Executive Summary

Analytical Report: Strategies for Developing Resilience

BUS 3050

Team Comm 5

Eddie Delgado, Jea Orozco, Aidee Tapia Velazquez, Patrick Tejeda, Dominga Usher

March 15, 2021

Dr. Terri Horton MBA, MA

MEMORANDUM OF TRANSMITTAL

To: Professor Horton, CSULA College of Business and Economics

Date: March 15, 2021

From: Team Comm 5

Re: Strategies for Developing Resilience

The purpose of this project is to meet the analytical writing requirements for the BUS 3050 communications course. The group project was completed by Eddie Delgado, Jea Orozco, Aidee Tapia Velazquez, Patrick Tejeda, and Dominga Usher. The report is focused on “Strategies for Developing Resilience”. The report includes a literature review, data analysis and research findings.

TABLE OF CONTENTS

MEMORANDUM OF TRANSMITTAL I TABLE OF CONTENTS II EXECUTIVE SUMMARY III INTRODUCTION 1 STATEMENT OF THE PROBLEM 2 BACKGROUND OF THE STUDY 3 PUROPSE OF THE STUDY 4 SCOPE AND LIMITATIONS 5 RESEARCH METHODS 6 DEFINITION OF TERMS 7 LITERATURE REVIEW 8

Introduction

Strategies for resilience is the ability and process to respond quickly to changes, adapt well, and bounce back from disruptions while maintaining business operations. Resilience strategies are important to business continuity so that businesses so that when a disruption occurs, the mechanisms in place can absorb any hit they face without causing significant disruption. Most organizations lack business resilience strategies to ensure business continuity. Businesses are more concerned with short term benefits, specifically profit, therefore have not developed any long- term resilience strategies to be prepared for any unforeseen threat or disasters. One of the major contributing factors to businesses discovering their lack of resilience strategies was the COVID-19 pandemic. This pandemic has caused business disruptions never before seen around the world and many businesses were not prepared to deal with these disruptions and scrambled to survive. If businesses do not develop long- term resilience strategies, they will face business disruption as well as loss of profit. What follows will discuss the problem in greater detail and includes a review of literature, research findings, analysis, and recommendations.

Statement of the Problem

The topic of our analytical review is Strategies for Developing Resilience. The problem of the focus is Most Organizations Lack Resilience Strategies to Ensure Business Continuity. (Hindjua, 2020)

Background of the Study

Business resilience is an organization’s ability to promptly overcome any unexpected or unprecedented complications that may arise. Complications may be defined as any situation that throws off day-to-day operations. Strategies for developing resilience in the workplace are important to ensure the success of businesses long-term. It is the quality that separates the businesses that thrive after five years, from the fifty percent that fail according to the Small Business Administration website (2012). Some examples of resilience strategies according to Collins at Intercom (2020) are to act quickly as decision-makers when changes need to be made, and to consider the changing needs of employees.

The problem is that most organizations lack resilience strategies to ensure business continuity because planning for situations that are not guaranteed to come up is not a priority. They are not prepared for crises, so they find themselves struggling to find alternative ways to run their business to quickly adapt to changing environments. When an unexpected complication disrupts most businesses, Andrade (2020) says that they do not have contingencies in place to be able to react quickly so that their bottom-line is not unduly affected. An example is when the closure of indoor dining negatively impacted the restaurant industry, causing many of them to close temporarily as they devised alternate ways to continue doing business. One successful example is how some restaurants began offering takeout alcoholic beverages in order to make up for the profits they lost from their bar areas.

Most organizations focus on developing efficient methods for growth, such as reducing costs and maximizing profits according to an article by Kraaijenbrink from Forbes (2021). Although growth and efficiency is an essential goal of any business, the inclination to prioritize them causes organizations to overlook developing resilience strategies to overcome challenges. This proves to be costly as in the case of the restaurant industry when the pandemic caused by the coronavirus forced restaurants to operate by takeout and delivery only.

The implications for failing to develop strategies for business resilience is business disruption. A disruption is considered any type of occurrence that is not part of a business’ routine operations. These disruptions can lead to business closure, lowering customer retention, or revenue loss. Reeves and Whitaker for Harvard Business Review (2020) say this is more critical today due to the business environment being “dynamic and unpredictable.” Examples of business disruptions can range anywhere from not having a backup supplier when their primary one cannot deliver, to not having enough workers because the business did not have a plan in place to keep employees healthy, to something as enormous as a pandemic.

