What does a resilient company look like in 2022?
Typically defined as the ability to withstand and bounce back from downturns, disruptions, and shocks, “resilience” has become a prominent buzzword in the corporate world.
However, organisational resilience can assume many guises and encompass a variety of issues.
Business leaders have accepted that the desire for hybrid working is here to stay and won’t be taking a sabbatical anytime soon.
The FTI Consulting Resilience Barometer is one the largest studies of its kind. It is composed of online interviews with business leaders from around the world who work within large businesses, defined as having an annual turnover in excess of $50m. The survey includes detailed questions on a myriad of topics, which broadly correspond to the 7 resilience levers identified by FTI.
The research at a glance:
|Who||Business leaders, defined as senior management, board member or C-Suite|
|How many||4068 interviews across 25 countries, and 3314 interviews amongst the G20|
|From what businesses||Large companies, defined as having a turnover in excess of $50m and / or a headcount of >250 employees|
|Where from||A variety of industries in the primary, secondary and tertiary sectors|
Historically, Savanta’s Agencies Team have facilitated project sampling and managed the fieldwork lifecycle, before delivering FTI with the raw data for analysis. However, for the most recent iteration of the Barometer (Q3 2021), FTI asked us to support in the tabulation and analysis stage as well.
Working to a quick turnaround, we produced a detailed executive summary, which extracted the key data-points from the survey results and identified trends from the previous waves of the Barometer.
Highlighted in this article are some particularly interesting findings from the data that relate to environmental and social issues in ESG (Environmental, Social and Governance), and the Future of Work. FTI’s focus was on G20 business leaders, so the data quoted below reflects the feedback from this subgroup rather than the total sample.
The UN Intergovernmental Panel on Climate Change (IPCC) recently published its 2022 Climate Change report, which claims that global emissions need to peak by 2025 and then decline rapidly if our world is to have a 50% chance of limiting global warming to 1.5 °C – the levels agreed on by world leaders during the Paris Conference in 2015 to avoid climate catastrophe.
Indeed, the IPCC report is a decisive reminder of the need for concerted climate and environmental action. But this raises the questions, are business leaders feeling the heat? And, more importantly, are they taking steps to make their businesses more sustainable and symbiotic with the climate?
According to the Barometer, 36% of business leaders said that they are under extreme pressure to improve their ESG policies in the next 12 months. This trends upwards amongst the largest businesses (defined as having a turnover in excess of $1b), with just under half of this group saying the same.
86% of respondents also said that they have been spending more resources on ESG in the past 12 months, and 88% said that they have shifted their ESG approach towards new opportunities.
However, 28% also said that they are falling short in terms of a climate action plan and 1 in 4 said that they are struggling to reach an integrated sustainability strategy, with the latter measure slightly under-indexing amongst businesses with a turnover of less than $100m.
What about the S in ESG?
As well as transitioning to more sustainable business models, stakeholders and citizens alike are demanding that large companies take their roles as vehicles for social progress more seriously.
Judging by the results from the Barometer, this would appear to be resonating with business leaders; 84% of respondents said that business leaders should publicly engage with social discourse, and close to 9 in 10 said that they are actively aligning business strategy and social purpose.
But what does this actually translate to in terms of stated actions?
Interestingly, 26% of business leaders said that they plan on completely divesting from areas subject to consumer activist focus, and 34% said that they will liaise with consumer activist groups to effect change within their company.
One thing we cannot extrapolate from the Barometer is the likelihood of business leaders executing these plans – particularly the more radical actions around divestment of assets subject to consumer ire. Nevertheless, the data indicates that stakeholder and consumer clamour for more engagement on social issues and more transparency regarding the social cost of business activities, is at least being heard by business leaders. Thus, good social governance is now being recognised as a fundamental lever for resilience.
The Future of Work
Another important dimension of the modern and resilient business is its ability to adapt to the demands from employees for hybrid ways of working.
In the October Barometer, 45% of business leaders said that they expected employees to work remotely 50% of the time or more. Although the curve has flattened from the previous Barometer (44%), this still represents an 18% point increase from the 2020 survey. This suggests that business leaders have accepted that the desire for hybrid working is here to stay and won’t be taking a sabbatical anytime soon.
While human resources professionals are generally in agreement that flexible working is a good thing, the transition from orthodox to new ways of working also brings forth a host of complications. For instance, 66% of business leaders claim that their business is struggling to digitise, while 4 in 5 claim to have experienced negative issues related to remote working and digitisation, whether that be in the form of data breaches (such as loss of PII) or a failure to manage employee wellbeing.
Therefore, close to half of G20 business leaders said that their business will assess their cybersecurity program in the next 12 months, while 38% said that they have increased their commitment to management quality in the last year and 37% said that they have increased their commitment to human capital.
As mentioned at the beginning of the article, organisational resilience can assume various guises. While it’s quite clear to see why improving ESG matters from a resilience perspective (for example, to stave off consumer boycotts or avoid over-reliance on diminishing and price-sensitive resources like crude oil), resilience also has an explicit relationship to issues like the future of work. Building flexibility into business models and developing the digital ecosystems necessary to support hybrid ways of working will be of paramount importance if businesses want to acquire the best talent, and therefore remain competitive and resilient in the future.
If you would like to learn more about the FTI Consulting Resilience Barometer Q3 2021, please click here.