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Episode 21: What does the resilience revolution mean for your business?
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PwC's Global Crisis and Resilience Survey 2023 explores insights from 2,000 business leaders worldwide. In our latest podcast episode, PwC's Bobbie Ramsden-Knowles and Dave Stainback take a deep dive into the data, how the resilience landscape has changed since our first survey four years ago, and what you can do to transform your organisation so that it thrives – not just survives – during disruption.
Release date: April 2023
Full transcript
Dave Stainback: Hello, everyone, and thanks so much for joining us today for this edition of Emerge Stronger through Disruption. I'm Dave Stainback, Co-Leader of PwC’s Global Centre for Crisis and Resilience and coming to you from our office in PwC Atlanta.
Bobbie Ramsden-Knowles: Hi, Dave. And welcome, everyone. My name's Bobbie Ramsden-Knowles, I'm Co-Leader of PwC's Global Centre for Crisis and Resilience. And I'm coming to you today from our office in London.
Dave: I'm very excited today, Bobbie, as we get to talk about this newly launched PwC Global Crisis and Resilience Survey 2023, our third collection and analysis of data from business leaders worldwide in this space. This year's survey report has been out in the world for a couple of weeks now, and we hope our listeners have had the opportunity to take a look at it.
I've been very lucky to be able to help drive all three iterations of this survey over time, and I absolutely love the evolution that it's taken since 2019. Bobbie, I know this is your first time helping to drive the survey from start to finish. Did you enjoy it?
Bobbie: Yeah, absolutely, Dave. It's been a brilliant experience, I think for a couple of reasons actually. Firstly just getting to work with all of our colleagues across the network. I think at PwC we're really lucky to have a global center focused on this really important subject.
And hearing all the different views in pulling the survey together was just brilliant. And then secondly, just hearing the insights from our clients, you'll see in the report and our readers will see and our listeners.
There are so many common themes coming through, common challenges, but also common views on how we can address these challenges. So it's been a real pleasure to be a part of it this time around.
Dave: I could not agree with you more, Bobbie. So in this episode today, we're going to explore some of the data and insights revealed by about 2,000 business leaders worldwide.
Some of the steps those organisations should take, and based on the data and what we've learned working with our clients through this unprecedented era in the corporate world. We're also going to get into the title of the report, “The Resilience Revolution.”
But first, a couple of quick hit thoughts on some of the nuts and bolts of the survey. So we conducted research from September to November of 2022. The survey really targeted global business leaders. We had almost 2,000 responses worldwide across 42 different territories and in 16 different languages. And 41% of our respondents are from the C-suite.
Bobbie: And Dave, that C-suite participation is absolutely key because I think we've seen a real significant uptick this year in responses from the C-suite, which to me really demonstrates resilience is absolutely a C-suite focus right now and will explore that a bit later when we talk about how to build resilience.
But let's move onto, the title of the report. What do we mean by a resilience revolution? It's quite a bold statement.
Dave: Yeah. So first of all, resilience. So we define resilience as the ability of your business to evolve continuously, protect from shocks, while at the same time being able to adapt, create value, and maintain a competitive advantage. So that ability to create value and transform your organisation so that it thrives, not just survives during a disruption, is really what the theme of this whole podcast series is about.
And we'll talk more about how to do that a little bit later. But when we talk with our clients and we see the data and the survey responses from around the world, it's really clear that what we're experiencing is nothing less than really a tectonic shift in the way businesses need to prepare and respond to disruption. So that's the revolution. In today's world, disruption, it's become a given. It's constant. There's a reason that permacrisis was one of the largest dictionaries in the world reigning word of the year. So if we set the pandemic completely aside, you know, businesses are facing external disruptions from geopolitical instability, cybercrime and ransomware, climate change, supply chain challenges.
And frankly, internal disruptions from loads of technology debt, losing waves of employees with institutional knowledge, changing business models... So you can't really tackle resilience as a mid-level compliance programme anymore. It needs to be led from the top.
Bobbie: Absolutely. I think the other question we've also had from people since we published the report is: What are the butterflies all about? Well, the butterfly, as we know, is actually one of the most well-known symbols of transformation.
And I think just building on what you said there, Dave: when you read the survey and you really understand what this is all about, is actually changing your mindset and approach to how you build a resilient organisation.
