Time to rethink resilience

A report was released earlier this week by Ericsson that “explores what resilience means today and how enterprises are developing strategies to circumvent the effects of future disruptive world events.”

The war on Ukraine. The COVID pandemic. Natural disasters. These occurrences raise alarms about the lack of readiness for what is to come and spark recognition that many major events, no matter their origin, tend to have ripple effects.

As an example, the report points to supply chain disruptions. Although it may only occur in certain markets, it has driven up prices for many products around the world. “Due to the interconnection of ecosystems, cascading impacts become broader than the initial cause.”

The report examines enterprise resilience, the ability to respond to a disturbance, maintain core capabilities, and return to its previous state after a disturbance, whether random, accidental or intentional.

How can an enterprise not only survive but also evolve and thrive during times of crises and disruptive changes? What is the role of technology (including digitalization, cloud, telepresence solutions and mobile connectivity such as 5G) and society in this context? How do enterprises relate to sustainability within a resilience framework? What are the differences between resilience and sustainability and why are they important?

Key findings:

  1. A more disruptive future awaits
  2. Enterprises are more prepared for disruptive events, enabled through digitalization and automation
  3. Societal and digital support is necessary for enterprises to handle future crises.
  4. Enterprises can avoid the vicious circle of decreased environmental sustainability by balancing efficiency and redundancy
  5. There are five paths to resiliency that enterprises tend to follow
    • Employee-led
    • Agile and cost-efficient
    • Automation first
    • Sustainability pays off
    • Innovation through digitalization
  6. It is time to rethink resilience

The report concludes by observing that none of the 5 paths is sufficient to reach a state of long-term resilience. Today’s short-term redundancy-based resilience needs to shift to a longer-term form of resilience based on efficiency and environmental sustainability and proactive business model innovation.

The report was based on quantitative data collected from 9200 interviews conducted in March and April of 2022, with respondents in 23 countries; half of the respondents were decision makers in companies and half were employees. A more disruptive future is anticipated.

Today, the topic of disruptive changes may be associated with the pandemic, military conflicts and war. Still, various other disruptive changes can affect enterprises and their employees, including cyber-attacks, energy crises, trade wars and natural disasters.

Of categories of disruptive events, respondents cited “pandemic” as having the highest impact and greatest likelihood, demonstrating what was still top of mind for the study participants in early Spring this year. I suspect natural disasters and military conflicts might rank higher if the study was repeated today.

Digitalization increases the availability of data. Yet, it also increases dependency on the connectivity and complexity of Information and Communication Technology (ICT) solutions, leading to new vulnerabilities for enterprises. This dependency is further accelerated by the increasing share of employees working remotely and using a wide range of devices. The risk of cascading larger-scale failures grows if digital system failures occur. Due to the interconnection of systems, the consequences can quickly spread internationally and impact a range of other infrastructures such as power grids and payment and security systems.

The report observes that it is impossible for businesses to prepare for all potential disruptive events.

“Certain risks will be hard to avoid, and when they occur, mitigation strategies can dampen potential damages.”

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