An introduction to organizational resilience: Why is it so important and what you need to know

Global supply chain disruptions. The COVID-19 pandemic. Rising living costs and mounting bills that never seem to go away on their own. The era of Great Attrition and Quiet Quitting. A generation of largely unemployed jobseekers who struggle to find employment. War-torn times. Today’s modern world continues to be plagued by a myriad of global events that threaten our livelihood. These days, constancy is a thing of the past, and change is the new normal in our lives. Organizations in particular, suffer from the constant challenge of needing to adapt to the ever changing circumstances brought about by said global events. With how often things are switching up, learning to transition smoothly into a new environment has become a vital skill set for organizations to acquire, and one that is necessary is ensuring its longevity.

Adapting to the ever presenting circumstances

While the definition of organizational resilience remains subjective, the common theme surrounding the terminology is the ability to anticipate, predict and assess challenges. Thus, organizational resilience can be loosely defined as an organization’s ability to adapt, transition and rebound from the face of adversity whilst still maintaining its ability to thrive and prosper under hard times.

Contrary to popular beliefs that organizational resilience is the one-dimensional ability to face hardships and effectively stave off crises, it also tests an organization’s ability to innovate and transform hardships into opportunities, essentially turning one’s weakness into strength that could be used to propel organizations to greater success.

The Organizational Resilience Tension Quadrant

According to a collaborative study between BSI and the Cranfield School of Management, 4 types of coping styles have been identified in organizational resilience. Housed under the Organizational Resilience Tension Quadrant, the 4 coping styles are then categorized through two defining traits - Progressive (to achieve results) and Defensive (to protect results).

Performance optimization

The act of continuously improving, developing and refining competencies, and making use of current technologies to adapt and thrive in the face of adversity.

Preventive control

The conscious act of mitigating losses, coming up with contingency plans or redundancy, creating system backups and providing physical barriers that protect the company from further harm.

Mindful action

The act of cultivating awareness in employees to efficiently respond and react to emergencies or unpleasant situations.

Adaptive innovation

The ability to innovate and produce creative solutions to address the presenting challenges, explore uncharted territories and bring about positive disruption to the organization that can drive and create growth that will allow the business to continue thriving and flourishing.

The 4 styles of organizational resilience coping methods as identified by BSI and the Cranfield School of Management. Image courtesy of Cranfield School of Management.

What makes an organization resilient

Challenges, crises and adversities come in all shapes and sizes. Ultimately, what makes an organization resilient is the employee and leaders’ ability to reorient themselves and adapt to the presenting challenges. It is making the right call to address emergencies and owning up to one’s mistakes when things go south. To quote McKinsey & Company on organizational resilience,

“When challenges emerge, leaders and teams in resilient organizations quickly assess the situation, reorient themselves, double down on what’s working, and walk away from what’s not…Companies that cultivate organizational resilience - driven not only by crisis but also by opportunity - can gain an important, lasting advantage over competitors.”

We know that organizational resilience is learning how to adapt to the challenges, but realizing how and what organizations do to achieve said resilience is equally important. Here are several defining traits of resilient organization to consider.

Redundancy

While the word itself carries a negative connotation, redundancy in this context refers to a contingency plan, or an organization’s ability to prepare a backup plan in order to remedy a presenting crisis. Redundancy can also be viewed as precautionary measures or a Plan B to address a challenge should the initial plan prove insufficient to address the problem. For example, during the COVID-19 pandemic, many F&B establishments that were forced to close down took to online ordering and deliveries to sustain themselves throughout the lockdown. Rather than waiting for the government to lift the lockdowns, most establishments immediately learned to adapt to the situation by coming with a Plan B, that is delivery to continue garnering the business revenue.

