Making your business more resilient to change

Read time: 5 mins        Added date: 19/01/2024


 Share via LinkedIn  Share via Twitter  Share via Facebook  Share via email

We can’t always predict the future. But by building resilience, businesses can push through adversity and adapt to change. At the same time, there are what we might call ‘sustainability synergies’ to be won.

KPMG says 63% (PDF, 2.9MB) of surveyed organisations have reported performance gains as a result of recent rounds of digital transformation.

Meanwhile, the short and medium-term outlook for business and finance has improved, marginally. In June 2023, the Confederation of British Industry said, “tailwinds to growth have strengthened since our previous forecast in December 2022. The global outlook has improved and wholesale energy prices have fallen.”

It is now forecasting “0.4% growth in GDP over 2023, picking up to 1.8% in 2024, upgraded from -0.4% and 1.6% respectively.“

This is gently encouraging, but not all outlooks are as optimistic. The Institute for Fiscal Studies anticipates “very weak growth in the world's largest economies in 2024, with global GDP growth slowing from an already weak 2.3% in 2023 to just 1.7% in 2024.”

In times like these, resilience is more critical than ever. While it’s not always possible to know where change could lead, you can prepare by strengthening yourself, your workers, and your company’s critical areas.

The issues to consider when building resilience include:

Strong staffing practices

Although an employer’s intention is to create business resilience, it is worrying that workplace stress is common. 

In 2022/23, 875,000 workers suffered from work-related stress, depression and anxiety (PDF, 530KB). In the same period, depression and anxiety accounted for 49% of work-related ill health. 

Creating adequate support for stressed or ‘burnt-out’ employees is a key part of building organisational resilience. You can avoid ‘burn-out’ by monitoring employees closely, offering support and discouraging presenteeism.

Financial resilience

To deal with change, you need to operate with viable financial cushions.

You can add resilience by making sure you have enough cash and working capital reserves. Your cash reserve will depend on your business type and circumstances, but you should probably have a cushion of at least three months.

Encouraging innovation

The portmanteau word “intrapreneurship” is somewhat clunky but it captures an important aspect of business resilience: internal innovation.

By including employees when resolving issues, you can take advantage of insights that come from on-the-ground perspectives.

A culture of inclusiveness among employees may make it easier to bring about changes in everyday practices and, where necessary, organisational reform. Employees will not only be more receptive to change, they are more likely to put it into practice.

Common mistakes when building business resilience include:


Curtailing investment

Amid any sort of change or crisis, businesses instinctively tighten the purse strings. When situations resolve or stabilise, recovery often follows. Despite the ongoing conflict in Ukraine, and the grain and fuel supply chain issues that pertain, the Office for National Statistics reported a 4.1% increase in business investment in the first quarter of 2023, revised from its provisional 3.4% growth estimate.

Financial prudence is a critical building block of business resilience. But at the same time, don’t let automatic parsimony over-rule long-term strategic aspirations.

It’s an important lesson not to curtail ambition in a crisis. Opportunities are out there to be seized.

Business process inertia

Strong businesses often rely on tried and tested methods. There is a danger, however, that established practices get in the way of change. American entrepreneur Salim Ismail characterises the conundrum as a “corporate immune system” which, he writes, “naturally rises out of systems, procedures and employee mindsets. It does its best to keep the system running smoothly by the status quo.”

But he goes on to write that such behaviour also: “stifles innovation and often leads organizations and industries to self-collapse.” 

It can be difficult, in other words, for a business to tell the difference between a threat and an innovative opportunity. Resilience builds in businesses that maintain the strategic, financial and operational flexibility to tell the difference and act accordingly.

Optimism bias

As the cognitive neuroscientist Tali Sharot (PDF,  311 KB) explains: “Inferences about what will occur in the future are critical to decision making, enabling us to prepare our actions so as to avoid harm and gain reward.”

But this vital work is hampered by: “a pervasive bias towards overestimating the likelihood of positive events and underestimating the likelihood of negative events.”

To overcome this, many business leaders deliberately think about worst-case scenarios and keep alive memories of times when things go wrong. This healthy pessimism stops decision-makers from acting on the kind of instinctive optimism that may underestimate costs and risks.

Three quick wins in making business more resilient involve:


Establishing a framework for managing shocks

Common understanding is vital since it creates unity in crisis response. Think about potential upheaval and plan ahead. Generally speaking, you can bucket crises in the following five categories: Financial crisis, personnel crisis, organisational crisis, technological crisis and natural crisis.

Map out supply chains

You are likely familiar with your first tier of suppliers, but perhaps have a less solid grasp of your suppliers’ suppliers even though problems in networks outside your immediate sphere of operation can exert significant influence.

Your suppliers are businesses prone to risk just like you. They can be disrupted, caught up in a scandal over labour practices or lose a key supplier. While these risks can’t be strictly avoided, knowing who and where your suppliers are can help you approach any issues more strategically.

Engaging with networks

Businesses which establish external networks are often more resilient to challenges and shocks because groups tend to be better than individuals at interpreting events and dangers.

In conclusion, business resilience relies on many of the qualities commonly recognised in successful entrepreneurship. You need information, analysis, imagination, collaboration and, perhaps most of all, determination.

Be the Business

Be the Business

We’re working with Be the Business to help businesses across the UK raise productivity through leadership and management improvements and tech adoption.

Find out more about Be the Business

You may also be interested in:

Managing inflation and costs

Support for businesses managing the impact of rising costs and economic factors on trading.

Managing inflation and costs

5 ways SMEs can manage energy price rises

Energy bills are hitting many businesses hard but there are many ways leaders of small and medium-sized businesses (SMEs) can alleviate the pressures.

Managing energy prices

Sustainability hub

Supporting UK businesses transition to low-carbon, sustainable business models and operations to pursue new clean growth opportunities.

Sustainability hub

Important legal information

Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc, Lloyds Bank Corporate Markets plc and Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH.

Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.

Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is a wholly-owned subsidiary of Lloyds Bank Corporate Markets plc. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH has its registered office at Thurn-und-Taxis Platz 6, 60313 Frankfurt, Germany. The company is registered with the Amtsgericht Frankfurt am Main, HRB 111650. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is supervised by the Bundesanstalt für Finanzdienstleistungsaufsicht.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.