Purpose of the Study

The purpose of the study is to investigate factors that contribute to the problem of organizations

lacking resilience strategies to ensure business continuity. The most significant factor according to is that companies do not place a high value on Business Continuity Planning and fail to institute sustainability efforts” (Holsberg, 2013)

Scope and Limitations

The scope of this analysis involves CSULA Undergrad Business Students Enrolled in Spring 2021 that have had at least some work experience during the COVID-19 pandemic in 2020. The limitations of this report include inaccuracy in quantitative analysis due to the pandemic’s ongoing status, findings cannot be generalized to all industries, and that subjects may not fully understand the importance of developing resilience strategies.

Research Method

Research method is quantitative, using survey as the data collection tool, survey administered through Survey Monkey. A mixed methods approach using quantitative surveys and qualitative surveys, or interviews would also be appropriate, however in the interest of time, the project uses a quantitative approach only. One hundred surveys will be collected and analyzed. Survey will consist of 10 questions directly linked to the topic, problem, participant pool, contributing factors and potential implications.

Definition of Terms

Resilience: “The capacity to recover quickly from difficulties; toughness. (The Oxford English Dictionary | Oxford Languages, n.d.)

Business Continuity: Business continuity is the advance planning and preparation undertaken to ensure that an organization will have the capability to operate its critical business functions during emergency events. (“What Is Business Continuity?,” 2017)

Adaptability: the quality of being able to adjust to new conditions.(The Oxford English Dictionary | Oxford Languages, n.d.)

COVID-19: Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus.(World Health Organization, n.d.)

Literature Review

This report is focused on strategies for developing resilience. It will explore the problem that most organizations lack resilience strategies to ensure business continuity. The themes that were be reviewed are Business Resilience, Lack of resilience strategies, how COVID-19 amplified the problem, and the implications of business disruption. Search words such as reopen and reinvent respond, recover, thrive, and resolve and resilient were used to review the topic. A variety of sources that were used for the report include scholarly articles, industry reports, as well as expert reports.

Business Resilience

For businesses, resilience is the ability to anticipate, prepare for, respond to, and adapt to changes and/or sudden changes that may occur. They must have mechanisms in place to survive these changes and disruptions without significantly impairing their operations. According to Reeves and Whitaker (2020), resilience is “A company’s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances.” Similarly, Rowe (2020) defines business resilience as “having the capacity to withstand a knock, quick to learn, and agile enough to recover quickly.” While COVID-19 has brought the need for business resilience to the forefront, some point out that resilience was a desirable trait even before the pandemic, but these plans may not be sufficient for the long term. As Rowe (2020) mentions, “This was the case before the recent COVID-19 outbreak and is now critical for all organizations.” Microsoft for example, suggests that “Organizations that are successful in navigating these changes have one thing in common: they are resilient.”

Many organizations are now focused on their response to crisis, how they will recover from it, and how they will reimagine and move forward from it. Many agree that the areas companies need to focus on to help with their business continuity are to respond, recover, and reimagine. Microsoft suggest companies respond, recover, and reimagine by doing the following: “Ensure safety and business continuity, prepare to restart and rebound, invest for sustained competitive advantage.” A Deloitte article also suggests that companies should “Respond in which a company deals with the present situation and manages continuity; Recover, during which a company learns and emerges stronger; and Thrive, where the company prepares for and shapes the “next normal.”

Businesses that are resilient will become stronger and bounce back when faced with crises, so, it is important for them to have resilience as their focus. Kraaijenbrink (2021) suggests, “Not only can resilient organizations withstand the shocks caused by internal and external crises, but they also even become stronger because of this.”

Lack of Resilience Strategies

Business resilience has not been a focus for companies and organizations because some believe that companies, as well as shareholders, have been focusing more on maximizing short-term returns. They, however, point out that resilience is more about “a multi-timescale perspective: forgoing a certain amount of resiliency today for the sake of more-sustained performance in the future” (Reeves and Whitaker, 2020, p.1). Likewise, Rowe (2020) points out that “Most organizations will have some form of business continuity plans in place, but these plans may be insufficient for the scale and duration of the COVID-19 public health emergency.” Companies and organizations are now tasked with finding and developing strategies for long term resiliency in their organizations. Companies need to put resiliency first instead of efficiency so that they can be stronger in times of adversity and unforeseen circumstances.

