Is your business built to survive?

0:00There are tons of forces shaping the future of business and governing, and I would argue that the vast majority of them are overlooked. You've got to think about your ecosystem because no organization is an island, and actually the attention and focus on that system's resilience has become even more important now. Something I ask executives all the time. What is the one belief about your business that everybody in the company has and believes is permanent? And what would have to be true for that to be wrong? The old way of doing business is over. From disruptive technology like AI to geopolitical tensions, business leaders need to be ready for change before it even happens.

0:47So how do you act before you know what's coming? I'm Femi Oke, a broadcaster and journalist. And I'm Lizzie O 'Leary, a podcaster and journalist. And this is Take On Tomorrow, the podcast from PwC. And welcome to our news series, which looks at how to build momentum around bold ideas. Today, is your business built to survive? Shortly, we'll hear from futurist Amy Webb on how she thinks business leaders should prepare for disruption. But first, to help us understand the challenges business leaders are facing, we're delighted to be joined by Bobbi Ramston-Knowles, a partner from PwC UK, who co-leads PwC's Global Centre for Crisis and Resilience.

1:35Hello, Bobbi. Hi there. So, Bobbi, organisations are facing so many disruptions right now. What are the main issues that leaders should be thinking about today? We're facing into really complex risks, whether that's geopolitical or indeed a supply chain disruption, cyber, AI. These risks are not only overlapping and conflating out, but they're causing real disruption for organizations. And we have to work out how are we going to actually continue to grow and generate value as well as protect the business through these different disruptive events. so one of the questions a lot of leadership teams are asking right now and i'm encouraging them to ask themselves is if we lost everything tomorrow what do we actually have to keep running in our business that matters the most what actually really keeps our organization viable through all that disruption and actually it's quite interesting when you ask that question at an executive level the answers you get are very very different and that's really where the real conversation around resilience starts.

2:42Bobbi, you listed a number of different challenges and sort of periods of change that businesses are going through. How well prepared do you think current businesses are to deal with all those challenges? So a lot of organizations have built plans. They've tested crisis plans. They've got business continuity plans, disaster recovery. Some organizations have even appointed chief resilience officer. Question is, is that enough? That is where it gets quite interesting because actually a plan, when tested, as we've seen the last couple of years where organizations have had to respond to cyber attacks or geopolitical risk and supply chain disruption, had those plans actually withstood the disruption they faced?

3:28And the answer in some cases is no. and I think it's because actually the way we've built our resilience capabilities isn't perhaps fit for what we need for the future and by that I mean we perhaps haven't always focused on protecting the things that matter the most to the organization we've actually tried to make all of our organization resilient rather than focusing on the most critical parts and putting resilient strategies enable us to protect what we would call is your minimum viable company the smaller set part of your organizations, your services, your products that really mean that if you're hit by disruption, you will remain viable, you will remain compliant, you will maintain trust with your stakeholders.

4:10And I think a lot of organizations have got a lot of work to do around that still. It sounds like business leaders may need to start thinking very differently about how they deal with risk and disruption. Exactly, Femi. And to help us understand how to navigate all of these changes, I spoke to someone who spends a lot of her time thinking and speaking about this issue with the business world. Amy Webb is a futurist, author, and the CEO of the Future Today Strategy Group. And we began by talking about how leaders should navigate disruptive events.

4:51There are tons of forces shaping the future of business and governing. And I would argue that the vast majority of them are overlooked. So what I'm seeing happen is that leaders are treating every shock at this stage as a freak event, as like a one-off. So whether it's a chip shortage or a bank collapse or an election that goes in a direction people didn't expect or a war that happened suddenly or a breakthrough in science or technology, All of these different facets are really just one node each in a system that has itself been shifting for years. So when leaders are reacting event by event, they are perpetually in a state of catch-up, or they are sticking their heads in the ground and hoping things will be better next quarter.

5:41This is not the case if an executive is using strategic foresight, which is a discipline that requires you to assemble the right types of data and look for patterns in those data and systematically look at that alongside of uncertainties and build out plausible scenarios to get to strategic decisioning in the present. And there are different degrees of doing strategic foresight. Some of it's very labor intensive, but at an executive level, it's really about ingesting the right new information, having a way to think about it, and then using that in a flexible way to make decisions. So how do the most successful organizations do this in practice?

