Seventy-five percent of organisations must adapt to survive “seismic shifts” in the market, finds resilience study
Over 75% of companies need to fundamentally change their business models as a result of the COVID-19 pandemic and subsequent economic fallout, according to the Resilience Barometer COVID-19 Report from FTI Consulting.
Companies will need to reassess strategic actions like mergers and acquisitions as well as the integrity of supply chains, which three-quarters of respondents believe have been permanently disrupted.
“If companies do not change themselves, seismic shifts in the market will do it for them,” said Kevin Hewitt, chairman of the Europe, Middle East and Africa region at FTI Consulting. “Longstanding assumptions are being questioned, and the answers will impact employees and consumers alike. One such lesson will be ensuring that businesses are better prepared to respond to future escalations and are not caught unaware.”
Known and unknown unknowns
Out of more than 2,000 large companies across G-20 nations surveyed, 90% are placing greater emphasis on planning for unknown risks, which means concentrating on business fundamentals such as staying operational and financially viable in the face of future crises.
As a result, 78% of companies now use artificial intelligence and analytics to monitor for scenarios that impact risk and compliance.
The pandemic’s unexpected onset significantly impacted business resilience, with 60% of companies surveyed saying they are facing challenges servicing their debt requirements, and companies are seeing an average revenue decline of 10% and headcount decline of 12%.
“COVID-19 has shattered preconceptions about what a resilient company or economy looks like,” said Caroline Das-Monfrais, senior managing director and global resilience lead at FTI Consulting.
“From debt servicing to cyber threats, businesses have never faced so many compound crises occurring at once. If 2020 has taught businesses anything, it is that those businesses that invest in resilience will be well placed to succeed when we emerge on the other side.”
More than three-quarters (78%) of companies surveyed believe they must fundamentally reevaluate their business models as a result of the pandemic. Doing so often involves making difficult decisions — a fact illustrated by three in 10 companies surveyed across G-20 nations requiring restructuring or refinancing due to COVID-19’s impacts.