What does Resilience really mean for Organisations?
SURVIVING AND THRIVING WITH UNFORESEEN RISK AND CHANGE
With the publication on 27 November of a new British Standard on Organisational Resilience (BS 65000:2014), soon to be followed by and International Standard on the same theme, it is timely and important to consider what this means for both public- and private-sector organisations.
We are all familiar with resilient people – people who do amazing things in spite of great adversity. We also try to encourage children to be resilient. Yet, we are not so familiar with the term ‘resilience’ as it applies to organisations. This is in spite of the fact that resilience has become a popular term in the managerial lexicon: it increasingly peppers articles and discussion. So what exactly is resilience, why is it important and how can it be applied?
WHAT IS THE VALUE ADD?
The benefits that resilience can bring to an organisation are important to appreciate from the start. Essentially, if an organisation is to survive and thrive in an increasingly complex and dynamic world then it must have a sustainability plan that will take it through change as well as crises for not just one year but also many years. And a plan that can generate a positive ability to rise above events and increase share value for the long term – the upside of any challenge – is one that can only come about through concerted, synergistic engagement across the organisation as a whole.
If resilience is applied through a positive culture and unifying activities then cost and efficiency savings will more than pay for the effort exerted. Currently, for instance, many organisations have strategic and operational plans and programmes that address risk, business continuity, security and incident response in isolation, resulting in gaps or wasted resources through overlaps: risk managers maintain risk registers, security managers conduct threat and vulnerability appreciations, and business continuity managers carry out business impact assessments.
Organisational resilience aims to bring these tasks and activities together through an integrated approach – one that sits at the very centre of an organisation’s management ethos and modus operandi. By acknowledging and embracing the linkage between, and interdependency of, risk, strategy, communications, security, etc, resilience vastly expands the context and landscape within which organisations take decisions. This is the first step to integration for the greater good.
Resilience has the potential to transform an organisation from the ordinary, silo-based structure to the exemplary, cross-functional entity, one that enables the workforce to be inspired and trust in the brand to be heightened. Resilience has capital and is therefore worth the investment. Quite simply, organisational resilience and profitability are two sides of the same coin.
WHAT IS THE RELEVANCE?
Resilience is by no means a new term. It is used in distinctively different ways across disciplines as diverse as socio-economic, environmental, governance and infrastructural portfolios as well as human behaviours. The common, key ingredients of resilience are these:
It is a capacity or capability to deliver a defined outcome or status; it requires a set of activities and attributes to deliver results but it is not a managerial or risk process or tool box.
It is more than ‘bouncing back’ from a situation or ‘keeping calm and carrying on’. It is not just a recovery and a return to the status quo ante. Rather, it is about bouncing forward by moving to a new, elevated situational awareness. This requires an adaptive capacity in a transformational process.
It is about an agility to be able to cope with change and respond positively so that learning experiences can be aggregated and can help produce a higher state of awareness. It demands a degree of flexibility and robustness.
It is about long-term viability, not necessarily short-term response to any single event, whether that is a small incident or a major crisis. It therefore necessitates a degree of forethought and foresight through planning and horizon scanning. This will help make sense of the prevailing noise.
It is not about size, structure, system or sector. Aircraft carriers, the human immune system and insect colonies can all display a high degree of resilience, for instance. However, large or small systems still require a level of sophistication that will permit alternatives and tensile strength to absorb, recover and move on from setbacks. This infers both resistance and redundancy.
While context and culture are important – the resilience of communities from Dhaka (Bangladesh) to area flooding will be different to the population of London (UK), for instance – resilience is not incident or risk specific. It should be residual and persistent for multiple and multifarious incidents. In a similar way, the resilience of children is not predicated on life’s specific challenges such cancer, divorce, bereavement or redundancy.
Taking these ingredients as a whole, the interpretation of organisational resilience is the ‘capacity of an organisation (people, systems and networks) to anticipate, absorb and adapt to a dynamic and complex environment’. All three verbs constitute the core of resilience. Other definitions may have merit in other environments but for want of clarity and brevity, the interpretation chosen here conveys the focus of organisational resilience.
The truly transformational element here is that resilience requires a high degree of adaptability. This means that organisations are able to overcome and grow out of events that were above or outside the previous experience or planning horizons – the so called ‘black swans’ or ‘unknown unknowns’ – especially long-term strategic or systemic changes in the operating environment.
WHAT IS THE SCOPE?
It is recognized that an organisation does not operate in a vacuum. It operates in an environment where staff or customers live in the environs and products may be distributed worldwide under a global brand name. Hence, there are issues of reputational, societal, environmental, logistical and personal resilience – all have a part to play on the success of an organisation. In American parlance, for example, the bankers of Wall Street come from, and live in, Main Street; the two are not discrete entities but part of a whole.
Similarly, a factory built for resilience in say an earthquake zone will be ineffective if the surrounding, shattered environment prevents a sustainable supply chain. It is therefore impossible to isolate organisational resilience from other forms of resilience but in this Standard those other areas will not be the primary focus.
As there is much debate on the distinction between continuity and resilience, it is worth emphasizing that the former does not equate to the latter. Short-term crises or disruptions are characteristics of many environments which demand an immediate response to ensure business as usual (continuity) but there are more fundamental shifts and trends to which organisations need to anticipate and adapt, including the ability to spot and exploit opportunities for the longer term (resilience).
Resilience is therefore not a choice between continuity or adaptability. Rather, it is a synthesis of both - short-term continuity in the face of disruptive challenges and long-term viability in the face of strategic change. The first of these is a precondition for, but no guarantee of, the second. Resilience is therefore presented here as a strategic concern requiring leadership and an enduring commitment from the top of an organisation.
There will undoubtedly be trade-offs and dilemmas to address for all organisations when striving for resilience. The question of redundancy, for instance, brings with it potentially extra costs and duplication. The trend towards just‐in‐time deliveries and minimum stock holdings cuts against the resilience grain. Where to embrace new behaviours rather than persisting with existing core values can be another paradox. Each organisation will come to its own decisions on these issues according to its own risk appetite but the important task for leaders is to work through these trade-offs with their teams and to arrive at a reasoned, recorded position.
