2023 trends — adjusting to permacrisis

One year on from the onset of the Ukraine and Rus­sia con­flict last Feb­ru­ary, cri­sis pre­pared­ness has become a strate­gic imper­a­tive for states, soci­eties, and the C‑suite.

Hav­ing wit­nessed ris­ing geoe­co­nom­ic pres­sures across Europe, an ener­gy squeeze, labour and sup­ply chain short­ages, a cost-of-liv­ing cri­sis and extreme weath­er events, busi­ness­es are feel­ing the com­pound­ing effects of con­sec­u­tive dis­rup­tions.

How­ev­er inevitable glob­al shocks may be, many com­pa­nies still find them­selves on the back foot when a cri­sis strikes. Respon­sive risk man­age­ment strate­gies can leave deci­sion-mak­ers under­pre­pared and scram­bling to address emer­gen­cies in iso­la­tion as and when they occur.

As James Wood, secu­ri­ty direc­tor at Inter­na­tion­al SOS puts it: “Organ­i­sa­tions are usu­al­ly very good at being for­ward-lean­ing when it comes to their oper­a­tions and the pur­suit of growth. Giv­en the state of ‘per­ma­cri­sis’ we are con­tend­ing with, the same men­tal­i­ty needs to be adopt­ed when it comes to risk man­age­ment and secu­ri­ty.”

In its 2023 Risk Out­look report, Inter­na­tion­al SOS iden­ti­fies five crit­i­cal risks that lead­ers should be active­ly mit­i­gat­ing over the next 12 months: geopo­lit­i­cal insta­bil­i­ty, dis­in­for­ma­tion, trav­el safe­ty, and cli­mate change all make the short­list for this year’s biggest threats to busi­ness as usu­al.

In the sur­vey of senior risk pro­fes­sion­als car­ried out for Inter­na­tion­al SOS’ Risk Out­look, some 85% of respon­dents agree that the world has become more dan­ger­ous over the past 12 months – the high­est per­cent­age since the com­pa­ny start­ed ask­ing the ques­tion in 2014.

One of the more per­va­sive yet under­ac­knowl­edged chal­lenges raised in the report is the sheer vol­ume of infor­ma­tion in play glob­al­ly that organ­i­sa­tions must assess. Lead­ers need to quick­ly iden­ti­fy, ver­i­fy and cor­rob­o­rate rel­e­vant intel­li­gence and then act on it in mean­ing­ful ways. Some 35% of respon­dents to the Inter­na­tion­al SOS sur­vey believe that dis­in­for­ma­tion could have a mean­ing­ful impact on their organisation’s deci­sion-mak­ing.

Wood notes that wide­spread mis- and dis­in­for­ma­tion around hot-but­ton issues such as Covid-19 and the con­flict in Ukraine car­ried cost­ly and dam­ag­ing con­se­quences for busi­ness­es and their employ­ees in some cas­es. “Regret­tably, many com­pa­nies delayed their deci­sions on evac­u­at­ing staff from Ukraine ahead of the onset of the Rus­sia-Ukrain­ian con­flict on 24^th Feb­ru­ary last year,” he says.

Amid increas­ing geopo­lit­i­cal ten­sions, Inter­na­tion­al SOS issued evac­u­a­tion guid­ance 12 days before the con­flict start­ed. But even with time­ly, accu­rate, trust­ed and action­able intel­li­gence, dis­in­for­ma­tion can cast a shad­ow of doubt over cri­sis response. Wood explains: “Some organ­i­sa­tions put off their deci­sions because they were get­ting dif­fer­ing reports about the like­li­hood of the con­flict esca­lat­ing, and their sys­tems for pro­cess­ing that intel­li­gence and act­ing on it were poor­ly attuned to rapid and deci­sive action.”

To some extent, Covid-19 act­ed as a wake-up call to the C‑suite, alert­ing busi­ness lead­ers to the impor­tance of devel­op­ing func­tion­ing cri­sis man­age­ment struc­tures that enable them to act quick­ly. Wood recalls a multi­na­tion­al telecom­mu­ni­ca­tions com­pa­ny that was caught off guard by the pan­dem­ic and was forced to react to events as they hap­pened rather than get­ting ahead of the sit­u­a­tion.

