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Resilience is the ability to recover from setbacks, adapt to change, and keep going in the face of adversity. Most companies today are taking stock of their vulnerabilities and looking for ways to become more resilient, ensuring their business continuity. Corporations can increase their resilience by increasing energy self-sufficiency, ensuring IT systems are protected, implement localized and circular supply chains, and make innovation and sustainability core to their strategy.
[Tweet “Corporations have spent much of the last decade focused on optimization and efficiency. Today, that focus has shifted to building resilience.”]
From building efficiency, to building resilience
The global pandemic has profoundly shaken society and will continue to be a catalyst for change as we build the new normal. Beyond the immediate and severe impact of the public health crisis on communities, COVID-19 will continue to disrupt and challenge businesses for some time.
4 strategies to build corporate resilience
1. Resilient IT systems
A profound increase in digitization happened overnight – from teachers giving online classes, to doctors providing remote consultations and an unprecedented shift to online shopping. In response to increased customer demand during the pandemic, Amazon hired 175,000 people and US retailer Target reported a nearly 300% boost in digital sales in April. For some people working remotely has benefitted their work/life balance. But there are also new risks, increased cybersecurity vulnerabilities, and increased inequality of those who can and cannot work from home.
Increasing cybersecurity efforts will be needed as more vulnerabilities emerge when more business models go digital. Cloud-based cyber-attacks on business have increased 630% between January and April this year already. [1] Now is the time to invest in robust cybersecurity systems to ensure companies are protected. New startups and innovative companies like Claroty, VDOO, Nozomi and Fortinet are providing world-class industrial cybersecurity solutions that will help protect companies and ensure business continuity.
2. Resilient energy supply
While many companies pre-pandemic were looking to generate their own electricity for financial gains, additional drivers will further accelerate the installation of microgrids, as self-sufficiency, operational protection and the increasing need for a steady supply of electricity goes mainstream as the world goes digital. We are undoubtedly more reliant on electricity than ever before. Microgrids powered by renewable energy are more resilient, lower electricity costs, and offer an unbeatable security of electricity supply. A recent analysis reported that though the current crises has slowed growth in the short term, global annual energy storage capacity additions are forecast to hit 23.3 GW per year in 2025, up from just 4.1GW in 2019.[2]
3. Resilient supply chains
Supply chains have been disrupted around the world, and companies are now looking at making them more automated, shorter and circular. Supply chain resiliency means manufacturing products closer to where they are consumed. Short, circular supply chains are not only more sustainable for the environment, they are less vulnerable to price volatility and can reduce costs and risk. In a recent WEF report, Mourad Tamoud Schneider Electric’s Supply Chain Executive VP, states “the importance of developing stronger business continuity plans and operating shorter, regional supply chains oriented closer to the point of demand.”
While our physical world may continue to be distanced, paradoxically the increased automation and digitization of business models has also created new opportunities for innovative startups from around the world. While in the past companies may have preferred meeting new vendors in person making global expansion nearly impossible for time and capital stretched start-ups, they now are more willing and comfortable to do business entirely digitally across the world.
4. Resilient business models
Companies large and small are looking at their current business models and evaluating how they can go digital in new ways, whether their customer value proposition has changed, if capabilities or technology are missing from their portfolio and if revenues model need to be adapted to meet their customer needs. Similar to every adversity humans have faced, we are sitting on the precipice of a mountain of innovation to come. Rather than try take on these challenges themselves, companies should look to partner with others, foster internal ideas and innovation by enabling experiments and integrating sustainability in every pivot and process to ensure resilience.
Innovating for a sustainable world
One of the strongest tools we have to become more resilient and to build a post-Covid response offering more equality and sustainable growth is innovation. Investing in future-proof jobs and technology to help the world transition to renewable energy to lower emissions promotes a green recovery. Investing in entrepreneurs and startups that are helping to build resilience and reduce inequality ensures that corporations foster new business opportunities while building a stronger world. AlphaStruxure designs, builds, owns and operates decentralized energy systems that deliver sustainability, resilience and long-term savings for large energy users, and Autogrid’s software enables flexible renewable energy to be utilized efficiently by grids.
As my colleague Philippe Delorme, Executive VP for Energy Management recently posted, “Now is the time to commit to a clean energy transition”. My hope is that this shift in focus is profound and in a new era of increased sustainability, resiliency and responsible capitalism, we will see the forces and talent that drove technology and innovation during the last decade now focus on innovating to address the biggest issues facing humanity; fighting climate change, reducing inequality and creating a more sustainable world.
[1] McAfee, Cloud Adoption and Risk Report
[2] Frost & Sullivan, Outlook for the Global Energy Storage Industry, 2020
