I want to talk about resilience, and maybe to start I could define what do we mean by resilience? I’d offer we’re living in volatile times, with major disruptions, geopolitical tensions, inflation, climate, ongoing impact of the pandemic.
To me, resilience means that organizations must be able to play offense and defense at the same time. Often our focus has been too much on recovery and playing defense, but truly resilient organizations don’t just recover and survive, they thrive.
This is key to ensuring a sustainable, inclusive future for all. Resilience both enables and depends on meaningful economic growth, emphasizing improved quality of life, equality, and inclusiveness. We need to apply resilience at several levels.
For public-private, it’s working together through the COVID pandemic. Across value chains, it’s minimizing disruptions. For companies, its ensuring sustainable business growth. And at our individual level, it’s leading through disruptive times.
Our latest research shows that inaction on resilience can be quite costly. The impact of resilience, or maybe more accurately the lack of it, on annual GDP growth is between 1 and 5 percent globally.
Now if we turn to Asia, what’s the imperative for resilience in Asia? People, organizations, and economic buffers are becoming exhausted from constantly operating in crisis mode. We all know Asia is on track to account for 40 percent of the world’s capital consumption and more than 50 percent of global GDP by 2040.
However, there’s major disruptions, both today and on the horizon across Asia. Energy, component, and raw material prices are rising at the fastest rate in more than four decades. How can organizations respond to inflation and secure access to the physical resources they need?
On the supply chain side, disruptions cost the average organization almost half of one year’s profit over the course of a decade. How can companies secure these supply chains to mitigate these costs?
If we turn to net-zero, meeting the net-zero ambition will require an additional $130 trillion worldwide in global expenditure on capital assets by 2030. How can companies turn these net-zero transitions into lasting, competitive advantage?
I’d argue we need to think of resilience as a muscle that we can grow and strengthen across three lenses. The first lens is the organizational lens, shifting organization models to be more agile. The second is a value chain lens. Across a value chain, how do companies collaborate on things such as integrated supply chains? And the final is at an individual personal resilience level. How do we invest in our most important assets, our people, to build personal resilience?