Last week I had the opportunity to participate in the first ever Leading Organizational Resilience development program at Cranfield University. I did not quite know what to expect but as the topic is relatively new and definitely one of my favourites when it comes to making people and organisations shine, I decided to give it a chance. And the world has not been the same since. Here is a summary of some of my learnings, which I would like to share with you.
Why the Fuss about Resilience
The Economist Intelligence Unit (EIU) is a world class research organization that has surveyed over 400 business executives worldwide on resilience. The results show that 88% of the respondents believe resilience is a priority for their organizations and a pre-requisite for long-term growth (80%). However, over 70% do not see resilience practices embedded in their organizations. The link to long-term growth is self-explanatory. After all, resilience is all about anticipating, responding and adapting to all kinds of changes and sudden disruptions and nevertheless, thriving. Or as BSI puts it: ”Resilience is not what happens to an organization; it is what the organization does with what happens to it”. And a lot happens, as the illuminating quote from Hamel and Välikangas highlights:
”…Every business is successful until it’s not. What’s amazing is how often top management is surprised when ’not’ happens…” – G.Hamel & L.Välikangas
Business continuity, risk management, organizational governance etc. are all important elements for planning and preventative purposes. However, it is not enough for highly resilient organizations. In order to be ”future-ready” one needs adaptive resilience, the capability to cope with events that cannot be anticipated. It is about sensing changes in the business environment, grasping the implications of those changes and being agile and strategic in one’s response. My learning #1: organizational resilience can be improved.
What Is the Problem We Are Trying to Solve
In our pursuit of being efficient and effective – a core value in our society -, we tend to jump into solutions and solve only symptoms, not root causes or true problems. By solving only the symptoms we will make sure that we crash-land sooner or later. The notorious examples of Texas City Refinery explosion in 2005 and five years later the Deepwater Horizon Oil Spill in the Gulf of Mexico highlight the point. Numerous technical improvements were made after the first disaster, but the ability to address the systemic issues lead to another catastrophe only a few years later. A current day example is the financial sector: money laundering is being treated with ever tightening controls and compliance procedures but the root cause of illegal activities is being untouched…and one bank after another faces a minimum of reputational loss not to mention sanctions and falling stock prices. Or the example of caring for elderly, where it is evident that longer life expectancy will mean poorer health, more need for care and increasing cost. Instead of tackling the real problem, we take measures to put in more controls, re-organize the responsibilities etc. I am not saying controls do not work, instead I am saying that it is not always enough and thus, we need to find out the real issues. Even Einstein suggests focusing on the problem. My learning #2: Ask what is the real problem for which we need a solution.
“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” – Albert Einstein
Strategies of Organizational Resilience
How organizations deal with the surprises or problems to be solved depend on the organizational resilience maturity, time, culture, circumstances and so on. Professor David Denyer, one of the course leaders, has researched and developed a model of resilience strategies. There are five evolutionary phases or strategies to organizational resilience: preventative control, mindful action, performance optimization and adaptive innovation. The fifth one is a neutral or paradoxical thinking strategy. The resilience strategies differ on two core dimensions: 1)mindset of being defensive or progressive and 2) approach on consistency or flexibility. There are benefits and disadvantages, blindspots and risk factors on each of the strategies. The ”not” happens and catches the top management by surprise when there are controls without mindful action (case Sellafield), responsiveness without efficiency (case Enron), optimisation without innovation (case Kodak) and innovation without governance (case Uber). My learning #3: It is all about a balance of choices, not either or but both and.
Culture Eats Controls, Responsiveness, Optimisation and Innovation
Culture eats strategy for breakfast and after that it swallows as a snack those aforementioned organizational resilience elements of controls, responsiveness, optimization and innovation. There are many similarities between leading organizational resilience and leading organizational culture. The most striking to me is the need to balance the tensions: consistency and flexibility, people and processes, progressiveness and defensiveness, internal and external focus. Secondly, organizational resilience and culture are among the top priorities of leaders, but vast majority of the organizations lack means how to lead these drivers of sustainable growth. The third theme, which links resilience and culture inevitably, is the fact that leading organizational resilience requires an understanding of organizational culture. My learning #4: If you start with culture, it will enhance organizational resilience, if you start with organizational resilience, you will also end up working with cultural issues.
The article was first published as a Linked In article on March 6th, 2019 by Tuija Janakka.