Three fifths of global CEOs believe continuing economic uncertainty will lead to compromises in the ability of their organization to maintain high standards, threatening trust in their business and the companies they supply, according to a study commissioned by British Standards Institution.
The study explored the top threats to organizational resilience, with macroeconomic uncertainty ranked top, ahead of disruptive competition and information security.
The polling for this study surveyed 411 business executives, and was carried out by the Economist Intelligence Unit.
The 120 CEOs polled from around the globe, reveal how fragile modern operations with global supply chains are. Two thirds (64 percent) of bosses admit that the concept of organizational resilience is inconsistently understood across their business, despite 70 percent believing it to be vital to the long-term viability of their operation.
Encouragingly, 28 percent of CEOs are confident they secure an advantage in the market from organizational resilience, almost half (49 percent) claiming it enhances their company’s reputation and 39 percent suggest it has improved their organization’s competitiveness through quicker and better targeted responses to opportunities.
The study found that North American firms are more than twice as likely as European firms to have boosted the quality of their products and services through organizational resilience, something that is most commonly held back by short-term financial thinking, a lack of skills and a failure to focus on the management of resilience.
“CEOs may become so risk averse that they’re not only missing out on opportunities, but potentially undermining the long-term resilience of their organizations. Leaders need to have confidence in the ability of their team to remain agile and adaptive, while maintaining robust processes in the face of uncertainty. Ultimately today’s challenging conditions offer an opportunity to forge stronger team dynamics and delivery,” said Howard Kerr, chief executive of BSI.
Product quality control scandals at more specialist organizations/suppliers have led to serious repercussions for the firms they supply.
Honda was recently forced to recall almost 25 million cars due to issues with faulty airbags. The BSI research reveals the consequence of such activities and shows that the majority of firms, both large and small, worry about compromising standards.
Just a quarter (24 percent) of CEOs at firms with revenues under $500 million per annum are totally satisfied with their organization’s quality control processes, while this rises to only a third (31 percent) at larger firms.
Worldwide more than half of CEOs (52 percent) attributed failures in organizational resilience to a lack of skills amongst their workforce. In a signal as to the importance of the issue, more than half (57 percent) of CEOs take personal responsibility for driving organizational resilience across their business.
Just a quarter (25 percent) entrusted responsibility to colleagues below C-level in their seniority.
“Change must be led from the top. Organizations can be surprisingly naive, ignoring advice and best practice until they experience a setback themselves. CEO resignations aren’t just token sacrifices; they are a symptom of a wider malaise. Adapting and coping with change is a team effort, based on a culture of excellence across people, products and processes. True leaders recognize that Organizational Resilience is a strategic imperative across the whole business,” Kerr said.