Decoding Resilient Enterprise Growth Strategy

The focus of this Research Newsletter is to help organizations plan their Resilience oriented Growth Strategies. This edition will benefit Business Leaders, Policy Makers, Academia, Resilience Researchers & Risk Managers. The research question being addressed is why and how organizational leadership must build the dynamic capability of Business Resilience. However, the initial legitimate question is why Resilience has recently gained so much attention. Therefore, we must investigate this phenomenon before elaborately discussing how Strategic Resilience capabilities are Designed.

COVID19 has exposed organizations to vulnerabilities that were never experienced before. This business vulnerability has triggered Resilience conversations and research with accelerated intensity. However, the thought of Resilience existed before the pandemic also and shall remain crucial for times to come. The fundamentals of Resilience are intertwined with the concept of a Volatile, Uncertain, Complex & Ambiguous World. This is the World Order that organizations must engage with, and Business Resilience is the remedy.

The world looks divided on multiple fronts. First, there are conventional & unconventional conflicts with ever-increasing trade wars; however, Supply Chains & Business Models are affected owing to many other economic factors, global events, and risks. Therefore, it becomes vital to study these dynamics to make sense of why Resilience must become an important area of focus at the individual, organizational and national levels.

Proposition 1: Our research indicates Turbulence is here to stay, and unpredictability will rise, making the environment increasingly Volatile, Uncertain, Complex & Ambiguous.

Considering the above discussion, it is evident that Turbulence in the environment is given. Business Leaders have two choices either to acknowledge that paradigms need change or live in a state of denial and pursue the pre-pandemic approaches only to accentuate noise in the ecosystem. Therefore, Organizational Resilience (OR) becomes an essential dimension in Organizational Sustainability (OS) and Business Continuity Management (BCM) in this changing business environment. Organizational Sustainability is about creating value through the triple bottom line (People, Planet, Profit) to maintain a competitive advantage. Organizational Resilience is about the ability to bounce back & grow after every disruption. Business Continuity Management comprises initiatives that evolve Business Models through value creation to engage productively with the changing environment in real-time.

Proposition 2: Policy Makers and Business Leaders must now focus on three pillars to deal with VUCA-World, Organizational Sustainability, Organizational Resilience & Business Continuity Management to approach Growth holistically.

Every Perfect Storm is managed through the four-stage Resilience Process indicated above. It is, however, essential to appreciate that Organizational Sustainability demands an internal and external focus in the planning stage. Given the VUCA dynamics, every organization will now have to be ever prepared to respond effectively to Black Swan Events which are low on probability and high on impact. However, internal stressors would also reach an inflection point and disrupt managerial decision-making and outcomes in states of flux or otherwise. As we find in our study, four stressors will continually act:

1. Situational short-term stressors inherent to the system
2. Decisions in unpredictable times that would create erroneous outcomes & related stressors
3. Chronic Internal Stressors inherent to the system, either not detected or current inability to act upon
4. A Perfect Storm of Disruption that cannot be predicted

Organizational ability to respond to these stressors with alacrity will determine the growth conditions for the Organization. This links us to proposition two above that Organizational Sustainability, Organizational Resilience, and Business Continuity Management must become integral to growth planning.

Growth Strategy thus is not about focusing on topline and bottom-line anymore; in fact, they are by-products of the above OS, OR & BCM. Therefore planning for contingent events and effective responses emerges as the first focus area. Data-Centricity based on a Sensitive Radar System must be established as a Nerve Center monitoring & controlling real-time the stressors mentioned above. This intelligent real-time data must then feed to derisking measures continually to deal with stressors through a Command Center with Risk Management Teams. Our research evidence that de-stressing systems continuously enable Organizational Sustainance & Organizational Resilience and ensure the foundation for Growth.

Proposition 3: A perpetual preparedness for risk mitigation is the key to growth strategy through Resilience Management.

While high probability low impact stressors can be managed regularly, the challenge becomes complex when dealing with low probability high impact events termed Perfect Storms or Black Swan Events. They tend to impact Business Models adversely. These events also alter the dynamics of consumer behavior and markets. The disruption is catastrophic, and responses cannot be planned. Absorption capacities ensure the ability to bounce back. As a part of OS, OR, and BCM policy, slack resources, which are critical, need to be maintained in their above-normal capacities to provide buffers during disruptive events. These are capital structures, priority inventory, necessary knowledge stock, and scalable technologies, to name a few. Absorption capabilities allow critical operations to be maintained, ensuring business sustainability. Absorption capabilities also ensure Innovation capacities and Design capabilities to be utilized in controlled intelligent experiments for planned recovery. It is also crucial to state that the correct timing of the recovery process trigger is the key. While Innovation provides the agility of response, Design capabilities allow reconfiguring Business Models to facilitate Business Continuity Management. Without Absorption Capacities, enterprises run a high risk of business termination as they would not be able to engage in Innovation & Design for Growth.

Proposition 4: The key to triggering Growth after every Perfect Storm is the availability of Absorption Capacities.

The Recovery Process must have two aims. One aim is to establish equilibrium, and the second objective uses Turbulence as an opportunity for a positive business orbit shift. Thus, Product & Service Innovations can deal with changing consumer mindsets to establish equilibrium. Design Thinking can enable solutions to complex human-centric problems and remodel Business Value Chains. The design approach builds an effective ecosystem to couple with the new market & industry environment. The Recovery process must ensure the participation of diverse stakeholders in conjunction with the Nerve Center and Command Center that ensure Risk Mitigation. Innovation teams can be agile teams that operate on a project basis. Thus Recovery Management for Growth typically involves Business Innovation and Design Thinking.

Proposition 5: Business Innovation and Design Thinking Capabilities enable and ensure a well-calibrated Recovery Process.

The change of the Business Model for the new reality accomplished through Design Thinking now requires Adaptation. If the Adaptation process is not designed, then only equilibrium is ascertained at most. Adaptation to the new environment achieved through Business Model Innovation contributes to Business Continuity Management. Equilibrium is the status quo that makes the organization vulnerable to competition. Thus, Adaptation to the altered environment through an augmented ecosystem ensures Growth. Here we need to focus on processes, structures, behaviors, technology, knowledge stock, and resources, to name a few. The Entrepreneurial Mindset is emerging as a vital behavioral competency for critical leaders. A well-thought-out Adaptation process thus ensures Growth. Organizational Resilience can therefore be built and enhanced as a dynamic capability accomplished through Innovation and Design Thinking by continually managing all types of stressors in the VUCA World.

Proposition 6: Organizational Resilience is a dynamic capability that can be ensured through an Entrepreneurial Mindset scientifically imbibed by Business Leaders. Organizational Sustainability, Organizational Resilience, and Business Continuity Management must become integral to Business Growth Strategy.

Resilience is an ongoing process. Therefore, it must become a part of all Leadership conversations. However, secondary research shows that OS & OR alone may not ensure BCM. Thus Business Continuity Management must be a conscious endeavor that weaves in Organizational Sustainability & Organizational Resilience; else, only short-term equilibrium is possible. Research shows that the Resilience factor grows each time an organization emerges from Turbulence.

Our study concludes that a Business Strategy focusing on Organizational Sustainability, Organizational Resilience, and Business Continuity Management shall experience superior Growth in this unprecedented & unpredictable world order. A scientifically enabled Entrepreneurial Mindset in Business Leaders becomes an essential competence in achieving this Resilient Growth. Therefore, striving for Business Excellence is now the pivotal aspect of Business Strategy.

Copyright: Niket Karajagi Atyaasaa

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