How to build organisational resilience to weather turbulent times
Why companies should break their habits and adapt before it’s too late
What is organisational resilience? There are two definitions to consider. The traditional view describes resilience as the ability to recover after a crisis has struck. The other defines it as the ability to “be aware” ahead of a crisis – to act and adapt before you have to, or before it is too late.
The rate of change is increasing exponentially. The Fourth Industrial Revolution is disrupting most industries, and the rules of the game keep changing. Black Swan events occur and are only obvious in retrospect.
Prominent companies such as Nokia and Kodak could not adapt to their changing environments. They relied on past best practice, earlier successes and old rules to keep doing what they had always done – in what is labelled the “Icarus paradox” by Danny Miller. Maybe they just tried even harder.
Amid the challenges and opportunities that arise in turbulent times, many leaders find it difficult to create urgency for change within their organisations. Leading practitioners and academics see such urgency as a key ingredient for managing change.
A typical question is: why should we change when the organisation is performing well? Actually, when the performance curve is looking good, it is the best time to be cautious and adapt. However, many organisations struggle to change their routines, foresee possible crises and turn them into opportunities.
So is it even possible to develop the organisational ability to manage and adapt to change without the obvious urgency to do so?
Let’s consider a statement by systems theorist Niklas Luhmann: “We don’t see that we don’t see what we don’t see.” This is a powerful message regarding the organisational blindness that develops as companies stick to their routines, structures and processes. They learn what works and what doesn’t, enabling them to avoid past mistakes and, importantly, to keep doing what made them successful.
Statements like “We’ve tried that one before and it didn’t work!” are effectively stop buttons that help organisations avoid mistakes. But trying again might be exactly what they need to do!
Overconfident organisations fall into the success trap of doing only what they do well – until that becomes irrelevant because their markets have changed. But they keep doing it because “that’s how we do it here”.
Hierarchies, structures and processes enforce existing routines and business models. Organisations (and people) rely on past habits and experience when reacting to what’s unfolding in front of them, instead of seeing things as they really are and reacting appropriately.
Building resilience into an organisation improves its chances of surviving disruptions, catastrophes and turbulent times. Such resilience also helps an organisation through the in-between transitionary state during a strategy change. The key question is how to become resilient and thrive.
Organisations need to develop practices that allow them to reflect on routine actions and build resilience as an everyday capability. Some of these practices are:
1. Breaking habits
If something is not working, the classic routine is to try harder and set new timelines, or to stop doing that and do essentially the opposite. But managers and leaders must reflect on what they are doing and change their habits to develop useful new actions. For example, an organisation may typically resort to cutting costs when what is really needed is investment in product innovation.
2. Stop being busy
Take the time to think deeply and ask questions. This helps you observe what you don’t see when you are busy.
3. Communicate with people at the fringes
Take an interest in non-familiar surroundings and engage curiously with people at the leading edge in other industries. Ensure diverse communication along three dimensions: people, ideas and endeavours. Invite contradicting opinions; explore different perspectives and novel ideas; challenge the status quo; and look for emerging opportunities. Interpret and seize the importance of these interactions and the signals of changes in your environment.
4. Learn not to automatically see things as right or wrong
There isn’t always an immediately obvious best way forward. Sometimes it’s more useful to be patient and allow the way forward to show itself in time.
5. Be prepared but accept emerging opportunities and surprises
Even a good strategy most likely does not prepare an organisation for unexpected events, since there are no perfect models of the future. A flexible strategy is required to take opportune action.
6. Employee engagement
Leaders need to build resilience into their organisations – for example, by inviting diverse voices and engaging employees in strategic discussions about the organisation’s future.
The hardest part is the organisational effort required to constantly develop and strengthen resilience. Organisations must practise these actions, not wait until they become a necessity. It’s like going to the gym: the muscle of resilience needs to be trained to stay healthy for handling constant change.
Dr Heidi le Sueur is a senior lecturer at the University of Stellenbosch Business School and an expert on strategic organisational change.
This article was paid for by the University of Stellenbosch Business School.