Aerospace Resilience in Focus
Even before the full ramifications of the coronavirus were evident, BSI research showed that aerospace leaders’ confidence in the resilience of their organizations had faltered for the first time since 2017. Brendon Hill, Global Head of Aerospace at BSI, explains.
Towards the end of 2019, BSI published its annual Organizational Resilience Index, the third such survey of business leaders worldwide. The study could hardly have been more timely, coming just a few weeks ahead of the COVID-19 pandemic, as it highlights key challenges that influence the long-term ability of an organization to survive, thrive and prosper.
The Organizational Resilience Index provides a powerful, data-driven insight into what 805 global company bosses see as their own business’s strengths and weaknesses.
The Index finds that, across all sectors, Innovation, Horizon Scanning and Adaptive Capacity have the greatest impact on Organizational Resilience, but that relative performance in these areas has declined over the last 12 months.
Overall, it also reveals that business leaders are struggling to adapt to the introduction of new technology amid political and economic uncertainty. Those surveyed in the report identify technology as both the greatest opportunity and the most severe threat to their success.
Now, of course, the further impact of COVID-19 threatens some sobering outcomes for a number of sectors, with the aerospace industry among the hardest hit.
Every part of the sector has been affected by the pandemic, from grounded aircraft and closed airports to suspended assembly lines and laid-off workers. Such damaging impacts are reverberating right across the world, and it’s not just manufacturers, operators and their passengers that are losing out on business, but a myriad of companies in the sector, from maintenance and repair organizations to caterers. In this previously fast-expanding industry, many suppliers face a cashflow crisis, having geared up to increase production but now finding they suddenly need to apply the brakes. Operators similarly have huge infrastructure and resources (aircraft, people) to support and with drastic reductions in flights and income, these too are struggling to survive.
Disrupted supply lines, plant closures, falling passenger numbers, and a reduced cashflow are very different business challenges for aerospace leaders, highlighting the constant need for them to question how resilient their organizations really are.
Alongside their ability to manage and mitigate such serious and varied risks, the aspiration to achieve organizational resilience will strengthen their ability to grasp opportunities – because even in the worst crisis, opportunities can arise. For example, Heathrow, Europe’s largest passenger airport, may have seen a precipitous drop in passenger flights and numbers during the worldwide travel lockdown, but it also seized the chance to mitigate the downside through a fivefold increase in flights dedicated to freight. Likewise, business aviation has grown 400% in some areas.
BSI’s Organizational Resilience Index
BSI’s Organizational Resilience Index can provide deeper insight by indicating the aerospace industry’s performance in the key aspects of resilience, and then by highlighting the impact of these aspects on the sector.
Aerospace leaders’ responses have enabled BSI to benchmark the resilience of their organization through their perceived performance in – and the impact of – 16 core elements of their business, ranging from Financial Aspects to levels of Community Engagement.
Note that this is a ‘relative’ study. Leaders may well think all 16 core elements have an impact on their business, but they do not see them as having an equal impact and have ranked them accordingly. Similarly, they perceive variations in performance between the 16 elements, again resulting in a ranking.
Using the rankings, we can gauge organizations’ resilience in two ways: first and most obviously, by seeing where they perform relatively well; second, and perhaps more significantly, by focusing on how well they perform in the elements that have most impact on their business.
Top five resilience ranking for Aerospace
43 of the 805 organizations surveyed identified their area of operations as in the aerospace industry
In the aerospace sector, organizations regard their best performance to be in Horizon Scanning, and this is also a top quartile factor in terms of its impact. This is not to suggest that aerospace leaders – or leaders in any industry – could have predicted the timing or scale of the current COVID-19 pandemic, but simply that they recognize the importance of early detection of risks and opportunities.
At the same time, the current crisis is severely testing aerospace organizations’ Leadership and Adaptive Capacity, and BSI’s Index shows it is these elements that have the most impact in maintaining Organizational Resilience in the sector.
Prior to the pandemic, the Index suggests that an increase in the disruptive effects of technology, alongside changes to government policies and regulation, were the driving force behind the Adaptive Capacity agenda.
Where are your strengths and weaknesses?
It falls to boards and individual leaders to build organizational resilience at both a strategic and operational level. There are tools to help, from industry-specific standards in aerospace to broader certifications for disciplines such as business continuity management and information security management, as well for Organizational Resilience itself.
To find out your organization’s relative strengths and weaknesses – and how you compare with the organizations behind the BSI Organizational Resilience Index – complete the BSI Organizational Resilience Benchmark tool, a simple questionnaire located online at www.bsigroup.com/organizational-resilience.
This tool will present your results in a spider diagram. It will allow you to compare how you perceive your performance in the 16 core elements against the overall benchmark results.
If, in light of your results, you want to investigate further through a more comprehensive comparison against others in the survey, please contact us at Organizational-Resilience@bsigroup.com.