The COVID-19 pandemic took everyone by surprise, showing business leaders the need to be prepared for anything. However, it's not just health crises to worry about. With remote work becoming common and AI likely to replace many jobs, experts warn of a possible global recession. So, what can you do?
Now is the time to create strong strategies to keep your business going. You'll hear terms like "business continuity" and "business resilience." These terms are related but not the same. Understanding their differences can help your business survive and thrive through future challenges.
What Is Business Resilience?
Business resilience is a company's ability to handle disruptions, adapt to new environments, and maintain resources and high-quality output. This trait should be part of the company's culture and structure. It's about finding not just solutions but opportunities as well. According to the World Economic Forum, businesses need to be adaptable to emerging trends and resilient to seize opportunities that come with changes.
The COVID-19 crisis showed what business resilience looks like. From April to September 2020, company sales dropped by 45%, according to the World Bank. Moreover, nearly 100,000 businesses permanently closed, according to Yelp's September 2020 report. Despite this, many businesses still managed to keep going, and some even thrived during and after the pandemic.
In a marked shift from the past, businesses are now taking a proactive approach, prioritizing resilience and flexibility to equip themselves better to manage disruptions. The majority of the innovations they adopted were primarily customer-facing, a strategic move that can be seen as part of their customer retention strategies. Their new business resilience plan was centered around introducing new products, forging new partnerships, and implementing sales-model changes, all in response to the need to adapt to flexible work arrangements.
Key Components
Risk Management and Planning: Building a resilient business means understanding the risks it can face and how to overcome them.
Adaptability and Flexibility: Resilient businesses are flexible, allowing them to quickly change strategies and structures when needed.
Good Governance and Management: Resilient business leaders can’t be close-minded or uncooperative. Good governance cultivates a proactive environment that prepares and trusts employees for changes.
Long-Term Vision: Resilient businesses understand there’s always more than one way to achieve their objectives. That’s why they encourage innovation, new partnerships, and strategies.
What Is Business Continuity?
Business continuity is an organization’s plans and procedures to keep operations going in case of disruptions. It involves developing a business continuity plan that considers the possibility of sudden disruptions within the company, the industry, or the physical location.
For example, if a business’s office is located in an area with frequent typhoons and power outages, it needs its computers running because they contain sensitive and important customer data. Part of its business continuity plan could include installing generators and regularly backing up its files to an external drive during fair weather days.
Leaders must develop a comprehensive business continuity plan because the potential consequences can be significant. According to the figures from Datto, a small business can lose $10,000 in just an hour of downtime, while larger companies can lose up to $5 million.
Data breaches are another threat that leaders must consider when developing their business continuity plan. According to the World Economic Forum, with everything now being online, from personal data to business operations, cyber poses the biggest risk to companies.
Because of this, you must ensure you have the infrastructure to protect your customers' data. Especially within the business process outsourcing industry, it's essential to focus on call center data security to safeguard both company and customer data. Doing so guarantees the security of any data received and processed in the call center.
Key Components
Risk Assessment and Mitigation: A business continuity plan involves assessing potential risks and finding ways to protect businesses. To determine the effects of these risks, a business impact analysis is commonly used.
Backup and Recovery Systems: Developing redundant systems of fail-safes allows a business to continue operations even during total disruption, such as a power outage.
Continuity Plans: A business continuity plan is one of an organization’s best defenses against crises since it guides managers and employees on the procedures to take during unforeseen events.
Testing and Monitoring: Businesses can’t set and forget their continuity plans. They should regularly train staff and evaluate processes to assess progress in their strategies.
Business Resilience vs Business Continuity: Five Factors to Consider
It can get confusing to differentiate between business continuity and business resilience. Review the following information to help you understand their definitions and what sets them apart.
1. Scope
Business continuity involves the organization’s procedures to stay protected during a crisis. It’s about preparing by planning so leaders can respond calmly to unexpected events.
On the other hand, business resilience is not just about surviving a crisis; it's about thriving in the face of adversity. It has a deeper and broader scope, reaching the culture of a business, how resistant it is to disruption, and opportunities in the market to seize.
2. Approach
A business continuity approach is more process-driven when disaster strikes, ensuring everything operates well. Business resilience is more strategic, enabling organizations to pivot rapidly and effectively when necessary.
