Companies around the world are undergoing “a fundamental reordering of priorities” as they seek to address the new risks and vulnerabilities that have been exposed by the coronavirus pandemic, according to Aon.
That is just one of the findings from the broker’s new Helping Organizations Chart a Course to the New Better report, which was published this morning and presents the findings of research undertaken in conjunction with 10 Work, Travel and Convene Coalitions the broker has helped to establish in major countries and cities around the world.
These coalitions were launched in Chicago in June and are also operating in Australia, Germany, the Netherlands and Singapore, as well as in Dublin, London, Madrid, New York and Tokyo. They were established to examine issues arising from the pandemic and to share key learnings and insights about how to navigate what Aon CEO Greg Case said are three fundamental aspects of society and the economy: working, travelling and convening.
The coalitions have helped set a benchmark for response efforts to the pandemic, and begun to develop best practices for moving forward and to support and accelerate economic recovery.
The study, which discusses how organisations have responded to the Covid-19 outbreak and are adapting to the new environment they find themselves in, as well as how they are preparing for other emerging long-tail exposures, includes responses from more than 100 organisations from across four continents and operating within a broad range of industry sectors.
And of those questioned, Aon found that 67.5 percent of respondents felt that Covid-19 had exposed new risks and vulnerabilities that would require “a significant change in how businesses should think about the future”.
As Aon noted, companies must now work along two distinct dimensions. They must manage current issues relating to the pandemic, while at the same time strengthening their risk management strategy for a complex future by identifying and planning for the various long-tail risks that are on the horizon.
While the pandemic has grabbed the globe’s attention, it has also brought into focus how organisations and society should respond to other long-tail risks such as climate change, cyber threats and the wealth and health gap.
As Aon highlighted, with various forces converging at once, the world is witnessing “a fundamental reordering of priorities on a global scale”.
What the pandemic has also highlighted though, Case noted, is how organisations “are clearly unprepared for most – if not all – of these risks”.
But, as the executive explained, there is an understanding that the situation needs to change.
“Businesses that wanted to go back to the way they operated before the pandemic would clearly not be prepared to tackle the next big threat”
Greg Case, Aon
“The organisations and their leaders with whom we have spoken…have come to understand a key idea: things cannot go back to the way they were.
“And what’s more, to face the perils that could confront them, organisations will need to step up their efforts to prepare for these new risks,” said Case.
Organisations, he said, “will need to prepare themselves for the risks posed by a volatile world and to not settle for a new normal but to instead strive to achieve the new better”.
Reshaping the future
Aon’s study identified four major areas where companies will be able to realise a significant impact.
Addressing the underserved is one of those, and Aon said multiple stakeholders are now coming together to support industries, economies, communities and individuals that were left exposed by the pandemic.
But, as Aon noted, “strategic and targeted solutions must be tested and then scaled for meaningful change to take place”.
“With the right approach, expertise, and level of collaboration, powerful solutions can be found – better serving those communities, businesses, and individuals most in need,” the study said.
“[Organisations] will need to prepare themselves for the risks posed by a volatile world and to not settle for a new normal but to instead strive to achieve the new better”
Greg Case, Aon
Better data and analytics will play a part in that, and help to ensure that high-quality solutions meet the urgent needs that exist both now and in the future, and that these solutions can be delivered across the globe more successfully.
Another key area identified by the study was rethinking access to capital and how in a changing business environment, intellectual property and other intangibles may be the most valuable assets companies own.
“Many organisations have not put in place the tools or strategies to manage intangible assets the way they do their hard assets, but this misses a critical opportunity,” Aon said.
“As the market changes and external forces shape the business environment, companies must turn their attention to innovative, modern ways of thinking about and managing capital,” the broker added.
New forms of volatility
Organisations must also navigate new forms of volatility, Aon said.
They can no longer simply react to the events of this year, but must consider how the confluence of business changes and external factors will shape risk in future.
“Rather than focusing on a return to normal, companies must prepare to navigate new forms of volatility with more innovative solutions,” Aon said.
The fourth key priority is building a more resilient workforce. While there has been a fundamental shift over the past decade in where, how and when work gets done, Covid-19 has accelerated many companies’ moves toward a remote and digital working environment.
In light of that, the study reported that the urgent issue is to build a resilient workforce of employees that is better equipped to adapt to change, manage stress and pressure, and maintain productivity through uncertainty.
Employee wellbeing is one consideration, while increasing the level of diversity within the workplace in terms of background, experience and thinking “is critical”, Aon said.
As Aon highlighted, many of the changes that companies are making have been forced on them, for example creating a virtual office overnight, or rethinking talent management as well as taking a new perspective on risk.
And with infection rates spiking in some geographies around the world and further restrictions and new developments expected to continue throughout next year, the pandemic will continue to force more decision-making.
But Aon said that following on from its study, one thing is certain: “How society works, travels and convenes has permanently changed as a result of the pandemic.”
“The underlying principles that were identified as helping business leaders get through crisis – innovation, speed, risk strategy, collaboration – will be critical for the future. These principles will also be the path forward in achieving the result of the new better.”
Work the highest priority for respondents
As the various regional coalitions met to discuss the crisis, the topic of work quickly became the highest priority for participants, explained Case when considering the findings of the six-month-long study.
“As the meetings progressed, one core understanding emerged: returning to the way things were was not an option.
“Businesses that wanted to go back to the way they operated before the pandemic would clearly not be prepared to tackle the next big threat,” Case said.
“Emerging from these conversations was the clear understanding by organisations that they would need to prepare themselves for the risks posed by a volatile world and to not settle for a new normal but to instead strive to achieve the new better,” the executive said.