And if we accept that disruption is here to stay, what we need to think about is: How do you transform your business to be resilient? How do you actually transform it to be able to adapt and be agile to the threats that are going to emerge? And look, that doesn't mean just changing the title of certain teams to reflect that someone is now responsible for resilience. Actual change is needed in the business.
Dave: Absolutely. I'm reminded of the case studies that we actually included in the survey report. We looked at the resilience profiles of two comparable global manufacturers and how they dealt with and frankly emerged from massive shocks that each one of them faced.
So on one side there was an organisation with a fully integrated and dedicated resilience programme that was really led from the top, and they were able to quickly adapt to a nearly catastrophic supply chain blockage.
Whereas, on the flip side, the other organisation did not really understand its critical business services. It did not have a central resilience programmeme and it was disabled by a ransomware attack for over a month and lost close to a billion dollars. And yeah, that's “billion” with a “B”. So these stories really bring to life the results that we're seeing in the survey.
Clearly, disruptions are on the rise, and if you're not prepared with a resilience programme, you're already falling behind your competitors.
Bobbie: Yeah, and I think that competitive advantage can be derived from investing in building resilience. That's a really important topic right now. Resilience creates value and that again, is a change in mindset: that it’s not just about creating protection, it's creating value.
And that's an important shift I think organisations need to get their head around right now. The other thing that really stood out to me as compelling is the idea of this confidence gap. And a common theme I often hear in client conversations is that organisations actually felt more confident about their ability to respond to crises post-COVID [the COVID-19 pandemic], and that I completely understand that comment because many organisations did adapt really well during the pandemic.
The only thing I would say is that COVID was different for a number of reasons, but importantly, it did impact everyone. And you didn't have the same type of external scrutiny you might have if you're one organisation that, say, hit by a cyberattack.
And what was interesting is that those organisations who felt confident also demonstrated that they had not invested in an integrated resilience programme, and that to me, that integration, how you bring all your different capabilities to build resilience is really, really important.
And this isn't just about trying to align your capabilities. It's more importantly about gaining consensus at the executive level. The resilience is a strategic priority and requires the necessary investment and that you recognize and agree to drive a top down approach to how you invest in it.
Dave: Absolutely. I think that confidence gap is an interesting finding, and it's one, certainly, I know you and I have both seen anecdotally as we have discussions with clients and how they feel about their response to COVID versus maybe how prepared they actually are from a resilience standpoint.
Picking up on your point around it being a strategic priority, I think that's one of the really interesting things from this year: The motivator for business leaders to take action on resilience really shifted. We found that leaders who view investing in resilience as a strategic imperative, not those motivated by fear or the need to complete just a compliance exercise.
Those are the ones that were invariably emerging stronger from crises with better results. And interestingly, nearly half of our respondents said that strategy was their main motivator for investing in resilience, which is a big shift.
But still, almost 40% said that fear was the motivator, and about 14% said it was regulation or compliance reasons. So it's really interesting how the shift has moved towards this… really leaders understanding resilience to be a strategic imperative.
Bobbie: Absolutely. And I think it's because people are recognising it actually gives an organisation the opportunity to thrive out of disruption where less-prepared competitors may not.
If you get it right, you create value, but also you build trust. And in doing so, protect your reputation as an organisation, as well. So just sort of thinking, then, about how does an organisation become more resilient? Where do they even start, Dave?
Dave: Well, I think depending on their particular role, there's really differing approaches that address the challenges that we've heard about, based on our survey responses. But let's start with that overall picture. Through the results of the survey, what are really the top three things, Bobbie, that we think business leaders need to do?
Bobbie: Yeah, I think there were three really strong, clear points that came through. And one thing I would say before I go through them is that I think it's important to frame them - because as you know from speaking to those working in the resilience field day-to-day, many of them may say, “Well, these points aren't necessarily new.”
And I would agree. But I think what's really important is actually that organisations across markets, across industries and at that executive level now, all recognise that these three key considerations are absolutely critical to implementing a successful programme - which ultimately, if you get it right, contributes to an organisation's overall resilience.