Business continuity involves laying out plans to ensure existing operations are still in motion in one way or another to minimize the impact of the disruption. A common business continuity plan approach is the Plan, Do, Check, Act (PDCA) Model, a widely recognized and effective tool in business continuity planning. In simple terms, it could look like this:
Plan: Managers should conduct a business impact analysis to assess the severity of the disruption. In the case of a storm causing power outages, the Plan step would include determining which areas would be operational and which wouldn't be.
Do: Employees will then need to perform the protocols of their company's continuity plan. For instance, if there's no electricity in the building, employees would need to retrieve data from backup devices.
Check: Managers must regularly check employees' knowledge of the continuity plans to ensure they know them well. Running drills and exercises are common ways to review employees' performances.
Act: Finally, employees must proactively protect the business from disruptions, typically updating plans and drafting after-action reports (AAR) to identify areas for improvement.
On the other hand, in addition to having contingency plans, a resilient business may educate its staff on the latest trends to ensure they’re ahead of competitors should new technologies emerge. Resilient organizations may also be more open to adopting new business models, as many start-ups have done during the pandemic.
3. Timetable
A business continuity plan is typically a short-term solution to ensure that disruptive events don’t stop the business in its tracks, while a business resilience plan is longer-term. The Harvard Business Review debunks a myth about business resilience, showing that it can have beneficial effects long after the event.
4. Benefits
A business continuity plan ensures an organization can resume operations even during crises. It allows them to sustain their revenue, protect themselves from further losses, safeguard employees, and maintain the core functions of the business.
Since business resilience has a much broader scope, it helps the business become even more competitive. It also encourages employees to innovate solutions and stimulate long-term growth.
5. Impact
Since a business continuity plan is usually for the shorter term, its impact may only go as far as minimizing the effects of the disruption. This means businesses will likely return to how they were before unless the upward operational momentum is sustained. While that may not always be disadvantageous, it could also make the business vulnerable to further disruption.
That's why some resilient businesses grow from the disruption, becoming antifragile. Some changed their business model to survive and thrive, allowing new customer experiences and working methods.
Why Companies Need Business Resilience and Business Continuity
An organization needs to understand business continuity and resilience to succeed despite the ongoing debate about which is more important. Understanding both concepts can bring numerous benefits to a company.
Prepares the Business for Unseen Disruptions
Business resilience and continuity both involve handling unexpected disruptions. To ensure long-term success, business leaders must consider all possible scenarios. According to Murphy’s Law, anything that can happen will happen. Even unlikely events can occur, so businesses need to take extra precautions.
Maintains Essential Functions and Services
Business continuity and resilience focus on survival by keeping essential functions running. A great example is how restaurants adapted during lockdowns. With no dine-in allowed, demand for food delivery surged. Restaurants quickly shifted to offer takeout and delivery, which became crucial for customers. Without this pivot, many businesses would have failed.
Increases Customer Trust and Loyalty
According to a Protecht survey, 56% of the respondents rated operational resilience a very high priority for a good reason: customers are more willing to trust your business if they know you can deliver the same high-quality service, even during times of crisis.
Protects Businesses From Loss of Resources and Assets
There’s little time to think during crises. Creating a business continuity plan beforehand allows you to consider the best possible allocation of resources during a potential problem. Knowing what to do beforehand will help you stay calm during crises and protect your company’s resources and assets.
Ensure Long-Term Business Growth
A key to business growth is lasting long enough to become profitable. This requires resilience and adapting to change, especially with fast-evolving technology. According to Zippia, 70% of companies are already working on their digital transformation strategies to stay competitive.
Keep Moving Forward
If continuity is about surviving, resilience is about thriving. It's about a business's plan and personality. Both business resilience and continuity are essential for long-term success. The economy is unpredictable, and the business landscape is constantly changing. Re-strategize and strengthen now to withstand future disruptions and thrive.
Managing your business through a crisis is stressful. If you rely on internal staff for tasks like customer service, consider outsourcing to cushion the impact of sudden changes. Select VoiceCom is an experienced BPO company in the Philippines that offers professional inbound and outbound call center services. Contact us today to learn how our outsourcing services can help your business during disruptions.