Long-term prosperity in business is rare and decreasing. Not least in the food sector where organizations must continually ensure that they adapt to industry trends, and anticipate the ever-changing needs and expectations of consumers to remain successful. Moreover, with 24 hour news competing with entertainment, socially networked consumers are increasingly discerning and well informed.
Savvy food business operators recognize the importance of supply chain transparency and traceability, not only to support product claims but to communicate social responsibility, environmental sustainability initiatives and robust ethical practices in order to succeed. The rise of ‘healthy’, organics, convenience foods, anti-sugar campaigning, consumer concerns about antibiotics, gene edited crops, in addition to a sector talent and skills shortage, present just a few of the challenges confronting today’s food industry.
Food businesses must become ‘resilient’ to ensure lasting success. But what does this really mean in practice?
There have been numerous management papers on how and why food companies should embrace resilience in order to protect themselves from growing business threats. However, ‘Organizational Resilience’ is based upon a much broader view of resilience as a value driver for organizations, enabling them to perform robustly over the long term.
The most resilient food businesses from ‘farm to fork’ are eager to learn from their own and others’ experiences to minimize problems and grasp opportunities. Peer-to-peer networking and knowledge sharing are vital, for example, when they seek to invest in new areas, introduce innovative products and processes or penetrate new and unfamiliar markets.
Here, we look at BSI’s model for Organizational Resilience comprising three fundamental elements:
In this context, ‘product’ refers to whatever product, service or solution a food organization brings to market. Organizations must ask themselves which markets they serve. Do its capabilities and products match those markets’ requirements and comply with their regulatory environment? If not, how can it adapt them? Truly resilient businesses innovate, creating new food products and markets, and differentiating their offering to stay ahead of their competitors.
Embedding industry best practice in developing and marketing products and services is a key component of success. Resilient organizations ensure that they do the basics such as HACCP (Hazard Analysis and Critical Control Points) right consistently through the strength and reliability of their processes, while still leaving scope for innovation and creativity. Business-critical processes in the management of areas such as food safety and quality, environment, health and safety, information security and business continuity must be robust and compliant, both within an organization and also throughout its supply chain.
Resilient organizations seek alignment between customer expectations and employee engagement. Contemporary organizations are inclusive and consultative, not simply dictating rules to be followed, but encouraging employees’ behaviour at all levels to become an integral part of their job and their organization’s food safety and quality culture.
Succession planning is also key to long term prosperity. With an ageing workforce within the food sector, it’s vital that organizations are equipped with the best talent to be able to craft the best food safety and quality culture. Training staff regularly on management systems like ISO 22000, and food safety risk management frameworks such as HACCP can help to embed this food safety and quality culture.
Three business functions, or domains that are critically important in achieving Organizational Resilience in both large and small food companies:
A resilient organization has a full understanding of how it is run and the environment in which it operates. This includes identifying operational improvements across its products / services and processes in order to meet the needs of its customers over time, through to how an organization values its people and governs itself. It requires demonstrable evidence that the organization is not complacent and is always challenging itself to improve performance and grow sustainably, utilising certification and training in food safety management systems such as FSSC 22000 and ISO 22000.
As food supply chain networks increasingly span continents adding greater complexity, transparency and the ability to track and trace ingredients and packaging throughout the entire supply chain is critical. The necessity to identify, quantify and thus mitigate supply chain risks throughout the entire procurement, manufacturing, transportation and sales lifecycle is therefore paramount. Furthermore, product, process and facility verification and unannounced audits of supply chain operators may reveal previously undisclosed outsourced operations, or intermediate processing being undertaken at non-compliant locations. Food businesses must therefore identify and manage all critical risks to minimize disruption to manage operational, financial risks that may cause potentially catastrophic reputational brand damage. A resilient food business can confidently tell their supply chain’s story.
In today’s world, organizations must be trusted to safeguard sensitive information. A resilient organization must manage its information – physical, digital and intellectual property – throughout its lifecycle, from source to destruction. This requires food businesses at all levels to adopt information security-minded practices that still allow stakeholders to gather, store, access and use information securely and effectively.
To stand out and win today, every food business, regardless of its size, sector or location, must develop an approach to resilience that is right for it – underpinned by its values and defining its brand. Whilst the food industry has developed strongly in recent years, with the UK agri-food sector contributing £109 billion or 7.3% to national Gross Value Added in 2014, it’s important that food businesses don’t stand still. Rising raw material costs, skills shortage, food integrity, climate change, currency exposure and political uncertainty in the Eurozone are just some of the challenges that lie ahead that may disrupt global food markets.
Whatever the future holds for the food sector, BSI’s tried and tested approach to Organizational Resilience helps organizations to harness experience, embrace opportunities – and pass the test of time.
Chief Executive of BSI Group
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