Irish businesses need to embrace a strategic approach to resilience to thrive in an era of constant disruption - PwC’s 2023 Irish and Global Crisis and Resilience Survey
19 April, 2023
- 9 in 10 Irish organisations report they’ve experienced multiple major disruptions in the last two years with nearly all being concerned about continued disruption in the next two years
- Over seven out of ten (76%) survey respondents said that the impact of the most serious disruption on operations was medium/high
- Around a third or less of survey respondents are highly confident in their ability to recover from multiple disruptions, but many lack the foundations needed for resilience success
PwC’s latest Irish and Global Crisis and Resilience Survey published in Ireland today reveals that Irish businesses need to fully embrace and invest in resilience to transform the way they operate as disruption is set to continue. The new research finds we are in an era of ‘permacrisis’ fueled by constant disruption and many Irish businesses lack the foundations needed for resilience success. This press release deals with the Irish findings in the survey.
Organisational resilience can be described as the ability of a business to evolve continuously, protect from shocks while at the same time being able to adapt, create value and maintain a competitive edge.
Data from nearly 2,000 respondents worldwide including Ireland provides insights into how business leaders are preparing for, and responding to, this new world of constant disruption. Over half (57%) of Irish respondents told us that resilience is ‘very important’ on their list of strategic priorities. At the same time, less than half (47%) have a business resilience programme in existence for five years or more (Global: 42%).
Following a war in Ukraine, inflationary pressures and geopolitical uncertainty, it is unsurprising that nine in ten (97%) Irish respondents reported to be concerned that their organisation will continue to face multiple disruptions for at least another two years. 76% of survey respondents said that the impact of the most serious disruption on operations was medium/high, disrupting critical business processes and services and causing financial and reputational issues.
Irish respondents more concerned about future disruptions than global counterparts
Irish respondents are more concerned than global counterparts about most types of disruption in the future. According to the survey the most concerning disruptions anticipated in the next two years are: Cyber attacks (Ireland: 60%; Global: 30%)), geopolitical disruption (Ireland:43%; Global: 21%), climate change/natural disaster (Ireland: 37%; Global: 21%), employee retention/recruitment disruption (Ireland: 37%; Global: 36%) and supply chain disruption (Ireland: 30%; Global: 23%).
Challenges more severe in Ireland
Many of the key challenges faced by Irish organisations in establishing a resilience programme are more severe in Ireland compared to global counterparts. 40% cited maintaining and developing the resilience programme as a key challenge (Global: 35%), another 40% cited team and expertise constraints (Global: 28%) and 33% cited executive sponsorship (Global: 26%).
Andy Banks, Risk Assurance Partner, PwC Ireland, commented: “Business leaders face an unprecedented level of disruption and uncertainty in today’s rapidly changing environment. Organisations are contending with external macro forces and internal business transformations, and it is against this backdrop that resilience has become one of the most vital strategic priorities in the corporate world.”
“Overall, the trends on how global businesses are developing organisational resilience are similar in Ireland. The survey shows that Irish businesses need to embrace a strategic approach to resilience to thrive in an era of constant disruption or ‘permacrisis’. Irish businesses are more concerned than global peers about the scale of future disruptions and they are also more challenged when it comes to implementing resilience programmes. Investment is key but Irish organisations are planning less investment than global counterparts over the next two years in key areas such as workforce resilience and disaster recovery.”
More strategic approach needed
Just around a third or less of survey respondents are highly confident in their ability to recover from multiple disruptions. Many lack the foundations needed for resilience success, for example, less than half (43%) of Irish respondents reported to be ‘fully involved’ in the overall business resilience governance of their organisaion (Global: 60%). Just a fifth (20%) admitted that their organisation’s approach to resilience is ‘fully integrated’ in their overall business strategy (Global: 21%).
One in five or less (in Ireland and globally) reported that they had the foundations needed for an industry leading resilience programme. This confidence gap puts organisations at risk of being exposed – particularly when the disruption spotlight is solely on them, as opposed to broader global or sector challenges.
A minority of Irish survey respondents revealed that their organisation had a crisis/recovery plan that is reviewed and regularly tested. For example, just 33% had such a plan for business continuity, 27% for cyber recovery and 20% for disaster recovery. Just 27% confirmed that their business resilience ‘training and coaching’ programme is ‘industry leading’.
Investment in key areas
Looking to the future, Irish respondents cited the single most important area of focus in terms of future proofing their resilience programmes is embedding a resilience culture (23%), followed by upskilling future leaders (17%) and technology enablement (17%).
The survey highlights that significant investment is planned over the next two years in key areas of organisational resilience. For example, 47% of Irish respondents revealed that significant investment is planned in cyber resilience (Global: 45%). Significant investment is also planned for crisis management (Ireland: 40%; Global: 39%) and business continuity management (40%; Global: 37%). However, fewer Irish respondents than global counterparts plan to invest in workforce resilience (Ireland: 23%; Global:36%) and disaster recovery (Ireland: 33%; Global:38%).
The survey data revealed three significant trends driving, what PwC has called, a resilience revolution:
- Integration: An integrated resilience programme is essential for today’s organisations. It is no longer sufficient for organisations to work in silos as they address today’s complex and interconnected risks. Businesses are actively moving to an integrated approach to resilience, centrally governing and aligning multiple resilience capabilities around protecting what matters most, and embedding the programme into operations and the corporate culture.
- Leadership: Thriving in ‘permacrisis’ requires an executive leader and upskilled teams. A successful resilience strategy and programme needs (1) executive sponsorship from the C-suite, (2) a programme leader with clear responsibility, and (3) a skilled team to do the day-to-day work.
- Programme approach: Building operational resilience around what matters most. Organisations must build operational resilience and ensure that enterprise planning and preparation are part of a broader continuous cycle. As more businesses integrate their resilience programmes, many are adopting the core principles of an operational resilience approach, focusing on protecting what matters most and prioritising investment based on what’s critical to their organisation and stakeholders. This allows organisations to manage risks with high reliability and to drive efficiency.
Those who have moved to an integrated resilience programme are significantly further ahead in many of the core elements of operational resilience, including risk and threat assessment processes, exercising and testing, and service and process dependency mapping, enabling companies to build a robust corporate immune system where an organisation can adapt, flex, and move forward stronger.
Andy Banks concluded: “It is hoped that the investment that is planned over the next two years will happen. The ability to adapt and respond to disruption is vital to maintaining trust built with stakeholders and protecting shareholder value and reputation – all at a time when the expectations for resilience of businesses and government have never been higher. To build a trusted and agile organisation, it is vital that business leaders invest in resilience across functions and people, and focus on an integrated approach, supported by technology to enable a panoramic view of their risk and resilience landscape.”
Notes to editors:
What is organisational resilience? Organisational resilience can be described as the ability of a business to evolve continuously, protect from shocks while at the same time being able to adapt, create value and maintain a competitive edge. It includes the ability to evolve and build agility into the organisation, maintain critical operations during disruption and maintain capital and cash flow during disruption.
About the Survey:
The research was carried out in late 2022 having 1,812 business leaders across many business sectors representing 42 countries and various industries sharing their observations on business resilience and disruption including 30 respondents in Ireland. This is PwC’s third such study analysing corporate crisis and resilience data. 41% of respondents were C-Suite.
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