Developing resilient strategies

Yves Reding, CEO, EBRC
By 26/09/2022
Finance, FinTechs & RegTechs
Health & Life Sciences
International Institutions
Security, Defense, Space
Online Services
OES - Operators of Essential Services

In addition to being a health crisis, the Coronavirus pandemic is also an economic crisis from which companies can learn. The current situation has shown the need for a resilient digital world that is people-centred and sustainable.

Rarely has the word resilience had so much resonance as now, in this time of crisis. The ability to bounce back and emerge stronger in the face of changes in the environment, impacts or crises has become a necessity for companies. "Resilience is everywhere. It must be said that the shock was very violent and rapid with Covid-19," said Yves Reding, CEO of EBRC. Many lessons can be learned from this crisis. "Lessons which were self-evident before but which are glaring today".

1. Having resilient business strategies

It's a fact, the world we live in is changing. "We are moving towards increasingly rapid change and exponential complexity. We see less and less far and there is more and more uncertainty". In addition to predictable and clear events (trends), there are unpredictable events ("Black Swans"). The further we move forward in globalisation, the more the latter are likely to occur in greater numbers. Over the last twenty years, we witnessed several major crises: the bursting of the Internet bubble (2000), the 09/11 attacks (2001), the subprime mortgage crisis (2008-2009), the sovereign debt crisis (2011) and finally the COVID-19 (2020). "There will be other unexpected events, and they will most probably occur even more often". In order to overcome these unpredictable events, companies need now more than ever to build resilient business strategies taking into account the nature of the crises as well as trends (demographics, aging population, exponential digitization, cybersecurity, etc.). "Many companies are experiencing difficulties because they failed to take these major trends into account or based their business model on assumptions that were true 20 years ago but are no longer true today". Companies that already established a resilient business model are encouraged to continually challenge it in order to adapt to new potential risks. “For those that do not have a resilient business model, now is the time to act before it is too late. You always have to think about long-term value creation. After the emergency, everyone will have to challenge their business model because other risks, which are often underestimated, will arise. It will be necessary to analyse these risks, even the most unlikely ones, and their impacts in order to make the necessary changes”.

2. Adopting resilient business continuity and security strategies

In addition to this resilient business model, companies will need to adopt a business continuity and security strategy and thus implement a culture of continuous risk management. "Companies that have implemented this culture are prepared, but others are not at all prepared. Resilience means both agility and security". One principle must remain top-of-mind in all companies: Murphy's Law. "Anything that is likely to go wrong will eventually go wrong. And often at the worst possible moment." This holds true, as the occurrence of one incident generates a higher probability of causing other incidents. In the case of Covid-19 and digital, these risks include cyber-attacks and digital addiction. "The worst that could happen now in the middle of this crisis is that the IT environment collapses: cyber-attacks, over-saturated networks, etc. It is important to always consider risk coverage from a cascade perspective. Managing a risk means looking beyond the risk itself and considering all potential consequences, including the unimaginable". It is therefore necessary to think in the long term, to imagine opportunities and threats, and finally to build strategies that hold up no matter what happens.

3. The importance of local services in Europe

The third lesson to be learned is not underestimating the crisis. "In Europe, our health and social security system and research centres are fortunately of excellent quality, with exceptional skills. But it is hard to believe that key resources, such as masks, tests and respirators, are not yet sufficiently available and that Europe does not have sovereign production and strategic reserves, following the influenza A H1N1 crisis of 2009".

What happens today in the physical world is bound to happen tomorrow in the digital world. "If a super-virus should appear in the digital world tomorrow, at a time when we are totally dependent on it, what will happen? We are realizing that Europe is not a global digital power. We are totally dependent on the global giants, which are mainly American and Chinese.” It is therefore essential to build digital sovereignty in Europe today in order to control our future. Tomorrow, faced with a major cyber crisis, we will have to ensure the cyber-resilience of our essential services which are increasingly digitised: hospitals, water, electricity, transport, financial flows, etc.

4. Ensuring the sustainability of the digital transformation

Digital appears to be the great saviour and should experience an acceleration in growth in the coming months, bring with it a number of pitfalls to be avoided. "Digital is not the Holy Grail. If essential services are too dependent on digital, that is a problem. What we need to remember from this crisis is: the simpler it is, the more decentralised it is, the more resilient it will be. In the digital world there is a tendency to create complexity for the sake of complexity. We should only digitize if doing so really adds value. In addition, resilience must be taken into account upstream and throughout the digital transformation".