Many experts have concluded that business resilience in companies and organizations have taken into consideration short term effects and only certain disasters, but there are many things that could bring down a company. The lack of resilience strategies in most companies is because companies focus more on how they can profit rather than investing or spending on developing resilience plans. In a Financier Worldwide article, Summerfield (2020) indicates that “companies have been primarily concerned with the ‘here and now’ and thus overlooked resilience planning. Such effort may be considered a drain on their resources, an added expense that rarely provides adequate return on investment.” On the other hand, many have concluded that companies need to start thinking and planning long term. Roskoski and Clawson (2017) advises that an emergency response plan is not enough, instead, “It is times like these that your business continuity plan becomes a lifesaver.  An effective business continuity plan is the cornerstone of effective planning efforts and will frame your ability to respond, resume, and recover.”

While it has been determined by studies and experts that businesses believe developing a long-term resilience plan costs companies’ money that they will not get back an investment on, most advise that “Without business resilience planning, recovery will take longer and be costlier” Roskoski and Clawson (2017). IBM agrees as well that “Companies are now developing holistic business continuity plans that can keep your business up and running, protect data, safeguard the brand, retain customers – and ultimately help reduce total operating costs over the long term.

COVID-19 Pandemic Amplified the Problem

Towards the end of the year 2019 a virus better-known as COVID-19 began making headlines sickening people by the thousands every day. In March of 2020 COVID-19 was declared a pandemic by the World Health Organization. This impacted the lives of many adults and children with an immediate ‘stay at home order’ issued by the governments, nonessential business and schools were shut down. Nonessential businesses and schools were the just the surface of the many implications that were caused by this. Many companies had to allow their employees to remotely work from home to try and slow down the transmission of the deadly virus. Companies had to adapt to the new normal as the end of this pandemic was nowhere near sight. Businesses did not demonstrate the ability to resume daily operations as this disruption started. Many businesses did not have the appropriate business plan for business continuity during the pandemic “…90 percent of supply chain leaders said they needed to change their approach after the pandemic.” (Katy George, n.d.). Supply chains were equally affected by the many importing and travel restrictions that were also a result of COVID-19. “Not surprisingly, all that creates uncertainty across the global value chain, with distinct challenges for farmers, distributors, producers, consumer- and packaged-goods companies, and retailers alike. Managers with a clear understanding of the challenges across the sector will be better prepared to decide whether to wait out the crisis or to invest for a longer-term shift in consumer spending. Much also depends on whether—and how quickly—they expect a return to pre-pandemic norms.” (Felix, 2020)

Implications

Business disruption is the interruption on the business model and strategy and continuity. This can happen when something occurs that no one was prepared for such as a pandemic or other natural disaster. “A typical crisis plays out in three stages: Respond, in which a company deals with the immediate crisis and ensures continuity; Recover, during which a company learns and emerges stronger; and Thrive, where the company prepares for and helps to shape the “next normal.” (Deloitee SG, 2020) In the beginning of the pandemic businesses responded and many showed their lack of resilience strategies but continued and manage, perform, and produce. At this moment businesses are in the recovery stage; businesses are continuously adapting but are still pending the new normal. Once almost all business resume operations they will enter the recovery stage where they will adapt to the supply chain and operation changes. After the pandemic businesses will thrive in the new normal and be prepared for any possible business disruption in the future as described by Deloitte. One industry that was highly impacted by the onset of the COVID-19 pandemic was the food industry. Immediately causing restaurants to transform to take-out or delivery only but, with social distancing in place and no gathering indoors, restaurants had to close their doors to customers but continue providing food to stay financially afloat. Many of the restaurants had to adapt to delivery services such as UberEATS, Postmates, and Grub Hub. Restaurants and other businesses were not prepared for this immediate change. This pandemic caused the lack of resilience strategies in the food industry to surface and cause business disruption.

Conclusion

The Literature Review explored resilience strategies and the implications of businesses who lack business strategies, and examples of what can happen if resilience strategies are not in place. As well as how COVID-19 amplified the problem and industry after industry lacked resilience strategies in place. Ultimately the lack of resilience strategies has dire implications, without resilience strategies the organization can risk the long term financial and reputational health of an organization.

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Reference Page

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