LONG-TERM PROSPERITY IN BUSINESS IS RARE and decreasing. In the US, for example, research has shown that companies currently remain in the S&P 500 index for an average of just 18 years, down from 61 years in 1958. And it’s a similar story else where in today’s dynamic, interconnected world.
Every CEO will agree that, to ensure lasting success, their organization must become ‘resilient’. But what does this really mean in practice?
There have been numerous management papers on how and why companies should embrace resilience in order to protect themselves from growing business threats. But ‘Organizational Resilience’ is based upon a much broader view of resilience as a value driver for organizations, enabling them to perform robustly over the long term.
Our own recently-published Standard BS 65000, defines Organizational Resilience as “the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper”. Here, the words “and prosper” really matter. Organizational Resilience reaches beyond survival, towards a more holistic view of business health and success. A resilient organization is Darwinian, in the sense that it adapts to a changing environment in order to remain fit for purpose.
It follows that Organizational Resilience is regarded as a strategic imperative for all companies, both large and small.
While there is always an important element of risk management in Organizational Resilience, it should be equally focused on business improvement. Organizational Resilience is not a defensive strategy, but a positive, forward-looking ‘strategic enabler’, which allows CEOs to take measured risks with confidence. Robust, resilient organizations are flexible and proactive – seeing, anticipating, creating, and taking advantage of new opportunities – in order, ultimately, to pass the test of time.
By demonstrating their organization’s resilience – through certification to recognised standards, for example – CEOs are also showing that it is reliable, trustworthy and a company that others would want to do business with. In this way, Organizational Resilience underpins enviable brand values and priceless reputational benefits.
Achieving Organizational Resilience requires the adoption of excellent habits to deliver business improvement by embedding competence and capability across the business: from products and services to people and processes; and from vision and values to culture and behaviours.
Organizational Resilience encompasses, but also transcends, the operational aspects of a business. It is founded on the values, behaviours, culture and ethos of an organization. It is the leaders of an organization, especially CEOs, who drive these ‘soft’ factors but, to make a cultural difference, the message must be both top-down and bottom-up, requiring both a mandate to, and also a willing embrace from, all employees.
Learning from experience
The writer and philosopher Aldous Huxley said, “Experience is not what happens to a man; it is what a man does with what happens to him.” Similarly, resilience is not what happens to an organization, it is what the organization does with what happens to it.
The most resilient organizations are eager to learn from their own and others’ experience to minimise problems and grasp opportunities. Peer-to-peer networking and knowledge sharing are vital, for example, when they seek to invest in new areas, introduce innovative products and processes or penetrate new and unfamiliar markets.