6:27The companies that do the best at this are the ones that have enough research that's data-backed that they have an informed point of view on the farther future. So this is not speculation 10 years from now. This is we have determined this is where the world is going. This is where value will be created. And this is how we are going to participate. And a lot of leaders get that wrong. And one other important thing, when it comes to technology specifically, the markets are still forming. So if we go to something like a physical AI, any firm out there will be happy to give you a number of what that market looks like on whatever, pick a year.

7:04There is no real way to make that calculation right now because there are too many variables in flux. So waiting to figure out before you're willing to at least make a leadership decision that this is something we want to explore means you are already behind. Are there examples either from your professional business life where you feel like, oh, okay, here's an example of this being done right. I'm just curious what it looks like in practice. Yeah. So the answer is, sure, there are lots of companies that are good at seeing what's coming. The hard part is taking action on whatever that is. This is the, like, see disruption versus capacity to act.

7:46It's not just capacity to act. It's willingness to take a chance. And it's harder when you're a publicly traded company and you have both a board and the street to answer to, it's not a matter of having the skills to see the future. You then have to translate that back to other parts of the organization who may be incentivized against making any change whatsoever. So it's one thing to tell people, imagine the world of 2031 and where our customers fit in. But if you've never done that before, that's like giving somebody a blank canvas and asking them to come up with a masterpiece. And that's tough for a lot of people.

8:22There's another piece of this, which is if you're in a company where every single thing must be totally buttoned up before it's shown at the leadership. So like that PowerPoint has to be awesome. And, you know, you cannot even think about discussing an initial kernel of an idea. And a lot of organizations are like this. Then again, you're going to have a problem. So psychological safety plays a pretty significant role in organizations that can both see what's coming and take action on it in the present. How do you see the path for organizations to build momentum for change in a way that is empowering?

9:02Yes, I can give you a personal example that has nothing at all to do with business or companies. Great. So I'm a cyclist and I compete in this insane event called Unbound in Kansas. It is a gravel race. It's professionals and amateurs. So I'm obviously an amateur, but pros come in from around the world. And it is tough. There is nobody out there to help you. It is self-supported. So you have to have a way to take this incredibly challenging thing and make it something that's achievable so that when things get tough, you're not ready to throw in the towel and not finish. This year, so I had the course map on my bike computer, but I printed it out and I put it on my bars.

9:43so I saw what the elevations were. My coach and I went through and we had a plan for every segment and where I will be and how many watts to push so I burn out all my matches before the end. And that turned out to be really important because this year it rained so hard that there was so much mud that portions of it you could not ride. Only 10 miles. We just started this thing. We all had to get off of our bikes and hike with our bikes, hoisted up for two and a half miles. And this year, a lot of people didn't finish that race because they were like, what am I doing? I had a plan. So the point of this is there are always going to be uncertainties along the way that you can't control.

10:32And you have a strategy that helps you take action on whatever that is. And then you've got a plan to execute. This is basic stuff in most companies. I don't see it happening often enough at a high enough level. So let's say, okay, you get 90 seconds with the leadership team of a company that thinks it's doing fine, right? The margins are good. There are no obvious threats on the horizon. What is the thing, the unsettling question or sort of the big interrogative moment that you leave them with? Sure. It's actually something I ask executives all the time. what is the one belief about your business that everybody in the company has and believes is permanent?

11:17And what would have to be true for that to be wrong? And it's a really hard question to answer because A, it forces everybody to confront their cherished beliefs about the organization. B, it sets up the idea that the future necessarily will be different from today. and then C, it asks you to come up with some kind of point of view. It's tough to ask that question. And honestly, to keep in your back pocket, what would it take for that to be true is a good question just to have and to ask all the time. Amy Webb, thank you so much for your time. Sure thing. Thank you. So, Robbie, Amy talked about questioning the assumptions your business takes for granted.

12:05it in practice how do you help leadership teams identify those blind spots before they actually become business risks yeah i think one of the most important things is starting out with actually what are the outcomes that we deliver as a business that we care the most about and once a business has really agreed and decided that at the executive and c-suite level it is then really understanding how do we deliver those outcomes what are the business processes we require what are the dependencies what technology what supplies do I rely on what data what people understanding and mapping all of that uncovers vulnerabilities organizations didn't know they had single points of failure they didn't know they had but it also enables them to actually find areas they can improve efficiency and potentially remove duplication so organizations are really now focusing on really understanding interrogating how do I actually operate as a business.

