Howard Kerr, Chief Executive of BSI, offers a fresh perspective on Organizational Resilience
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.
Building a resilient organization
One model for Organizational Resilience comprises three fundamental elements:
- Product excellence
In this context, ‘product’ refers to whatever product, service or solution an organization brings to market. Today’s CEOs must ask themselves which markets their organization serves. Do its capabilities and products match those markets’ requirements and comply with their regulatory environment and, if not, how can it adapt them? Truly resilient businesses innovate, creating new products and markets, and differentiating their offering to stay ahead of their competitors.
- Process reliability
Embedding best practice in developing and marketing products and services is a key component of success. Resilient organizations ensure that they ‘do the basics right’ consistently through the strength and reliability of their processes, while still leaving scope for innovation and creativity. Business-critical processes in the management of areas such as quality, environment, health and safety, information security and business continuity must be robust and compliant, both within an organization and also throughout key parts of its supply chain.
- People culture
Resilient organizations seek alignment between customer expectations and employee engagement. Today’s CEOs are inclusive and consultative, not simply dictating rules to be followed, but encouraging employees’ behaviour to become an integral part of their job and their organization’s culture. The challenge for CEOs is to understand, articulate and demonstrate their organization’s values clearly, so that everyone ‘lives’ them, not because they’ve been told to, but because ‘it’s the way we do things around here’.
This model is deliberately drawn as a positive feedback loop, with process excellence driving up product reliability, indivisibly linked to the people culture of an organization. Long-term resilience requires looking at your organizational capabilities holistically, enabling you to hold on to new ground, and to strive for continual improvement.
The model further summarises the defining qualities of resilient organizations – the hallmarks that show them to be a breed apart:
- Agile leadership – allowing them to take measured risks with confidence and to respond quickly and appropriately to both opportunity and threat.
- Strategic adaptability – giving them the ability to handle changing circumstances successfully, even if this means moving away from their core business.
- Robust governance – demonstrating accountability across organizational structures, based upon a culture of trust, transparency and innovation, ensuring they remain true to their vision and values.
Stand out and win
To stand out and win, every organization, regardless of its size, sector or location, must develop an approach to resilience that is right for it – underpinned by its culture and defining its brand.
The model featured for Organizational Resilience is built upon over a century of our own history and tens of thousands of client interactions annually around the world. We have learnt Organizational Resilience from our own experience – and from that of others. Now we can share that insight through our own Organizational Resilience model, through the British Standard for Organizational Resilience BS 65000, and through our broad range of other relevant standards and business services.
Whatever the future holds for your company, Organizational Resilience will help you harness your experience, embrace your opportunities – and pass the test of time.
Your legacy as a CEO will be determined not so much by what you achieve today but by what the organization achieves in the future.
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