoting nimble strategies, nurturing adaptive cultures, and implementing and effectively using advanced technologies, Deloitte said.
The survey suggests that organizations that build the five core attributes into their operations and cultures are better positioned to overcome disruptions and help usher in a "better normal."
Prepared. Successful CXOs plan for all outcomes. More than 85% of CXOs whose organizations successfully balanced addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020; fewer than half of organizations without that balance felt the same.
Adaptable. Leaders recognize the importance of having versatile employees, especially after a year like 2020. To that end, flexibility/adaptability was, by far, the workforce trait CXOs said was most critical to their organizations' futures.
Nearly three out of four respondents from organizations that had implemented actions to make their workforce more adaptable—such as by training or reskilling workers, implementing worker redeployment programs, or offering flexible working options—said their organizations are doing a good job at cultivating resilient cultures compared to just about half of organizations who didn't have such programs in place.
Collaborative. CXOs indicated the importance of collaboration within their organizations, noting that it sped decision-making, mitigated risk, and led to more innovation. Two-thirds of respondents who said their companies removed silos in their organizations before the pandemic reported managing the events of 2020 better than their peers
Technology was a critical enabler of collaboration throughout the pandemic. Just 22% of surveyed CXOs said their organizations had the technologies needed to facilitate remote working before the pandemic. Forty-two percent developed and adopted these technologies out of necessity during the year.
Trustworthy. CXOs understand the challenge of building trust with key stakeholders, yet many did not feel they had lived up to the task. More than a third of respondents were not confident their organizations had maintained trust between leaders and employees.
Organizations that prioritized the physical safety of their employees and customers, the mental health and morale of their employees, and the security of their data weathered 2020 better than those who did not.
Responsible. Most CXOs acknowledge that the business world has a responsibility beyond the bottom line. Eighty-seven percent of CXOs who said they have done very well at balancing all of their stakeholders' needs felt that their organizations could quickly adapt and pivot in response to disruptive events.
That is nearly 50 percentage points more than the proportion of CXOs who said the same at organizations that haven't done well at balancing their stakeholders' needs, according to the Deloitte report.
Climate crisis looms large
Leaders sometimes aren't aware of what they're capable of until they are put to the test. For example, before 2020, only 24% of respondent CXOs felt completely ready to lead through potential disruptions, and only 21% felt completely confident their organizations could quickly adapt and pivot, if needed, the report said.
In the midst of the pandemic, however, these numbers jumped to 34% and 30%, respectively, indicating that the events of 2020 have given some CXOs a confidence boost about their organizations'—and their own—resilience.
Yet, that still leaves 66% of CXOs who don't feel completely ready to lead and 70% who don't have complete confidence in their organizations' ability to pivot and adapt to disruptive events, the report noted.
That is concerning considering that global CXOs made it clear that disruption is not going away: Three quarters say they believe the climate crisis is of similar or greater magnitude compared to the COVID-19 pandemic, the Deloitte report stated.
CXOs ranked climate change as the top societal issue for businesses to tackle over the next decade (47%), followed by health care issues and disease prevention (42%), and gaps in education and training (39%).
"The scope of these threats accentuates the urgent need for leaders to embrace all stakeholders and put the advancement of society at the heart of business strategy," said Michele Parmelee, deputy CEO and chief people and purpose officer at Deloitte Global, in a statement. "While change and disruption will be a way of life going forward, leaders who implement the building blocks of resilience now will be best positioned to thrive going forward."
The Deloitte 2021 Resilience Report is based on a survey of 2,260 C-level executives and senior public sector leaders, including CEOs/presidents, COOs, CFOs, CMOs, CIOs, and CTOs. Respondents were from 21 countries, the firm said.
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