In association with the Centre of Economic Business Research, Aviva surveyed 1,000 UK businesses on their views on resilience. Based on these findings, Aviva Investors has collated the six areas of business where resilience matters most.
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At Aviva Investors, we believe resilience is achieved by managing multiple risks. We build investment portfolios with the worst- and best-case scenarios in mind, while considering the many potential futures in between those extremes.
We construct portfolios to be resilient by design. But, as all businesses will understand, there are many ways to achieve resilience.
Using the insights gained from an in-depth survey conducted in association with the Centre of Economic Business Research, here are the six types of resilience businesses need in order to overcome challenges and successfully adapt to change.
1. Employee resilience
Protecting the wellbeing of your workforce is critical for building a resilient business.
The happiness of your employees affects your ability to attract and retain talent – and can even impact your wider reputation with customers, clients and partners.
To improve employee resilience, you need to have good people management in place and actively monitor levels of employee engagement.
Taking the time to identify any potential skill gaps, and then offering appropriate training and / or hiring those with the skills you are missing will help you build a resilient workforce that is ready and able to respond to any challenge.
2. Environmental and social resilience
With many people becoming increasingly aware of environmental and social issues, there is now more pressure on businesses to demonstrate their practices are ethical.
It is not enough to simply appear this way as a public relations exercise. To truly be resilient, businesses must be accountable for their actions and deliver on their promises concerning corporate responsibility.
For those focused on delivering products, sustainability should be a long-term objective. For example, with single-use plastic bans already in effect in some countries, businesses need to protect themselves against potential future legislation that could outlaw existing products or practices.
In terms of social responsibility, resilient businesses instil a culture that promotes diversity and inclusion. This can positively impact the appeal of the business as an employer, as well as bring in fresh ideas and perspectives.
3. Operational resilience
Most business owners understand the importance of operational resilience.
This involves contingency planning and implementing risk-management strategies – both of which protect businesses against events beyond their control.
The external risks businesses need to mitigate against vary depending on the sector. However, these can include protections for physical risks, such as the impact of extreme weather or damage caused by fire or vandalism, and digital risks such as cyber attacks and data breaches.
There are also less obvious risks that need to be considered. These include regulatory changes, the state of the wider economy, and potential ripple effects from suppliers’ exposure to risks.
4. Commercial resilience
Insights on how to gain new clients and customers, as well as how to retain existing ones, can help businesses become commercially resilient. This is further supported by collecting customer feedback and investing in data-driven sales and marketing strategies.
Commercial resilience also involves understanding that good service alone is not enough to ensure customer loyalty. To be resilient, you must recognise the importance of a wider business strategy, and the risks of being over reliant on a small number of clients.
5. Financial resilience
Cashflow is a crucial element of financial resilience.
To protect yourself against a variety of risks and ensure you have the funds to take advantage of opportunities, you need ready access to finance.
Continually monitoring your business’s financial performance and protecting your assets are also important for building financial resilience.
6. Future resilience
Resilient businesses are designed to last and withstand change. In order to remain competitive over the long term, they are built with considerations for societal change and technological advancements.
Developing new products is one of the ways businesses can address change. In order to future proof itself, a resilient business will prioritise product innovation and thought leadership.
To be future resilient, businesses also need to have a long-term plan with the flexibility to respond to change.
You can read more about the six types of business resilience in Aviva’s research report, UK Business Resilience: the state of the nation. This comprehensive report offers a state-of-the-nation picture of resilience of businesses in the UK, analysing unique survey insights and ONS data.
The results of this survey were originally published on aviva.co.uk