We are living in an era of compound disasters, natural and unnatural.
That means that there’s never been a more important time for businesses to better understand and set themselves up to be able to keep trading when disaster strikes.
Resilience as part of your annual review
The start of a new financial year is the perfect opportunity for businesses to review, reflect and revisit their operations in the previous financial year.
What worked well?
What worked less well?
Where are we headed – and what should we do differently in the future?
When it comes to resilience, we recommend that business owners look back on how many disasters have impacted their business, either directly or indirectly, in the past year. Indirectly affected for instance could be if your business did not suffer fire damage in a bushfire but the smoke meant that tourists couldn’t visit or your regular customers were unable to transact as they used to.
Then you take a look forward and create cash flow projections based on the assumption that there will be a disaster at some point. Make plans for the products or services you need to offer (or stop offering) and what your strategic focus will be for the next twelve months to help weather the storms.
Why businesses should care about resilience
We believe that all businesses need to add resilience as a vital capability. That means business owners need to learn and understand more about resilience – and that it’s not just about recovering from a bushfire or a flood.
It also means that business owners should prioritise putting some time and effort towards implementing strategies so that they can change behaviours, processes and structures to enable their business to survive and thrive in the face of disaster.
In fact, recent research shows that communities that act now to protect themselves from future hazards like earthquakes, hurricanes, floods and bushfires can save themselves as much as $11 for every $1 that they initially invest.
Resilience needs to be an important facet of how business owners operate and conduct their operations. It saves money in the long run, and saves livelihoods.
3 tips for building resilience in your business operations
Tip 1: Sustain three different revenue streams
A core tenet of business success is to have a consistent source of revenue. In our experience, relying on just one or two funding streams won’t build resilience in your business. If a disaster happens and one or two of your sources of revenue are cut off, then at least you’ve still got a third revenue source.
Remember – at the end of the day, you’re not a business if you’re not in business. <
Tip 2: People are the foundation of resilience
We know that connections between people and social capital are the foundation of resilience. In fact, we argue that people and community can be more important than even batteries or water when it comes to building resilience and disaster recovery.
This means that business owners need to dedicate time and effort to building and nurturing connections with employees, customers, suppliers, emergency services and local governments, even before a disaster strikes. That social capital is absolutely vital for ensuring that business and the community are able to bounce back.
Tip 3: Analyse your supply chain
Are you relying on a single supplier to operate your business? If that single supply chain is impacted, that could negatively impact your business too.
In addition, if your supply chain includes a national or international supplier, you may need to consider whether there is a local alternative in the event borders are shut and you cannot get the inputs you need to run your business. If there is a local alternative, now might be the time to consider setting up relationships with them so that you can move quickly if necessary or even move to a local suppliers before the next inevitable disaster happens.
Start building your business resilience with Resilient Ready Reset
We can work with you to build a resilience-led mindset and culture within your entire organisation and to deliver better business results.
Book a Resilient Ready Reset to position your organisation to thrive. The program is relevant to businesses with 20-200 employees.
If you have more than 200 employees please contact [email protected] and we will send further details.