“After their bad expe­ri­ence with Covid, they start­ed to wor­ry about how they would respond to future crises. They engaged Inter­na­tion­al SOS to con­duct a gap analy­sis of what they did well and what could be improved in their response to the Covid cri­sis,” says Wood. The com­pa­ny used that analy­sis to build a struc­tured emer­gency response plan that it could expand and apply to any cri­sis. “With sub­se­quent emer­gen­cies such as the Rus­sia-Ukraine con­flict, they were far bet­ter placed to mit­i­gate the risks and bet­ter pre­pared to tack­le those sit­u­a­tions,” he says.

Trav­el pos­es anoth­er chal­lenge for busi­ness­es which may have slipped down the agen­da in recent years but is now inch­ing its way back into the spot­light. The com­plex­i­ty of the risk land­scape has spurred a host of atten­dant prob­lems for employ­ers that need to ensure the safe­ty of staff world­wide.

43% of respon­dents sur­veyed in the Inter­na­tion­al SOS report said secu­ri­ty chal­lenges would impact busi­ness trav­el over the com­ing year, with fears of ter­ror­ist inci­dents and vio­lent protests. But Wood believes that the most sig­nif­i­cant issues for trav­ellers are relat­ed to health, acci­dents and dis­eases. He says: “The per­cep­tion is that secu­ri­ty is the biggest threat to busi­ness trav­el, but actu­al­ly, the biggest risks are still per­son­al health and med­ical issues such as get­ting sick after eat­ing local food abroad or road traf­fic acci­dents.”

Mean­while, cli­mate change is also increas­ing health risks. Along­side extreme weath­er events, a hot­ter, wet­ter cli­mate also has the poten­tial to increase the spread of trop­i­cal dis­eases, anoth­er risk area for glob­al busi­ness­es.

Accord­ing to Wood, organ­i­sa­tions need to “plan for the unplannable” to cope with all these sce­nar­ios effec­tive­ly. He advis­es busi­ness­es to run sim­u­la­tion exer­cis­es to pre­pare for cri­sis events. Vir­tu­al train­ing and online exer­cis­es are acces­si­ble and effec­tive for repli­cat­ing a range of cri­sis sce­nar­ios, which allow key deci­sion-mak­ers to take part in real­is­tic emer­gency drills and test the respons­es of man­age­ment and staff in a safe envi­ron­ment.

While per­ma­cri­sis inter­feres with enter­prise strat­e­gy and com­pa­nies’ growth goals, it’s also per­ti­nent to con­sid­er how exter­nal stres­sors impact employ­ees’ men­tal health and well­be­ing. Sur­vey respon­dents to the Risk Out­look high­light­ed the impact that sus­tained glob­al crises have on the men­tal health and pro­duc­tiv­i­ty of staff.

The three most com­mon issues affect­ing the pro­duc­tiv­i­ty of domes­tic employ­ees and remote work­ers were cost-of-liv­ing pres­sures, nat­ur­al dis­as­ters, often linked to the cli­mate cri­sis, and secu­ri­ty threats such as protests, vio­lence and ter­ror­ism.

Some 90% of respon­dents said their organisation’s men­tal health sup­port offer­ings had either increased or remained con­sis­tent in the last year, though lim­its on time and mon­ey are hold­ing back much-need­ed sup­port. The Inter­na­tion­al SOS Risk Out­look 2023 judges that along with exter­nal threats, ris­ing lev­els of men­tal ill health rep­re­sent an invis­i­ble yet very real risk to organ­i­sa­tions.

Cru­cial­ly, com­pa­nies may not have the lux­u­ry of a full recov­ery before the next wave wash­es over and help­ing employ­ees adjust to the ‘new nor­mal’ will be fun­da­men­tal for estab­lish­ing resilience. Wood says: “Busi­ness­es need to keep their radars on, their staff informed, their sys­tems alert and pre­pare for the worst while expect­ing the best.”

For more infor­ma­tion please vis­it internationalsos.com

One year on from the onset of the Ukraine and Russia conflict last February, crisis preparedness has become a strategic imperative for states, societies, and the C-suite.

Having witnessed rising geoeconomic pressures across Europe, an energy squeeze, labour and supply chain shortages, a cost-of-living crisis and extreme weather events, businesses are feeling the compounding effects of consecutive disruptions.

However inevitable global shocks may be, many companies still find themselves on the back foot when a crisis strikes. Responsive risk management strategies can leave decision-makers underprepared and scrambling to address emergencies in isolation as and when they occur.