Are Disruptions now Business as Usual?

External shocks are rippling through the Australian economy. There is a rapidly changing landscape of community expectations for public sector and business leaders. This is leading to significant pressures on Governments to deliver increased levels of assistance and intervention. Community and businesses are demanding that Governments shield them from the impacts of these shocks.

While some external shocks (or disruptions) are going to be completely unexpected, there are clearly some events that are far more predictable over medium to longer time horizons. Natural disasters, cyber-attacks, workforce issues, and supply chain disruptions are clear examples.

In particular, the recent COVID-19 pandemic response involved wide ranging changes to Government policies, and new legislation. Many Australian organisations needed to abandon long running operational assumptions, and adapt to rapidly changing compliance requirements .

This had some positive long running benefits in areas where Australian organisations had been laggards, such as the adoption of remote working, digital customer self-service, and contactless service delivery. In many cases, new ways of working and “temporary measures” have now become customer expectations.

While some sections of Government, such as emergency services and health services, have few roles suitable for remote work, most organisations are now in a position to be far more strategic in their use of hybrid work practices.

Workforce expectations have also shifted. Remote work is now routinely embedded into ways of working, and workforce preferences for remote and hybrid work are clear. Organisations that attempt to enforce 100% in-office working are now likely to run into problems, such as higher rates of workforce attrition and absenteeism, difficulties with recruitment, and lower levels of overall performance.

Developing workforce capabilities

Over the last twenty years, Australia has seen a rapid long-term increase in the proportion of the Australian population who are older than the official retirement age. The Australian economy depends upon imported labour, and has done so for many years.

Disruptions to travel arrangements in recent years have coincided with huge backlogs in Visa processing within Australia’s skilled migrant program, as well as a reduction in International student numbers within Australia.

The net result has been a very large drop in workforce supply for some specialist and trade qualified skills. Organisations that have workforce retention issues, or focus on recruitment rather than building workforce capacity, have already been particularly impacted.

There is little prospect of a change in this workforce situation over the next few years. As a result, a focus on developing the skills and capability of an organisation’s existing workforce will be critical in the years ahead.

Growing stronger from disruptions

Risk management and scenario planning are important preparations to quickly detect and respond to any disruption. Putting in place effective performance measures that are linked to risk controls can provide a valuable early warning.

When a disruption occurs, it is important to rapidly take stock of the situation, start from those initial prepared mitigation plans, then stabilise operations, and rapidly adapt plans to the circumstances at hand.

It is useful to consider the following:

  • What is the magnitude or severity of the disruption?
  • Is it transient or ongoing? Localised, regional, or widespread?
  • Have enterprise risks shifted? Are controls still adequate?
  • Should the Business Continuity Plan be activated?
  • What are the opportunities and threats created by the new situation?
  • Is the organisation’s current operational plan still achievable / relevant?
  • What should we stop / start / continue?

When the disruption is likely to last over a longer time horizon, leaders might need to undertake a broader series of steps to respond, and consider:

  • Is this the new normal?
  • Which strategic goals are still achievable?
  • Should we recalibrate our KPIs?
  • Do we have the right operating model / structure?
  • Are we able to adapt if a further shock occurs?

At the end of the disruption, a simple return back to business as usual could be a missed opportunity. It is worth considering at that point how to overhaul business as usual, and further improve an organisation’s ability to respond to subsequent disruptions. This could include a re-evaluation of products and services, and consideration of opportunities to rationalise, streamline, and further automate core operations.