The recent global pandemic revealed existing cracks in the structure of organisations. When things got worse, some companies closed and could never recover from the challenges brought about by the pandemic. There were massive layoffs everywhere, and employees lost their jobs. No one could go to the office anymore, and in the end, companies had to adjust to the new normal.
The reality is that the pandemic isn’t the only challenge that organisations will face in their lifetime. A hundred possible scenarios could arise that could weaken a company’s structure. The key, then, is to establish and build organisational resilience.
What is organisational resilience?
When people weather the storm brought naturally by life, they are called resilient. The same goes for an organisation. It is the act of helping your organisation navigate complex and turbulent circumstances. When an organisation is resilient, it can bounce back from change or misfortune. Organisational resilience is the capacity of an organisation to absorb stress, recover functionality, and thrive in complex circumstances.
Why is organisational resilience important?
Organisations must build resilience because the business environment is transforming into a much more dynamic and unpredictable one. They must endure stress and learn to stretch business systems. Some of these include accelerating technological evolution and establishing greater interconnectedness to give importance to broader social issues such as rising inequality, climate change, and species depletion, among many other examples.
Ten steps to building a resilient organisation
- Keep open communication. As your organisation changes, it’s essential to communicate openly with your stakeholders. Explain the reasoning for any change in the company. Remember to be willing and open in answering any questions and concerns from employees and other parties. Being proactive will help establish smooth transitions for your organisation.
- Duplicate systems. Create redundancy to buffer against unexpected shocks, even at the expense of short-term efficiency. One example is building multiple factories that create the same product or having different elements that reach the same result (functional redundancy).
- Ensure diversity of thought inside the workplace. Various responses to new stress ensure that systems do not fail catastrophically, although it is done at the expense of the efficiencies obtained through standardisation. This part means employing people from diverse backgrounds, as well as empowering people to think and create differently to look at things from multiple angles.
- Establish modularity in the organisation. This part will ensure that although individual elements of the organisation may fail, the whole system will not collapse. A modular organisation can be divided into smaller chunks with well-defined interfaces and rewired during a crisis.
- Adopt agile practices. A key concept in agile project management is that your team can pivot and adjust to changes as needed. This step looks different for each organisation, but it always results in faster deliverables and the agility to change priorities daily to reach the end goal.
- Develop contingency plans and stress tests for plausible risks with significant consequences. Go through scenario planning, monitor early warning signs, and analyse system vulnerabilities.
- Align your company’s goals and activities with those of broader systems. This process of embeddedness is crucial because your organisation is part of the larger supply chain, business ecosystem, economy, society, and natural ecosystem. When you articulate a purpose, you ensure that your organisation is not opposed to the community or is not inviting resistance, sanction, or restriction.
- Seek advantage in adversity. Aim to create an advantage by adjusting to change. Don’t merely plan to mitigate risk or damage or restore what was.
- Prioritise collaboration. When a business is under stress, the organisation’s components can be under the spotlight. It’s best to think of collaborating with all the systems present to find systemic solutions during this time. It could include collaboration among all employees, customers, and other stakeholders.
- Measure success beyond performance. Lastly, the health of an organisation is not only measurable through its performance. Measuring flexibility, adaptation, and other components of resilience is good. This process can be done by looking at capabilities or benefits.
Organisational resilience means adapting to stress and change that often occurs because of unexpected circumstances. It represents an opportunity to overhaul your business process or strengthen your company’s foundations.