The Covid-19 pandemic has significantly affected the hospitality industry, which is one of the most visibly hard-hit segments of the economy. At the same time the industry has proved its ability to quickly adapt to disruption and uncertainty. What can we learn from these positive changes to build resilience that enables businesses to cope with potential future disruptions and restrictions?
“Resilience is the ability of a business to withstand, adapt, and thrive in the face of shocks that are internal and external, as well as known and unanticipated.” [1]
With global temperatures estimated to rise at least 2.4 degrees, if annual emissions do not begin to decline significantly in 2050 [2], infectious diseases like SARS, Ebola, Zika and Covid-19 will further increase in incidence [3]. It’s more important than ever for companies to build resilience in across their operations. According to McKinsey true resilience requires balanced focus on six dimensions: finance, operations, technology, organisation, reputation, and business model [1]. This article will give you a quick introduction to the six dimensions and will be followed by three ‘short reads’ that will each cover two of the dimensions to guide hospitality owners on how to build resilience in their business. While the focus in these articles will be on the hospitality sector, we believe that the six resilience dimensions could be applied to any type of business.
Financial resilience is the ability to endure or recover from a financial shock. Therefore, a solid capital position and sufficient liquidity are crucial to withstand rapid drops in revenue or increased costs.
Operational resilience is the ability to adapt flexibly to changes in demand as well as remain stable during unpredictable operational disruptions without sacrificing quality, for example maintaining robust production capacity.
Technology resilience is the ability to make use of high-quality data to help reduce costs, enhance operational efficiency, to keep pace with customer needs and improve services and customer experience.
Organisational resilience is the ability to understand employees’ wants and needs to retain dedicated employees in a diverse workforce in which everyone feels included and can perform at their best.
Reputational resilience is the ability to align your company’s values with your actions and your words. It’s about listening to and communicating with your stakeholders to anticipate and address their expectations and responding accordingly to criticism of company behavior.
Business-model resilience is the ability to adapt to significant shifts in customer demand and the regulatory terrain.
This is the first in a series of articles. Next we’ll dive further into how hospitality owners can build resilience into their business, covering the first two dimensions: financial and operational resilience.
Stay tuned!
Written by Emma Holthuis and edited by Rosa Quarato, Andrea Cattaruzza and Sarah Wixey
References and further reading
[2] https://www.climate.gov/news-features/understanding-climate/climate-change-global-temperature
