how to build organisational resilience — The Breakthrough Transformation People

Resilience: the ability of a substance or object to spring back into shape (Oxford English Dictionary)

Over the last few years, we’ve had to draw on tremendous reserves of resilience that some of us didn’t realise we had. We’ve had to bend in the wind, not let ourselves get uprooted by the incoming gales. It’s been tough, and has set a new bar for the term VUCA (Volatility, Uncertainty, Complexity and Ambiguity). Some of us were better prepared than others, so what is it that organisations can do to build resilience into their structure and their culture? The most resilient organisations not only cope better with a short-term crisis, they build the anticipation, adaptability and agility to stay ahead of their competitors in the longer term.

The characteristics of resilient firms sit within three interlinked categories: Being, Doing and Learning. See Fig 1

Fig 1: What makes a resilient organisation?

Being

With a clear purpose and sense of direction, it’s far easier to make decisions and to know how to both respond to immediate situations and plan for future scenarios. It’s like having a compass in a storm. When the purpose is unclear, you can frequently find yourself rocking up and down on the waves, unsure which direction to take. For example, knowing whether your value proposition is designed for operational excellence or customer intimacy, will guide the strategic direction you must take. But it will only do this, if your strategic direction is clearly articulated and cascaded throughout the organisation.

An empowered workforce, with the skills, belief and desire to take ownership of your strategic direction and solve problems on the ground will spread resilience throughout the organisation. A clever plan which originates in the Board room is liable to fizzle out when it’s sent out into the workforce. We often work with our clients on breakthrough transformation programs to help them create freedom within a framework for their employees, embedding new ways of working to encourage ownership and action. A boat moves more quickly if everyone is rowing with the right level of speed and skill.

An organisation needs to encourage imagination and innovation throughout its workforce, building problem solving, mastery and autonomy into the everyday. To move quickly – and bend with the wind – your people need to feel confident expressing their opinions, connecting with others to develop solutions, and taking calculated risks. This links back to the freedom in a framework. Often the best ideas for innovation come from those closest to the issue: with the right balance of autonomy and guidance your teams can move with greater power, speed, and efficiency, helping new ideas to gain traction.

Doing

It’s a self-evident fact that the most resilient organisations have a healthy balance sheet that enables them to invest in new ideas to get ahead, and provide a buffer when needed to weather the storm. To confidently reach this level of financial maturity, you need to build on the success of your empowered teams, bringing innovative ideas to challenge waste and remove bad cost from the system. Then, guided by your clear purpose and strategic direction, you will be able to decide where best to invest your available funds.

IT can be an enabler or a blocker. To be resilient, you’ll need agile, adaptable, modular IT systems with the ability to bolt on new functionality. Older IT systems tend to have been customised over many years, making it harder to integrate information, to activate the new data flows you require and to aid collaboration. If your IT is not synonymous with the words ‘convenience’ and ‘agility’ then you may need to consider a rethink. In addition, with the exponential rise of AI, there are new tools appearing almost daily to help with the repetitive/mundane tasks. Without an eye on what’s developing around you, your resilience will be battered by becoming obsolete and slow in relation to your competitors.

The right data will help you monitor, predict and prevent. We’ve experienced a data explosion in the last few years, which is only helpful if your data is usable and accessible. A clear data strategy will help you to understand what data is required for what decision making. Clear data ownership and data flows though the organisation will ensure that you reap the rewards of having quality data at your fingertips enabling quick and informed decisions. Sadly, organisations are often held back due to the quality and availability of their data.

A diverse portfolio of products and/or clients helps you to spread the risk and reduce the ups and downs – that old adage, ‘don’t have all your eggs in one basket’ is very appropriate. Keep looking ahead to spot the trends, opportunities and weaknesses before they become insurmountable.

None of us operate in a vacuum so it’s important that we invest in our networks, whether that’s networks of suppliers, clients or employees. The better you treat your networks, the more forgiving they will be if the need arises. And, the more they are likely to collaborate with you to innovate for the longer-term.

Learning

How can you improve if you don’t know how you did? How can you know how well you did, if you didn’t agree on what success looks like? It’s important to have a clear set of performance measures directly linked to your strategic objectives so you can measure progress and course correct as required. Without firm foundations and control over your direction, you’re more likely to buckle in the storm than bend. Of course, this links back to the need for good quality, accessible data, a clear purpose and an empowered workforce who know what to do as a result of the KPIs they are measuring. A balanced set of measures would include both lead and lag measures so you can review not just how you did, but predict how you are likely to do.

Sustainability measures should be embedded into your performance measures. Your survival depends on the survival of the ecosystem around you. Resilience is a team effort. As we discussed in an earlier article, companies with high ratings for ESG performance achieve higher operating margins than those of lower ESG performance. Not only do you help to safeguard your ecosystem, you build a healthier balance sheet – one of the key contributors to a resilient organisation.

Taking the time to understand lessons learned from major projects/events/crises/successes will help you to continuously improve and adapt. Too often, we move straight onto the next major initiative without investing time to really understand what helped and what hindered the last initiative. Be more tortoise and less hare.

Authentic leadership

At the heart of a resilient organisation lies authentic leadership. We find that courage, care and curiosity are the three standout ingredients for a leadership style that sets a climate of trust, openness and performance. Leaders who have the courage to take a stand, who care about the impact they have and are curious to learn from others create followership. Followers are critical thinkers, engaged and empowered to follow their leaders not because they have to, but because they want to. A leader on their own may buckle, a leader in a network of leaders and followers is more likely to bend, not buckle.