Resilience is a term that gets thrown around a lot these days in the global business community. From third-party business analysts to chairs of boards of directors, you will hear frequent claims that that resilience is a top attribute in the best-performing companies. ‘When the going gets tough,’ they will tell us, ‘the tough have to get going.’ But how exactly does the tough get going? What are the key attributes of a resilient organisation and how do they cultivate and sustain that resolve in the face of mounting challenges? Does resilience begin at the individual or organisational level?
For many in the business world, the concept of resilience is quite nebulous. Ask for specifics, and you’re likely to get a potpourri of definitions.
Some will argue that resilient organisations must be agile and comfortable with risk.
Others will posit that a truly resilient organisation is one that is constantly assessing the effectiveness of its business plan and has the courage to make the changes in course necessary to deal with demands for constant transformation. One that accepts and manages risk so that it can prepare for any future emergency.
Still others believe true resilience is the ability of individuals or organisations to constantly change or adapt as market conditions change.
The harsh reality is that it’s hard to know exactly how to build resilience, particularly in an organisation that may not be predisposed to displaying it on a regular basis, because it’s very hard to define.
To get closer to a definition of resilience and best practices for its promotion, LHH surveyed 700 senior HR professionals across seven European countries to gauge the major challenges they face and the strategies they are using to respond. The survey attempted to capture the issues that challenge organisational resilience, and some of the strategies being employed to meet those issues head-on.
The challenges that test organisational resilience
There are a great many environmental factors that are testing the resolve of organisations today. The survey found that the biggest challenges to organisational resilience come from two sources: there are workforce transformation forces that originate from within organisations; and other factors outside the reach of organisations that are largely beyond their control.
Internal challenges include things like increasing demands in the workforce for flexible working conditions (60%) and managing the consequences of an aging workforce (41%). Factors beyond the control of most organisations include increased government regulation (56%), and general political uncertainty (48%).
However, despite acknowledging the challenges they face on a day to day basis, those same organisations rate their capacity to respond to those top challenges as being very lowAlthough 60 per cent of organisations identified the increasing demand for flexible working conditions as a top concern, only 30 per cent said they were actually prepared to meet that challenge. The same trend was established with other major challenges. Nearly half of respondents identified government regulation as a concern, but only 31 per cent felt they were prepared for that challenge. Overall, respondents felt they were best prepared to meet the issues like the impact of digital transformation (77%). This reflects the fact that most organisations have developed strategies to prepare themselves for the disruption that comes from new digital technologies, something that has been a strategic, top-of-mind issue for many years. Still, in most categories, the trend is very clear: at best, only half of organisations believe they are well placed to manage the most challenging issues they face on a day-to-day basis. By any measurement, that is a troubling result.
Only half of organisations believe they are well placed to manage the most challenging issues they face on a day-to-day basis
The relationship between resilience and risk
There is no such thing as a risk-free business environment these days. All organisations face risk, although some face it on more of a regular basis than others. However, if the pace of technological transformation has proven anything, it is that at some point, all businesses will be faced with a ‘change or perish’ challenge.
Our respondent organisations rated themselves as generally well-placed to respond to risk. Nearly six in 10 organisations (59%) said they welcomed various degrees of risk. Still, that leaves 41 per cent as either moderately or severely risk averse. The connection between risk aversion and resilience is fairly well established. In other words, less resilient organisations try to avoid risk and in so doing, often fall behind their competitors. More resilient organisations tend to welcome risk, and the rewards that come from turning a business crisis into a positive business opportunity. But that’s not all. Truly resilient organisations accept risk but also have good structures in place to manage risk. That balance between courage and thoughtful planning is what allow some organisations to rise above their competitors. For those organisations that have demonstrated resilience in the face of a business crisis, the rewards are immense. More than half (53%) of respondents indicated that they had turned a potential crisis into increased business growth. Another 46 per cent said they saw a positive impact on their bottom lines. Other benefits included expanding into new sectors (37%), retaining top talent (36 per cent) and improvements to overall customer experience (34%).
How are organisations building resilience?
Part of the challenge of building resilience is that no one programme or strategy will fill an organisation’s need, particularly if that organisation has done very little to identify specific measures to meet specific challenges. Nearly all respondent organisations are taking up the challenge to build resilience in the face of mounting threats and challenges. However, specific programmes to boost and sustain resilience are not widely applied. And those that are in place seem to be suffering from a significant disconnect where what is being done is not actually related to resilience.
