Blog 1
What makes an SME resilient? Reflections from the ILO’s SURE programme
27 January 2023
Resilience has become a popular buzzword that policy makers and business leaders like to throw around these days: Whether it is the Covid-19 pandemic, the global supply chain crisis, the war in Ukraine, or the energy crisis – people, businesses, infrastructure, and indeed our entire societies and systems must become resilient!
But what does resilience mean, and where does the concept come from? Resilience comes from the Latin terms “re” and “salire” which translates into “again” and “come up”. The idea that one must “come up again” after crisis was originally put forward by modern psychology to explain why certain individuals are better able to handle stress and adapt to adversity. Over the past years, resilience has found its way into mainstream culture where it is now promoted as a concept that applies not only to persons, but also to organizations and businesses.
In 2017, the International Standardization Organization published the standard ISO 22316:2017 “Security and resilience – Organizational resilience – Principles and attributes” followed in 2019 by ISO 22301 “Security and resilience – Business continuity management systems – Requirements”. Ever since, business leaders have tried to interpret and apply the standards within their own organizations.
The Sustainable and Resilient Enterprise (SURE) programme of the ILO breaks down the complexity of ISO 22316 and 22301 into plain words that SME leaders in advanced and developing economies can relate to: “business resilience is the ability of a business to anticipate and respond to crisis, not only to survive and recover but also to evolve.”
Fine – so much for the theory! But what steps should SME leaders take to build business resilience? In a nutshell, it comes down to three capacities that SME leaders should build at personal and enterprise level:
The first capacity “Leadership & Culture” refers to the soft skills that are needed to create an environment where business resilience can grow organically: The capacity to (1) provide clear direction and purpose to staff when the business faces a crisis and to (2) engage staff in achieving business resilience objectives. Importantly – staff engagement needs to happen from day 01 when SME leaders start developing the business resilience strategy. If staff do not own the strategy, they won’t be able to take any directions during a crisis.
The second capacity “Risk Analysis & Management” focuses on the hard, technical skills that are required to put words into action: The capacity to anticipate risks, withstand crises and to continue delivering core products and services whilst responding to changing market and consumer pressures. Or in other words, SME leaders need the technical skills to blend classical business continuity planning with business adaption strategies.
The third capacity “Networks & Partnerships” requires systems-thinking skills to understand interdependencies and to seize opportunities for cooperation: “The capacity to engage with actors that are important to the business such as suppliers, competitors, government agencies and others, to achieve business resilience objectives.” This last capacity is arguably the most important one. No business exists in isolation. SME leaders who are unable to engage effectively with the actors in their business ecosystem are doomed to fail, regardless of their leadership and risk management skills.
The author of this blog post is Julian Schweitzer.
But what does resilience mean, and where does the concept come from? Resilience comes from the Latin terms “re” and “salire” which translates into “again” and “come up”. The idea that one must “come up again” after crisis was originally put forward by modern psychology to explain why certain individuals are better able to handle stress and adapt to adversity. Over the past years, resilience has found its way into mainstream culture where it is now promoted as a concept that applies not only to persons, but also to organizations and businesses.
In 2017, the International Standardization Organization published the standard ISO 22316:2017 “Security and resilience – Organizational resilience – Principles and attributes” followed in 2019 by ISO 22301 “Security and resilience – Business continuity management systems – Requirements”. Ever since, business leaders have tried to interpret and apply the standards within their own organizations.
The Sustainable and Resilient Enterprise (SURE) programme of the ILO breaks down the complexity of ISO 22316 and 22301 into plain words that SME leaders in advanced and developing economies can relate to: “business resilience is the ability of a business to anticipate and respond to crisis, not only to survive and recover but also to evolve.”
Fine – so much for the theory! But what steps should SME leaders take to build business resilience? In a nutshell, it comes down to three capacities that SME leaders should build at personal and enterprise level:
The first capacity “Leadership & Culture” refers to the soft skills that are needed to create an environment where business resilience can grow organically: The capacity to (1) provide clear direction and purpose to staff when the business faces a crisis and to (2) engage staff in achieving business resilience objectives. Importantly – staff engagement needs to happen from day 01 when SME leaders start developing the business resilience strategy. If staff do not own the strategy, they won’t be able to take any directions during a crisis.
The second capacity “Risk Analysis & Management” focuses on the hard, technical skills that are required to put words into action: The capacity to anticipate risks, withstand crises and to continue delivering core products and services whilst responding to changing market and consumer pressures. Or in other words, SME leaders need the technical skills to blend classical business continuity planning with business adaption strategies.
The third capacity “Networks & Partnerships” requires systems-thinking skills to understand interdependencies and to seize opportunities for cooperation: “The capacity to engage with actors that are important to the business such as suppliers, competitors, government agencies and others, to achieve business resilience objectives.” This last capacity is arguably the most important one. No business exists in isolation. SME leaders who are unable to engage effectively with the actors in their business ecosystem are doomed to fail, regardless of their leadership and risk management skills.
The author of this blog post is Julian Schweitzer.