What Is Organisational Resilience And Why Is It Important?

what is organisational resilience?
What is organisational resilience and what does it mean? How has understanding of the term changed over time? We asked David from our team to sum it up.
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What is organisational resilience?

Organisational resilience is defined by both the British Standards Institute (BSI) and the International Standards Organisation. 

The BSI offers: ” the ability of an organisation to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions to survive and prosper.” 

Alternatively, the ISO offers: “the ability of the organisation to absorb and adapt in a changing environment.”

Neither organisation defines change as either positive or negative, nor refer to bouncing back or returning to normal. Bouncing back suggests a reactive organisation and sudden success can be as much of an organisational shock as the sudden loss of key talent or sales. 

A quick summary of research around organisational resilience

The world is becoming less predictable and more complex and traditional general and risk management tools and approaches were developed for stable environments with high levels of reliability. That raises questions around how suitable these traditional management approaches are to a modern, more demanding world. Like many things, part of the answer is found by looking back in time to build for the future because research and thought leadership on organisational resilience hasn’t stood still over the last forty years. 

It began with a focus on behaviours that focused on loss aversion and defensive strategies, although it soon became apparent that organisational resilience was more than defensive. Not just about learning to bounce back (Wildavsky,1988) but also the ability to “bounce forward” (Manyena, O’Brien, O’Keeffe and Rose, 2011) to grow and prosper in the future. This phase focused on progressive strategies of continuous improvement driven by process and consistency before moving to adaption and innovation.

In summary, it is best to think of the current position of organisational resilience research has focused on behaviours that are:

Defensive – stopping adverse outcomes from happening
Progressive – making positive effects happen
As well as behaviours that are consistent and flexible.

Resilient organisations best use progressive and flexible strategies. Don't they?

The debate around which strategies work best has been the subject of much discussion, disagreement and misunderstanding.

Academic research has focused on “adaptive innovation” based on progressive and flexible strategies driving organisational resilience. They argue that innovation creates a competitive advantage in today’s environment of rapid knowledge production. This perspective is summed up in the famous quote, often attributed to Charles Darwin, highlighting the importance of adaption.

It is not the most intellectual of the species that survives; it is not the strongest that survives, but the species that survives is the one that is able to adapt to and to adjust best to the changing environment in which it finds itself."

However, senior leaders must manage the tension between the approaches if organisations are to be truly resilient. A holistic approach is required moving beyond “either/or” focus and effort will depend on the nature of the organisation, the industry, process and the macro environment it operates in.

Whichever strategies are appropriate, one single truth emerges. Organisational resilience is linked to success.

History shows that those organisations that respond well during a crisis have tended to take precautionary measures not to be overwhelmed during an emergency. Those actions include building resources, training and continuity plans and process.

The research on organisational resiliency suggests that successful firms prepare for adversity and are proactive and flexible when encountering a crisis. They prepare for difficult situations and demonstrate a “generalised capacity to investigate, to learn, and to act, without knowing in advance what one will be called to act upon.” (Wildavsky, 1988).

Research has also shown that during a crisis, resilient organisations do not limit resource. Overall, organisational science suggests that resilient organisations do not restrict resources when dealing with threats to their existence (Gittell, Cameron, Lim & Rivas, 2006). Instead, they deploy internal resources so they can continue operations after a crisis.

Succinctly, they prepare for the worst and are strategic in both recovery and growth.

Another reason why some are more resilient than others is that they value their people.

When people make mistakes in the workplace, this is not seen as a source of error but rather an opportunity to learn from the incident and to build resilience (Hollnagel, Woods & Leveson, 2006). This shift in thinking results in an organisational culture that focuses on the observation and containment of problems (Sutcliffe & Vogus, 2003).

To understand this perspective more, it is helpful to look at what organisational science calls High-Reliability Organisations (HROs).

Many organisations operate in complex and potentially dangerous environments but do so with a low level of failure. Think of commercial aviation, nuclear power, oil and gas. Whilst reliable and efficient procedures contribute immensely, organisational scientists also believe that teamwork and the cognitive functioning of their people make these organisations so effective. They point to high-reliability organisations having a unique way of thinking.

High-reliability organisations (HROs) use five interdependent strategies that foster resilience:

  1. They prioritise reliability and are sensitive to possible threats. There is a focus on the possibility that something could go wrong (Weick & Sutcliffe, 2007)
  2. They don’t rely on simple interpretations of events. Instead, they make a deliberate effort to create a complete picture by encouraging diversity in perceptions so that assumptions are open to challenge.
  3. The leadership in HROs is strong and everyone is aware that their decision making can affect the entire organisation (Weick & Sutcliffe, 2007).
  4. A commitment to a resilient mindset is made, recognising things will go wrong yet can be identified and resolved by minimising harm.
  5. HROs value their people by allowing them to make critical decisions during a crisis. Senior leaders visibly and pro-actively reinforce behaviours and help fix urgent issues.

All of this points to Human Resource implications as individuals are crucial to developing, managing and maintaining organisational resilience.

Organisational performance beyond process and procedure depends on the employee experience. In a knowledge economy, we now live and work in, now more than ever. Attempts at developing the employee experience tend to be one-sided, focused on the individual but not from the individual. Organisations tend to invest time, effort and funding into change management training and methodology. Leadership teams focus heavily on employee engagement and still suffer from employees reporting low levels of engagement. HR departments focus on talent management and leadership development only to see little change in leadership behaviour or team dynamics. So what’s missing?

Research points to three key elements:

  1. One of the best ways organisations can foster resiliency is by providing individual training and developing specialised competencies to enhance resiliency (Coutu, 2002).
  2. The other way that organisations can foster resiliency is through increasing the motivation and psychological resources of their employees, such as self-efficacy, optimism, hope and resiliency (Sutcliffe & Vogus, 2003)
  3. Organisations can accomplish this by giving employees task autonomy and discretion because this builds a sense of self-efficacy and competence (Sutcliffe & Vogus, 2003). This confidence boost can enable employees to respond well during challenging situations (Masten & Reed, 2002).

The Resilience Development Company has specialised in helping organisations do this since 2013. Our programmes focus on resilience skills that move people from overwhelm to resilient. Like modern organisational resilience strategies, our skills offer a toolkit that can be used by people defensively or progressively. This is because they unlock adaption and innovation. They allow the person to select the skills they need for the circumstances they find themselves in.

If our brains aren't trained and empowered to act resiliently before change kicks in, there's a missed opportunity to grow resilience.

Our work demonstrates time and time again, regardless of the sector or industry, developing people is key to organisational resilience. And there is no right time to do it. Many of our long-standing clients are happy they invested in their people before the pandemic and have told us how quickly they have been able to move forward. Potential clients are thinking about how they do it now. One thing is true regardless.

Organisations that regularly deal with fast-evolving situations—think SWAT teams and military commandos—know that it pays to prepare and practice whilst you have the luxury of time and resource. That’s easier than trying to learn to adapt in the eye of the storm.

Conclusion

Thinking around organisational resilience has moved from a singular focus on defensive strategies and beyond progressive strategies to adaption and innovation.

Many organisations will be focusing on processes, policies, contingency planning etc., to bounce back. However, the smarter strategy acknowledges the employee experience beyond process.

High-reliability organisations demonstrate resilience through effective teamwork and cognitive functioning among their people.

Organisations can build resilience through specific organisational resilience training that equips employees with the psychological capital needed to be resilient during difficult times.

Organisations that regularly deal with fast-evolving situations—think SWAT teams and military commandos—know that it pays to prepare and practice whilst you have the luxury of time and resource. That’s easier than trying to learn to adapt in the eye of the storm.

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