In today’s business context, organizations are faced with an increased level of pressure from the external environment due to rapidly changing business circumstances. The competition intensifies each day and there is increased occurrence of crisis and disaster situations. Organizational resilience reaches beyond risk management and business continuity towards a more holistic view of business health and success. A resilient organization is Darwinian, in the sense that it adapts to a changing environment in order to remain fit for purpose over the long term. It is also one that learns from its own and others’ experiences in order to pass the test of time.
Organizations which are capable of surviving over time in the face of current and future challenges are referred to as ‘resilient organizations’. The concept of resilience within organizations may offer a potential framework to overcome breakdowns, disturbances, and discontinuities and allow for organizational development. Resilient organizations are essential as they contribute towards the on-going viability of the economy and the wider community: a crucial step towards creating a society which is resilient itself.
As all organizations face unique risk landscapes, resilience is seen as both an outcome and a fundamental part of the governance of an organization. The resilience of an organization is, therefore, made up of the contribution of a wide range of different principles. Moreover, organizational resilience is not a one-off program or a management system that can be developed and then reviewed annually or as required. It is an approach that takes time to develop and as indicated in this article, is not ‘one size fits all’, but can be outlined in a process model.
Most organizations are already good at working with routines. Indeed, managers have been trained to focus on efficiency, so they’re naturally inclined to codify best practices into organizational routines. Here are some suggestions for getting started:
Analyze which tools you use to get different chunks of work done.
The point isn’t to do fine-grained process mapping—it’s to think at a high level about how you handle work. Such an analysis isn’t necessarily straightforward, though, because most work gets broken down into parts that may call for different tools. If you do A/B testing on new product features, for example, you almost certainly have a rigorous organizational routine in place—whereas decisions about what to test may be more open-ended and improvisational. Do your best to build a picture of which approaches are used where, and whether your organization favors a particular one. Then think about whether it’s the best choice for most of those tasks. You’ll manage a crisis better if you’ve analyzed and discussed your processes—and done at least some reinvention—before you’re in the thick of things.
Organizations that deal with fast-evolving situations—think SWAT teams—know that it pays to practice and prepare for the unexpected.
Question the assumptions behind your routines.
Every routine and process is built on a significant number of assumptions. Spend some time figuring out what they are, at least for your key routines, and then think about how you’d operate if they didn’t hold. These questions will help:
- What types of decisions do you assume must be handled by high-level managers? How do you envision those decisions being made in a crisis?
- Do you assume that your existing processes have been revised and perfected over time—that they’re optimal? Will they hold up in times of duress?
- Where in the flow of work do problems consistently arise? Is there an argument for reshaping that segment or allocating more resources to it? What would happen if you suddenly had to get that chunk of work done much faster?
- Do you assume that organizational resources are allocated well? Would you reapportion them if you suddenly had to respond to a major disruption?
Practice doing more with less.
We can’t think of any actual crisis that didn’t involve resource scarcity of some kind. The Everest climb certainly did. So it makes sense to get used to working lean. Managers can challenge a unit by asking it to achieve an ambitious goal with significantly fewer resources than normal, for example. Or a team can brainstorm about how it would respond if a key resource suddenly became scarce.
Deepen your knowledge of how your work fits into the whole.
Organizations tend to ask people to specialize, sticking to narrow tasks or activities. It’s efficient, and it fits well with scripted organizational routines. In uncertain times, though, deeper knowledge of how other areas function (perhaps gained through cross-training) makes a group more resilient. Team members develop a better idea of how their work depends on others’ work, and vice versa. As a result, when a routine is changed, the larger group’s work is less likely to be disrupted.
Invest in building expertise.
New heuristics and improvisations may appear spontaneous, but in reality they work best when they rest on a foundation of knowledge and training. The mountain climbers in our study trained much harder than those on other expeditions we have data on, and they did it in the belief that they’d be better prepared to adjust when they needed to.
Identify your priorities.
If a crisis is unfolding, red lights and alarms go off everywhere, and managerial attention becomes a very scarce resource. In such situations leaders need to hyperfocus on the metrics that are central to moving the organization through the turmoil. By doing so, they can help everyone tackle the most-pressing problems and concentrate on the activities that are essential to avoiding a collapse; everything else will simply have to wait. This often requires tough trade-offs. The metrics won’t be the same in every situation, however, so it’s useful to imagine a variety of scenarios and think through what they might specifically require.
Learn to give up control.
In a crisis, solutions are not obvious and seldom come from a top-down approach. All organizational brains are needed to solve problems on the spot. If those brains don’t feel empowered to act immediately, a problem can quickly get worse. This goes beyond the traditional advice about empowerment, which says that people should be given limited freedom to make decisions in their area. Organizations that survive dangerous times have developed the ability to swiftly delegate authority and decision-making to people with expertise on the front lines.