Broadly speaking, organisations believe the keys to building resilience are connected to leadership. Just over half (55%) or respondents identified the ability to inspire innovation as a key capability for building resilience, followed closely by collaborative leadership (51%) and building resilience into company culture (47%).
Only half of organisations have specific practices in place to build resilience among their workforcesThe top strategies included team-based training (56%), company-wide social activities to boost morale (51 per cent) and individual skills training/development (49 per cent). Respondent organisations also identified their top wish list for programmes that promote resilience. They included leadership development focused on people (56%), overall training (48%) and employee (engagement).
These results demonstrate a somewhat profound disconnect between what organisations believe are the best strategies to build resilience, and what they are actually doing. In fact, there is a strong suggestion in the results that organisations largely do not know exactly which programmes produce the best results in the cultivation of resilience. Or, that they may in fact be pinning their hopes on initiatives that do little or nothing to promote true resilience. For example, social activities may provide a pleasant distraction from the stress of facing today’s business challenges, but these events have a limited connection to resilience and have largely been proven to be ineffective at building engagement. Social activities can be a meaningful part of a larger resilience strategy. However, in order for social events to make a contribution, they need to occur on a regular, ongoing basis and must be closely connected to the culture of the organisation and leadership behaviour. Otherwise, they can do more harm to engagement and resilience than good.
Best practices: building resilience that lasts
Break down the challenges that organisations face – the things that truly test their resolve in the face of adversity – and you can see that there is no one-size-fits all solution. That having been said, there are several ways in which an organisation can lay the foundation for true and lasting resilience:
- Resilience requires a dual-track strategy. Resilience is both an organisational and individual capability, and our research demonstrates that you cannot have one without the other. For example, work must be done to cultivate individual resilience through mindfulness training, which is quickly become standard in progressive organisations. It is bolstered with an organisation-wide commitment to building resilience into its leadership culture. A strategy that is too specific (focused only on individuals) or too broad (utilising vague mission statements and calls to arms) will do little to establish true resilience.
- Understand the relationship between risk and resilience. A risk-averse organisation is almost by definition a place where resilience is in short supply. Avoiding risks is, in fact, one of the principal responses from an organisation with leaders who simply do not have the resolve to face a crisis and turn it into an opportunity. Developing individual and organisational capacity to embrace risk will almost certainly result in a company that is inherently resilient and unafraid to tackle the next great challenge that comes along. A resilient company is one that looks at a crisis with an eye toward identifying new opportunities.
- A culture that embraces the principles of transformation will almost certainly become more resilient. Along with resilience, the term “transformation” is top-of-mind for many organisations facing the need for continuous change and re-invention. As is the case with risk, developing a specific strategy to embrace transformation will go a long way to creating enhanced resilience. This means promoting innovation, diminishing the fear of failure, and looking for leaders who have the ability to look to the future. These leaders will exude confidence and resilience, which will help promote it among the entire workforce.
- Continuous learning is key. Focused, specific resilience training on an individual basis can go a long way to building a culture where staff are unafraid of change or risk, manage ambiguity and always focused on the future. The goals of continuous learning – which should focus on the skills and capabilities needed for true resilience – should be mirrored in the talent acquisition strategy. Organizations that need to become more resilient need to use the entire HR cycle – hiring, developing, engagement strategies, retraining and retention programmes – to identify and promote a resilient workforce.
- Learn to embrace, not fear, flexible work. A workforce that is tired, overly stressed and fearful of the future is not going to demonstrate much in the way of resilience. Organisations must adopt broad strategies to help their human capital manage the stress that comes with constantly staring down adversity. Flexible working arrangements, where employees are given some control over their work conditions/terms, help promote a sense of well-being. Although our study showed that these arrangements are a source of anxiety for some organisations, flexible job structures mitigate employee stress. And that’s a solid way to help stoke resilience.
Employers spend a lot of time debating the origins of resilience. Is it something that is inherent in an individual, bred in the bone as it were? Or, can it be cultivated and nurtured? The answer is both.
The resilience study shows that organisations acknowledge the importance of resilience but aren’t doing enough to find people that are more naturally predisposed to resilient behaviour. Nor are they doing enough to cultivate resilience in those people for whom it does not come naturally.
The good news is that thoughtful planning, and focused training, can help boost an organisation’s overall resilience rating. And that will help organisations find the opportunity in the adversity.