Published on 04 March 2021

What makes a business resilient?

Running a business is exciting, but it also takes tenacity, composure and stamina. You have to be able to take some knocks, bounce back, restart, adapt and stay agile. This is the epitome of the term “resilience”. How do you achieve it? Here’s an overview of the key factors that help companies along their path to resilience.

What does it mean to be a resilient business?

Organisational resilience is a term used in business management to describe companies that face certain difficulties and have to reinvent part or all of their business strategy to survive. In his latest book ("Luxury and Resilience" published by Dunod), Eric Briones, Co-Founder of the Paris School of Luxury and editor of the Journal du Luxe says resilience enables businesses to “pick themselves up, continue, adapt, reinvent themselves and become stronger in the face of adversity”.

This is a multi-disciplinary approach. To continue to adapt, companies have to combine digital tools and technologies, managerial practices, market insight and agility. This is more relevant in the context of the current pandemic, which has weakened many parts of the economy. A 2020 study underlines that “companies prepared for the future have resisted better during the crisis. They are the most confident and best prepared for new trends, challenges and opportunities.”

 

Resilience enables businesses to pick themselves up, continue, adapt, reinvent themselves and become stronger in the face of adversity.

Eric Briones

 

 

 

So, what does it take to be a resilient business?

These resilient companies that are prepared for the future show some similarities:
 

  • a positive attitude towards change, which they see as an opportunity;
  • an open mind regarding new technologies which can be used to respond to a number of challenges;
  • active future planning to adapt to new ways of working;
  • strategies that are documented, specific, funded, evaluated and detailed;
  • regular monitoring to understand new trends within their business sector;
  • adaptability and ability to react rapidly to new trends or challenges and being faster to market than the competition.
     

 

The good news? Any business can become a resilient business. But only 20% of companies questioned in the study employ all six criteria.

Within the uncertainty and complexity of the global pandemic, what are the specific steps to building a more resilient company?

 

 

During and after the crisis, businesses must be more agile, caring and socially responsible

According to a research study run at Paris-Saclay University led by Marie Noéline Sinapin (research report "Companies and the aftermath of the Covid-19 crisis: a new organisational model between efficiency and resilience"), companies will need to step up their agility by becoming more proactive, so they are better able to seize new opportunities. 

The key to agility is well-being.

“Resilience is based on employees maintaining a good quality of life at work, as well as on constructive and harmonious relations within their ecosystem,” says Hugues Poissonnier, Professor of Strategy and Management at Irima. This major internal driver has also been highlighted by the Great Place to Work Institute in the USA, which considers that companies investing in employee well-being are more successful in times of crisis.  

Resilience requires a responsible, sustainable approach. 

Socially responsible companies that apply the ISO 26000 standard ensure their business organisation and operations take into account their impact on society, the environment and the economy. Through a virtuous circle of sustainable development and social responsibility, the resilience of an entire business ecosystem can be directly improved.

 

Resilience is based on employees maintaining a good quality of life at work, as well as on constructive and harmonious relations within their ecosystem.

Hugues Poissonnier

 

 

 

Resilience also depends on digital innovation

An innovation culture is also conducive to business development, whatever the context. Companies that monitor opportunities are faster to unleash creativity. This is where digital technology can offer many opportunities for adaptation and agility, evidenced, for example, by the increase in remote working and other practices that enable a better work / life to work / life, in particular by reducing commuting time and avoiding associated transport emissions.

Luxury and e-commerce, a great lesson in resilience

Eric Briones has found that studying the history of luxury has involved “contemplating 10,000 years of resilience”. 2020 was particularly symbolic. Back in March the outlook did not look good, especially for major markets such as China. Stores were closed around the world due to their “non-essential” nature and e-commerce was still pretty weak. However, the situation in 2021 is much more positive. “In the end, the luxury market has been strengthened by the crisis, even showing a 48% increase in sales in China.” 

Above to beyond maintaining its market share, the luxury sector has rebounded strongly through improving e-commerce and the rethinking of business models.  

“It has doubled the share of e-commerce (23%), reinvented itself by offering gels and masks to caregivers and questioned its business model in terms of a new sustainable and responsible luxury, even opening the door to a second-hand market.”  

 

 

Are there lessons in resilience for start-ups?  

Agathe Wautier, leader of the Galion Project, which is a think tank of some 300 entrepreneurs, notes that start-ups are also showing resilience. Their business models and operations, which are largely based on ICT tools, make a major contribution.

Out in the field, Olivier Baert, founder of Mydimm, lists the factors behind his start-up’s resilience: “We are a small business with very reasonable fixed costs. We were therefore fortunate not to have to make difficult decisions. As our processes are fully digital, our team was able to work from home very easily. We can access the design platform directly, which allows us to support our customers remotely. The agility and resilience of the team was great and so everything has been going really well.”

Could this ability to transform or even change course be the key to resilience? According to a survey conducted by Station F and 120 VC firms, 19.6% of French start-ups have changed their business models, 24.5% have changed their sales strategies and 12.1% have made significant changes to their offers. While they were not particularly strong at weathering a crisis, it was their ability to adapt that enabled them to find the path to resilience. 

Whether running at classic cruising speed or in times of crisis, the company must move forward, look far ahead, and consider and imagine the future. It is obvious that the Covid-19 crisis has shaken the business world and there will be painful social consequences in certain sectors. But it has also been an opportunity to reinvent and ensure tomorrow’s economy is more resilient and our social fabric is even stronger. Resisting, regenerating, reinventing: these are key catchphrases to consider.