In 1994, Jim Collins and Jerry Porras published their book ‘Built to Last’. This is a philosophical blueprint based on research into the development of some of the United States’ most successful corporations.
Recognizing struggling competitors whose businesses disappear after a period of time, Collins and Porras focus their research on eighteen bona fide ‘visionary’ companies and analyze them in accordance with guidelines they’ve set on what makes a good company.
Visionary companies are premier institutions, the crown jewels, in their industries, widely admired by their peers and have a long track record of making a significant impact on the world around them.
In the face of sociological events, Porras and Collins wanted to answer the question “What makes the truly exceptional companies different from the other companies?” with an emphasis on timeless management principles.
The eleven most important findings of the Porras and Collins research are depicted below. These characteristics are the main outcomes of organizational resilience that allow visionary organizations to last over time.
Clock building, not time telling Porras and Collins liken the longevity of a company to time telling and clock building. According to the authors, time telling is “having a great idea or being a charismatic visionary leader” and clock building is “building a company that can prosper far beyond the presence of any single leader and through multiple product life cycles.”
More than profits According to the authors, companies must preserve their core ideology while allowing room for the manifestations of the core ideologies to change. This means product lines, profit strategies, cultural tactics, and organizational structure can change – but a core ideology should not.
No ‘Tyranny of the or’ Porras and Collins make reference to their use of the yin/yang symbol from Chinese philosophy in order to explain the visionary mentality of not “oppressing themselves to the tyranny of the OR” – which means hell for those that cannot live with two contradictory ideas at the same time. According to the authors, inferior companies hold proclamations such as – “you can invest for the future or do well in the short-term” and “you can have low cost or high quality.” This limits companies to a short-minded frame of reference where there is only one choice, but not both. The authors ask readers to embrace both extremes and to figure out a way to have both choices. Visionary companies find ways to do well in the short-term and long-term, rather than sacrifice one for the other. They don’t look for a balance – rather, acquiring both to the max.
Preserve the core/stimulate progress This describes the ways companies should do business by being able to adapt and change over time in response to market conditions. Over time, competencies, strategies, and goals change but the core ideology must remain intact.
Big hairy audacious goals (BHAG) Taking risks and “setting super goals” is a hallmark of success. Porras and Collins discuss Boeing’s pursuit of the commercial airline market in the 1950s, which was underdeveloped and needed a major player for jet aircraft. Unlike its rival Douglas Aircraft, who avoided entering the commercial market, Boeing took a gamble and developed a prototype for the commercial airliners used today.
Cult-like cultures Visionary companies are not a great place to work for everyone. All employees within a visionary company must adapt and embrace the core values assigned to them in order for the organization to make strides. According to the authors, visionary companies require employees to seek accomplishment and to follow the core ideology. The authors outline four common characteristics of cults that apply to the visionary organizational philosophy – fervently held ideology, indoctrination, tightness of fit, and elitism.
Try a lot of stuff and keep what works Porras’ and Collins’ show that in visionary companies trial and error, accidents, and opportunism were ahead of detailed strategic planning. The authors describe opportunistic experimentation through trial and error as a way to make evolutionary progress. According to Porras and Collins, five ways to make evolutionary progress include:
- Giving ideas a quick try
- Accept mistakes
- Taking small steps to achieve small failures in order to get ahead
- Building a ‘ticking clock’ to turn the aforementioned points into a process.
Home grown management Porras and Collins describe a characteristic of visionary companies as likely to hire inside employees to high positions as opposed to other organizations that “hire from the outside.” This allowed for consistent excellence in leadership from within the ranks, from employees who have adhered to the company’s core ideology. In the overall picture, this is a way for companies to preserve the core while stimulating progress.
Good enough never is Porras and Collins reject the idea of a ‘finish line’ and define a visionary company as one that is never satisfied with its results. All visionary companies hold high standards and reject the practices of comparison companies that make money off successful products. Porras and Collins stress investing for the future and adapting to newer ideas and technology earlier than others.
The end of the beginning Porras and Collins use the “end of the beginning” concept to explain how visionary companies translate their core ideologies into the everyday workings of the organization. Core ideology is translated into the strategies, behaviors, business practices, and goals of the organization.
Building the vision “Building the vision” is a rearrangement of values intended to stimulate progress. It asks potential visionary organizations to strive for self-improvement day in and day out and to invest in new technologies and new management methods to take risks instead of lying back and remaining conservative. An eye should always be kept for the long term instead of the short term, even when it is hard to do so.
In conclusion, a resilient organization should be able to absorb disturbances or stresses through resistance or adaptation; maintain its basic services during a disturbance, and; ‘bounce back after such a disturbance. Organizational resilience is not like establishing and implementing a specific management system. Organizational resilience is the outcome of a set of organizational characteristics that allow organizations to last over time.
Resilience is the “organization’s capability to dynamically reinvent its business model as circumstances change.”
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