13:04So what does that look like on a day-to-day basis? Are there behaviors or capabilities that an organization needs to sort of embed within itself so that it can be resilient and sort of, I guess, set the business apart from others? I think for me that the first thing is mindset and really starting to think about how do we embed resilience into our decision making so that whenever we're making any kind of decision around whether we're going to go with efficiency resilience yes it might cost more but actually we need to think about the benefit of us being able to adapt and have that redundancy in the organization if I go back to my earlier point I think we've over many years for good reason chosen to take a more lean approach to organizations in driving efficiency as opposed to resilience I don't think we have that luxury anymore but that that mindset that ability to make those decisions from the bottom the organization to the top really has to come from the right tone that resilience is being prioritized over being efficient the other thing i would say is that leadership needs to really set the tone around the fact that our people need to be resilient to be able to respond as well we can have the best plans we can test our plans we can exercise our teams but actually what we've learned from organizations who have gone through really significant crises and disruption.

14:33It's also your people who will manage that crisis and respond. And there's a huge amount of pressure that is put onto them in the months of recovery. I think one of the things that is so interesting in this conversation is the assumptions that people and businesses and organizations carry that may not actually be borne out by evidence. I wonder if there is something that organizations think makes them resilient, but actually would not be the thing that you point at that doesn't actually hold true. I often hear that we've got a crisis management plan. Let's just do another few scenario plans. And actually that gives us the confidence we can be able to respond.

15:18Now, they provide good value, crisis management plans, business continuity plans, but they only go so far. and I think the type of disruption because we're seeing a lot of the risks and threats today conflate a cyber threat conflates that this happens at the same time as a significant weather event or national power outage that happens at the same time as a supply chain disruption that a few years ago we would have laughed at that type of scenario and I think that's absolutely plausible now it's not just going to be about a crisis plan that's going to make you resilient for that you've got to think about your ecosystem because no organisation is an island We all exist in systems.

15:56And actually, the attention and focus on that systems resilience has become even more important now. And you talk about assumptions. Where I have seen gaps and sometimes I get concerned is where organizations or sectors are making assumptions about their own dependencies between each other. And of course, if we're faced with some scenarios like a national power outage or a cyber attack that took out critical national infrastructure, we could be very, very challenged because a lot of assumptions are being made between different organizations, potentially. Bobby, a business leader is listening to our conversation right now.

16:34What would be the top three actions you would recommend immediately to help them be ready for disruption? Yeah. Deciding what is critical because if everything is critical in your business, then nothing will be when you're hit by disruption. Be really clear on the capabilities you need to keep the organization viable, including how does your workforce fit into that as well. I say secondly, really challenge assumptions your organization has made, but the challenges they've made within the broader ecosystem as well. So think about your supply chain. Do we really know who the critical suppliers are?

17:14What if we lost one of our critical technology partners, for example? and then test but test to the point that we're actually trying to potentially break things and actually have a culture where if something goes wrong that is okay we want to understand where we can really improve where we can see those vulnerabilities this is not about promoting a culture where we want to see a green dashboard we want to find where the problems are the gaps are vulnerabilities. And thirdly, I think leaders need to really think differently about resilience now. It is a strategic discussion that has to happen at the executive level.

17:55We have to change, given the disruption and the opportunity that things like AI afford. So think about how that, what that might mean from your business model, your business strategy as well. Bobbi Ramston-Nose, thank you so much for joining us. Thanks very much for having me.

18:16Femi, that was so interesting in terms of just thinking about how a company needs to plan for the unknown and their key business functions going offline. And I guess what this sort of idea of the minimum viable company, which is a thread that runs through what Bobby was saying and also what Amy Webb said in the sort of like, what are you not prepared for? What are you not thinking about? That it requires some degree of just being willing to pivot immediately. There was one quote that kept on jumping out at me. A U.S. famous politician once said, there are unknown unknowns, the ones we don't know, we don't know.

19:04That's resilience, isn't it? That's resilience and disaster preparation, crisis management. The ones we don't know, we don't know. That's Donald Rumsfeld talking about the Iraq war, but it applies here. Oh yeah, absolutely.

19:22That is it for this episode. If we inspired you to think about your business in a new way, please follow Take On Tomorrow wherever you listen to podcasts. And for more, you can visit pwc.com slash take on tomorrow. Next time on Take On Tomorrow, we look at how AI agents are transforming the way businesses operate and people work.

19:45Bobbie Ramsden-Knowles:There's like an entire class of problems that we didn't think we'd get to address, perhaps sometimes in our lifetime that are now possible. because we have these teams of agents at our disposal. Take On Tomorrow is brought to you by PwC. PwC refers to the PwC network and or one or more of its member firms, each of which is a separate legal entity.