Companies are failing to develop resilience and manage the risks of a changing environment as they face unprecedented levels of disruption.
The resilience score of G20 companies is only 40 points, out of a top score of 100 points, according to the FTI’s inaugural Resilience Barometer report. The resilience score assessed the level of preparedness against 18 possible scenarios most likely to have a negative impact on turnover.
The study revealed this lack of preparedness has cost a staggering USD$81.6 billion, exclusive to the firms involved in the research.
Moreover, it found that the biggest threat to resilience in 2019 is that of cyberattacks stealing or compromising assets, with 30% of companies surveyed saying this had happened to them in 2018. Yet while 28% of business leaders predict that this will occur to them over the next year, just 45% say that they are taking proactive steps to manage this risk. Meanwhile, the usage of artificial intelligence (AI) and analytics to detect threats and trends were found to accompany high resilience scores.
The research also suggested firms face a constant challenge to remain competitive in an ever-changing landscape, with one-third claiming their firms are in the middle of transforming their business. Of those surveyed, 45% said they are transforming to reduce costs, while 44% said they are trying to leverage technological advancements. Additionally, 48% claim a comprehensive communication strategy is key in driving a successful business transformation.
The research was conducted online by FTI Consulting’s Strategy Consulting Research team with 2,248 leaders in large companies across the G20 countries. Companies researched represent a sum turnover of USD$1.6 trillion.