Fostering resilience through leadership and talent

Another defining trait of a resilient organization is the leaders and employees’ ability to cultivate resilience among each other through a series of behaviors including but not limited to:

● The ability empower and uplift colleagues through knowledge-sharing sessions

● Providing a safe and transparent environment for employees to actively voice out their disagreement, thereby challenging leaders themselves and allowing employees to grow

● Encouraging displays of empathy, compassion and kindness amongst team members

● Directing team members in focusing on the present and addressing presenting problems instead of engaging in a finger-pointing session

● Actively coaches and nurtures talents to develop resilient behaviors that are helpful in addressing challenges in the long run

● Creating a de-centralized decision making protocol or dynamic decision making process amongst employees, meaning employees are capable of making important decisions to address a crisis in organizations as opposed to waiting for command from the higher ups to properly troubleshoot any standing challenges

Fostering a resilient group of leaders and employees is all about helping your team members cultivate a sense of unity towards the cause. The goal here is to empower everyone and help mobilize the team to adapt to the changes in the quickest time possible. As such, having traits such as humility, patience and unconditional positive regard towards failure and success are key in ensuring employees can adapt seamlessly to the changing times.

Establishing a psychologically healthy environment

Apart from empowering employees in times of hardships, McKinsey & Company believes that organizations that are resilient actively encourage employees to be comfortable with failure and lack of success. Encouraging failure ensures that employees are not risk-averse, which means they are more open to taking risks and therefore the ability to innovate and explore alternative solutions to address an organizational problem. Furthermore, leaders in a resilient organization value the mental wellbeing of their employees, often keeping tabs of their mental welfare and ensuring that employees are constantly valued and trusted at work. Additionally, they take time to recognize and acknowledge an employee’s contribution to the business. To add to that, CQNet, a firm that specializes in providing organizational management consultancy services, adds that leaders in a resilient organization also preach the importance of optimism, self-efficacy and hope, traits that are crucial in helping employees and leaders alike in forging through tough times.

The willingness to invest resources into upskilling employees

It’s easy to think when a crisis happens, businesses should rely on cost-cutting and layoffs in order to prevent massive financial losses and to preserve resilience. However, this couldn’t be any further from the truth. Contrary to popular beliefs, an organization that is resilient and hardy is more likely to invest resources in upskilling and training their employees during a crisis in order to better handle the challenges at hand. The idea stems from the fact that businesses that spend time investing in their employees maintain a better relationship with their customers, as employees are key in helping organizations and businesses retain customers. According to a study that examined organizational resilience in companies following the 9/11 attack, firms that laid off large numbers of employees following the harrowing incident reported poorer customer relationships, which translates to massive financial losses. However, firms that were willing to invest the necessary time and resources into training their employees showed greater customer relationships, which enabled them to maintain profitability throughout the ordeal. Additionally, McKinsey & Company found that resilient organizations invest in analytics to hire, develop and retain talents more effectively. Resilient organizations also revamp their hiring process to look beyond traditional talents, instead focusing on locating the right fit, managers tend to look out for potentials, both internally and externally.

Transforming the organization into a HRO

Or a high reliability organization. HROs generally involve organizations that dabble in high-risk activities, such as nuclear facilities, O&G companies, commercial airlines to name a few. While the nature of the job is such that employees and organizations are predisposed to dangerous outcomes, HROs attempt to minimize instances of accidents and ensure that failures are kept to a minimum. According to CQ Net, HROs are primarily distinguished the following traits:

1. HROs are highly focused on identifying potential threats and taking preemptive steps to resolve them

2. HROs are thorough in their safety prevention measures, and often encourage diversity in opinion so as to ensure the organization is not solely reliant on a single interpretation for good judgment

3. HROs boast strong senior management and staff that are capable making the right decisions, and they carry the notion that their actions affect the rest of the organization

4. HROs not only preemptively mitigate threats, they also visualize and identify potential scenarios that could go wrong during the conflict resolution process, thus ensuring mistakes are further minimized

5. HROs value staff that are capable of making the right decisions during crises and allow the staff to assume leadership roles in addressing critical issues

Resilient organization, resilient employees…

A resilient organization is fundamentally comprised of resilient employees who are capable of withstanding and addressing crises, both in the short and long run. In order to cultivate a resilient organization, organizations must first realize that resilience starts from the top-level management, that is the leaders and focus on a culture that is both supportive and empowering, so as to ensure that employees are similarly empowered to react and carry themselves in a similar manner. It’s a two-way street, a resilient organization is propelled by resilient employees and vice versa.