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Building the Resilient organization Published: Monday, November 16, 2009 8:00 am By: Ramůn L. Rivera, President & CEO

Once again, hard times and new business challenges are upon us. Is your organization ready? Are you prepared to overcome yet another set of transformations? Is your workforce prepared for organizational changes that may have to be made to respond to contemporary challenges? Resilience, it seems, is the imperative for the 21st century.

The concept of resilience has its genesis in individual psychology and the science of child behavior (Coutu, 2002; Reinmoeller and van Baardwijk, 2005), has been actively taken up in the social-ecological literature (Walker and Salt, 2006), and more recently brought into the business literature (Coutu, 2002; Hamel and Všlikangas, 2003; Reinmoeller and van Baardwijk, 2005). Resilient people are able to deal with trauma in their life (e.g., illness or divorce), to overcome adversity and bounce back. Resilient ecological systems are able to cope with natural disaster (e.g., fire or flood) by recovering. Resilient businesses can deal with shocks (e.g., a market crash or terrorist attack) and survive.

Fletcher, Miller, and Hilbert (2006) offer the following definition for resilience: the capacity of a system to undergo disturbance or perturbation and maintain its defining structure, functions and controls by absorbing the disturbance and reorganizing. Most organizations have the ability to recover from even the most severe crises, especially if they have the benefit of prompt attention to their most basic needs. Drawing on our work and on our own experience working with organizations in the midst of complex changes and major crises, we have developed a set of principles and practices that are crucial to creating organizational resilience.

Leaders are called to articulate purpose, clarity and authenticity in the mist of major change, in order to unleash resilience. It is the role of leadership to ensure that employees have the opportunity to unite around a common meaning that they take out of the loss or shock they experience. Similarly, the leaders of an organization can increase the resilience of the entire workforce by exhibiting empathy, authentic communication, and a commitment to finding Moral Purpose directly linked to the values held by the members of the organization. It is as if the effect of the change acts like a dye suddenly injected into the organization to reveal the interpersonal bonds that make a workplace vital and productive.

Finding Moral Purpose has practical implications as well. Leaders of resilient organizations are able to set clear priorities for the allocation of resources related to disaster relief and business recovery. The leader will work closely with the management team to gathering information about what is needed, by listening to the workforce and by continuing to monitor as recovery proceeds. In a truly resilient organization, therefore, the leader's recovery effort, in other words, is not an impulsive effort to "do good" or make humanitarian gestures, but rather sustained attention to the situation and needs of his people. A leader of a resilient workplace is willing to get advice, but at bottom she will trust her gut and follow her values.

The ability to be flexible in adapting to drastically changed or compromised resources is a key quality of the resilient workplace. Plans for redundancies in communications and infrastructure, as well as provisions for replacement staff are of course built into companies' contingency plans. However, the scope of some changes requires a level of flexibility and innovation on a system level that far exceeds the contingency planning that most companies have developed. In any case, it is important to add that these innovations, adjustments or policy changes should not be offered as a unilateral, benevolent gesture by top management, but that they emerge directly as the result of deliberate, two-way communication between top leadership and all levels of the company. And this is precisely the point: at times of change, loss, uncertainty and threat, people require the sense that they have a voice and that there is a listening, responsive leadership.

An optimal level of redundancy should be achieved by building in business know-how (technical, social and economic). That is, by ensuring that the business system is not overly dependent on any specific device or person. Technical redundancy includes knowledge of how the task of the organization is undertaken (procedures and process maps), maintenance programs to ensure that equipment is properly maintained and won't fail, and contingency planning as preparation for an unforeseen event. Social redundancy includes an understanding of what people are required to do, the knowledge that tasks can be undertaken by multiple people (through cross-skilling), and planning for succession should an individual leave or be promoted. Ensuring that the task of the business is not dependent upon certain individuals provides reliance on the system and not any specific individual/s. Economic redundancy ensures that the business is able to operate in terms of paying immediate bills; that is, having sufficient working capital to keep the business afloat.

Requisite variety requires that the business have a level of complexity that provides flexibility and responsiveness. Technical variety includes having a diversity of products and customers. Reliance on a few, exposes a business should something happen to their product or customer. Social variety refers to the diversity of the workforce and how they are managed. Employee morale is important for having employees willing and able to respond to a disturbance. Economic variety means attending to the financial risk profile of the business. From a Balance Sheet perspective, this means ensuring that the firm is not over extended in terms of debt, having excess stock (that might become obsolete) or insufficient stock where demand for products/services cannot be met.

Building resilience is a determining imperative for 21st century organizations. As business environments become less and less predictable, organizations depend on a contingent mode of planning and management and are in need of taking agile actions to keep themselves afloat and to remain competitive. Instability will continue to be the name of the game. And developing the required strength one by one will be too costly, cumbersome and risky. A systemic approach is mandatory for building resilience as part of the fiber of the organizational culture.     


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