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The 2018 Organizational Resilience Index report

BSI has published results from its 2018 Organizational Resilience Index report, which finds that the importance of organizational resilience has risen.

The 2018 Organizational Resilience Index is based on more than 800 interviews with senior executives across the globe and assesses organizations against 16 key elements, derived from international standards of best practice relevant to resilience.

Despite an overall perceived improvement in resilience, business leaders are wary of what the future holds. Technological challenges emerged this year as the most significant source of risk, identified by more than a fifth (21 percent) of senior leaders. Governance concerns and skills shortages were similarly recognized as key challenges – more than six in ten considered one of these three factors a top risk for their organization. Governance and accountability was also the element that rose highest up the importance rankings this year.

As businesses become more aware of the importance of resilience to long term success, they have increased their focus on governance and internal training, which rose five places on the scale of importance, with a significant reduction in the attention paid to product and service innovation. China is the notable exception to this concern, with senior leaders perceiving innovation as the most important factor in preserving long-term resilience.

The performance of supplier management has dramatically improved in the last 12 months, rising 10 places on the scale. This indicates that businesses have sought to firm up their supply chains following a sharp increase in disruption in recent years.

The research revealed a disconnect between the boardroom and the ‘shop floor’. Members of senior management teams rank their own leadership performance higher than junior managers – a trend that is particularly pronounced in organizations that are over 50 years old.

Of the 16 elements that make up Organizational Resilience, the report found that the most and least important are (+/- numbers denote annual move in rank):

Most important elements

  1. Financial Management (+1)
  2. Leadership (+1)
  3. Vision and Purpose (+1)
  4. Governance and Accountability (+5)
  5. Awareness and Training (+5)
  6. Reputational Risk (-5)
  7. Information and Knowledge Management (-2)
  8. Business Continuity (=)
  9. Resource Management (-2)
  10. Culture (+3)
  11. Adaptive Capacity (+1)
  12. Innovation (-6)
  13. Supplier Management (-2)
  14. Alignment (+1)
  15. Horizon Scanning (+1)
  16. Community Engagement (-2)

Highest performing elements

  1. Financial Management (=)
  2. Governance and Accountability (+3)
  3. Vision and Purpose (+1)
  4. Reputational Risk (+5)
  5. Awareness and Training (+7)
  6. Supplier Management (+10)
  7. Information and Knowledge Management (+6)
  8. Leadership (-5)
  9. Alignment (-7)
  10. Resource Management (=)
  11. Business Continuity (-4)
  12. Horizon Scanning (+2)
  13. Innovation (+2)
  14. Culture (-6)
  15. Adaptive Capacity (-4)
  16. Community Engagement (-10)

Howard Kerr, Chief Executive at BSI, commented: “Faced with these challenges, companies must continue to innovate and balance risk against opportunity. This year’s Index sees many firms shying away from innovation and technological disruption. Those that succeed over the long-term recognize that failing to adapt means missing out on opportunity.

“It is encouraging that in this year’s report we see both higher levels of resilience and an increasing number of resilience specialists within organizations. Leaders around the world have a responsibility to embed a state of preparedness across their organization, and I’m pleased to see how governance and training has risen up the corporate agenda.”

https://www.bsigroup.com



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