The first one is about establishing that executive sponsorship. And I know you and I, Dave, are having this conversation right now with many clients around who should this be? You know, I think the conversation comes back to - at the moment we're hearing: Should that be a Chief Resilience Officer? Now, our view that we talked about previously is actually, for some industries, that might be the right answer.
But I don't think it applies everywhere. And I think what's really important is that you do identify a visible senior leader who can have the accountability and responsibility to drive the programme.
Then secondly, we talk about identifying and mapping critical business services, and this really comes back to that idea of adopting an operational resilience approach. And as we both know, this is all about focusing on establishing and maintaining the core elements of the non-financial resilience in the organisation.
And it comes down to… it has to be informed by a strategic top-down view of what is most important to an organisation and its stakeholders. What is most important should be determined by your business service outcomes.
So what do you deliver as an organisation - not just the systems that deliver them. Often, as we talked before, Dave, we go into an organisation - and often organisations are looking at the criticality from just a systems view, not a service-led view.
Once organisations have identified those business services end-to-end, they really need to understand the impact and the priority assistance, so dependencies across assistance, both from application, third party, people, physical property, and of course data, and in terms of how you deliver those services. And then of course you need to establish a mature exercise, but also testing capability.
And this is really critical based on severe but plausible scenarios. And the shift here in the message we certainly deliver to clients is that it's not just those scenarios which are most likely to occur, it’s really which of those are very highly impactful.
And also your risk appetite should also then help determine the degree of resilience required - and this to me is where the link between enterprise risk management and resilience is so critical. This came through the survey as well.
But leaders should also consider setting impact tolerances for those critical services - based on importantly, again, this is the shift - to external impacts to customers and the wider system or market in which the organisation operates.
So this is taking an external view and looking at what is the impact to those services, and how can we ensure we mitigate any disruption of these services and causing any impact to our external stakeholders.
So that operational resilience approach comes through really, really clearly in the survey results. And then the third is building an integrated enterprise resilience programme. Now that sounds really simple, but I think as we both discussed recently, a lot of the feedback we're hearing right now when you speak to one part of the business is, you know, “Resilience. We get it.
But this isn't necessarily my area” or “I don't have the authority.” So actually integrating disciplines isn't as easy as it sounds.
Dave: I think that's a great summary and really those were the key takeaways from the survey overall, Bobbie. You know, it feels simplistic to say, “Hey, what are the three easy steps to resilience?” And you and I know that, you know, in everything that you just walked through, there's a ton of work that has to happen to really accomplish those three core items.
But our data is showing that a lot of organisations are headed that way. And I think what you and I are recognising is that for those that haven't started to move that way, they're probably starting to fall behind their peers.
And frankly, I think there's one really insightful takeaway from all of the data that we crunched through for me, and it's a chart in the report that really compares respondents with integrated programmes, like you talked about, to those that are only partially or not at all integrated yet.
And what we saw was with the integrated programmes, they are so much farther ahead on the core elements of operational resilience that you talked about, like critical business service mapping, dependency mapping, testing, and exercising.
And really this comparison, direct comparison, provides such a clear snapshot of the value of integration and really what those who are integrated are focused on, which is driving towards that operational resilience approach.
Bobbie: Absolutely, Dave. I think that point on integration, as we see, is one of the most challenging areas many organisations are grappling with right now. But as you say, that chart is really interesting because it shows that those who are further ahead with operational resilience are successfully integrating the capabilities around resilience and being able to drive that value that we talked about earlier.
So I'd really encourage our listeners today to take a look at that specific part. Of course, the whole report, but that specific graph that Dave is talking about really shows and highlights a lot of the messages that we're talking to today. And so that seems like a great place to wrap up Dave.
Thanks so much for that. It was, as I said at the beginning, it's been a brilliant experience working with you and the wider team on this really, really important survey. And thanks for a great discussion today.
Dave: Yes, thank you. Same to you. It's been excellent and we hope many are able to read the report and please provide us feedback on it.
Bobbie: Brilliant. We hope our listeners will get a chance to take a look at the report at PwC.com. And as Dave says, let us know what you think. We're really interested to know and hear your feedback. And don't forget to connect with both Dave and me on LinkedIn and of course subscribe to Emerge Stronger through Disruption wherever you get your podcasts.
Dave: Until next time. Thanks for listening.
Copyright 2023 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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