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What is resilience in business?

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Reaching for resilience

In the news

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Businesses on the brink. Thousands of UK companies could be pushed to bankruptcy in 2023 as businesses continue to grapple with high costs and glum consumers. From October through December 2022, the number of UK firms at risk of failure increased by more than 33% compared with the previous year. Companies are repaying COVID-19-related loans at the same time that consumers are reigning in spending. Yet overall, UK businesses have shown “incredible resilience,” according to the CEO of a major UK bank. [BBC]

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Small but mighty. Europe’s small and medium-size enterprises (SMEs) were better able to weather the shocks of the COVID-19 pandemic than larger companies, according to Eurostat. Nearly all of the companies that make up Europe’s nonfinancial business economy, 99%, employ fewer than 50 workers. European SMEs added $3.5 trillion in value in 2020, a decrease of 5% compared with 2019. However, that was a smaller decline than in the overall nonfinancial business sector, which saw value fall 6% from 2019 to 2020. [WEF]

More than half of senior leaders believe the COVID-19 pandemic has made risk and resilience much more important to their organizations.

On McKinsey.com

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Bounce back. In the face of looming economic uncertainty, many leaders are thinking more than ever about building resilience. In business, resilience means dealing with adversity and shocks and continuously adapting for growth. Truly resilient organizations actually thrive in hostile conditions. McKinsey research on the financial crisis of 2007–08 shows that resilient companies not only outperform their peers through a downturn and recovery—they also accelerate into the new reality, leaving peers further behind.

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Six key dimensions. There are six key dimensions business leaders should consider as they foster resilience in their organizations, explain McKinsey senior partner Andrew Grant and coauthors. One of them, reputational resilience, thrives on internal alignment around operating in geopolitically sensitive markets. As an example, many companies have chosen to stop doing business in Russia as a result of the war in Ukraine. See our new McKinsey Explainer for lessons in resilience from some of today’s top executives.

Grasp six facets of resilience

— Edited by Belinda Yu, editor, Atlanta

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:56 - 1 Feb 2023

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What is resilience in business?

Reaching for resilience

In the news

More than half of senior leaders believe the COVID-19 pandemic has made risk and resilience much more important to their organizations.

On McKinsey.com