Why Companies Should Have a Crisis Response Network
It is your duty as a member of the leadership team to create and review the overarching vision of your organization while guiding the company towards a sustainable future. Hence, scaling your organization towards zero disruption and creating a crisis response network is imperative for sustainability. Assessing your organization’s readiness and capability to handle turbulent times is an excellent place to start. A resilient organization can handle unexpected impacts and continue to grow and serve consumers despite disruption. This article at McKinsey by Alfonso Natale, Thomas Poppensieker, and Michael Thun discusses organizations moving from risk management to strategic resilience.
The COVID-induced situation has thrown the world’s health system into disarray, with disastrous human repercussions. Additionally, the crisis has shown how vulnerable economies are to increased demand shocks and industries to supply chain disruptions. Leading CEOs have expressed their commitment to moving away from defensive risk management and toward a forward-looking approach focused on strategic resilience.
Findings Signifying a Crisis Response Network
McKinsey supported research by the Federation of European Risk Management Associations (FERMA). They surveyed over 200 senior executives with risk and insurance specialists representing various industries and countries. The survey questions focused on resilience, strategy, operations, risk management, and strengths and weaknesses in managing strategic stability. Previously, risk management scope and focus were limited. Now, 60% of the organizations are confident that their security measures can combat any cyber-attack. In comparison, 75% of companies responded having a robust security posture in remote work environments. Another 52% of organizations claimed their security measures to be ironclad to manage financial resilience.
Many businesses believe the supply chain is the weakest link of all risks in the crisis response network.Almost two-thirds of respondents say resilience is an important goal or an integral part of their company’s strategic planning process.A core area for improvement was foresight capability (scenarios and stress testing).The pandemic illustrates that infrastructure needs to be secure and flexible. Meanwhile, digitization should be integrated with other resilience strategies, including work-from-home.Risk departments and executive teams play a crucial role in constructing a resilient company.
The authors also speak about switching from crisis response to resilience strategies, capabilities, competitive advantage, and crafting and implementing strategic resilience.
To read the original article, click on https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/from-risk-management-to-strategic-resilience
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