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Analysis | The Resilience Industrial Complex deviates from reality

Remark

Our Neanderthal ancestors had a sixth sense for saber-toothed cats. Their bodies developed sophisticated fight-or-flight signals. They made spears for hunting and self-defense and passed on their genes to spread the species.

Today there is an entire industrial complex focused on the resilience that used to be instinctive. There are countless books and blogs to help parents raise kids who can take a beating. From the Mayo Clinic to LinkedIn, there’s a plethora of advice on how to recover from challenges — or “bounce ahead,” in the language of management consultants. McKinsey & Co. and the World Economic Forum are teaming up to help CEOs survive “a fragmenting world order.”

One of the UK government’s last acts before Christmas was the announcement of a UK Resilience Academy, as part of a new 64-page strategy paper on, yes, national resilience. The Resilience Framework includes a new Head of Resilience, an annual statement to parliament on risk and resilience performance, expert advisory groups, local resilience forums and public surveys to ensure perception reflects effort. Its purpose is to “anticipate, assess, prevent, mitigate, respond to and recover from known, unknown, direct indirect and emerging civil contingencies.”

It would be crass to dismiss these efforts as performative or useless in a world with greater risks than saber teeth. You want your company’s cyber defenses to withstand the latest ransomware attack. You want pilots trained to handle wild weather and kids who aren’t so protected against failure that they collapse at the first sign of a B-class. You want your government to be ready for floods, wars and disasters.

But the problem with the Resilience Industrial Complex is that, like many buzzwords (“sustainability” is another one that comes to mind), it has become a label that can be attached to almost anything. Resilience is not about bolt-ons, but about real trade-offs that are too often hidden from view.

On paper, the UK is next level when it comes to resilience planning. It has a Net Zero Strategy and an Energy Security Strategy. There is a Supply Chain Resilience Framework and a National Security Risk Assessment (NSRA) tool. There is a National Exercise Program (NEP) to test emergency procedures. The Treasury maintains an Orange Book to assist the government in managing technological, economic, legal and other risks. There is an Integrated Review to address state threats in an interconnected world. Scotland has its own resilience centre. For those wanting to delve into resilience planning, the government maintains a National Risk Register that maps the probability of a risk relative to the likely damage.

Astute observers will note that even with such wall-to-wall resilience strategies have been missed. In the 2020 risk register, industrial actions and volcanic eruptions were considered more likely than a pandemic. There was indeed a pandemic plan: four years before Covid-19 arrived, the UK government was advised to stockpile personal protective equipment and set up a contact tracing system to activate in the event of a coronavirus outbreak. But the plan provided a flu-like bug, not something more deadly, and the government decided that those resources would be better spent elsewhere.

Misjudging risks happens more often than we think. The 2021 integrated defense and foreign policy review, with its “Indo-Pacific tilt,” is now being rewritten in light of Vladimir Putin’s invasion of Ukraine. And even with foresight, governments don’t always act. A committee in the House of Lords – another arrow in the UK’s resilience – warned eight months before the withdrawal from Afghanistan that US policies would have disastrous consequences for the country.

The most resilient companies have the leadership and financial health to tip over if necessary. If they have resilience strategies in place (and all large companies have them), there are regular audits of the plans as well. Of course, there’s an entire industry that tells CEOs exactly how to do that. McKinsey’s output on this topic is a resilience test in itself. Sure, high performers apply “agile” processes and practice “intentional composure”. But especially the daily things they do very well. Governments should do the same.

The ultimate planners are the Swiss, with their nuclear bunkers complete with composting toilets. (That seems somehow less eccentric these days.) But government resilience planning is primarily a political choice. It involves the allocation of precious resources, including attention. Unfortunately, the political rewards of averting a potential crisis are often negligible, so attention is often lacking. Without high-level accountability and regular audits, political or bureaucratic inertia tends to trump such plans.

The new UK framework suggests a serious effort, but not necessarily a sense of urgency. The government will make communication about risks “more relevant and easily accessible” by – wait for it – 2030. No senior cabinet official has been appointed. Only in 2025 will the government “clarify rules and responsibility” for each risk and “present an annual statement to parliament,” the document said. If Prime Minister Rishi Sunak wants to take ownership of the strategy, he must put his imprimatur on it.

However, real resilience comes from a good foundation. South Africa’s daily blackouts are not a lack of resilience planning; they are the result of appalling levels of mismanagement. The crisis in Britain’s emergency services is partly a result of the ill-funded social care system not recovering.

Likewise, the biggest threats facing Britain are in plain sight: weak economic growth, low savings and investment rates, unreliable public services and regional disparities fueling resentment. It is wise to plan for future emergencies. But a grand strategy can all too often create a false sense of security and the false impression that the greatest threats are far away.

More from Bloomberg’s opinion:

• Why I prefer the UK pension over France: Merryn Somerset Webb

• Burberry and Cartier need Chinese customers to spend money: Andrea Felsted

• Jacinda Ardern gives the world a lesson in humility: Andreea Papuc

This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.

Therese Raphael is a columnist for Bloomberg Opinion on healthcare and UK politics. She was formerly editor-in-chief of the Wall Street Journal Europe.

More stories like this are available at bloomberg.com/opinion

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