Habits of Resilient Organizations

EcoTrust‘s blog/web magazine People and Place first issue is on Resilience Thinking, and features a number of articles on resilience including a interview with Brian Walker.  One interesting article proposes Six Habits of Highly Resilient Organizations:

1. Resilient organizations actively attend to their environments.
2. Resilient organizations prepare themselves and their employees for disruptions.
3. Resilient organizations build in flexibility.
4. Resilient organizations strengthen and extend their communications networks – internally and externally.
5. Resilient organizations encourage innovation and experimentation.
6. Resilient organizations cultivate a culture with clearly shared purpose and values.

The authors write:

Most companies live fast and die young. A study in 1983 by Royal Dutch/Shell found only 40 corporations over 100 years old. In contrast, they found that one-third of the Fortune 500s from 1970 were, at that time, already gone.

What differentiates success and failure, resilience and collapse? The Royal Dutch/Shell study emphasizes shared purpose and values, tolerance of new ideas, financial reserves, and situational awareness.

More recently, Ceridian Corporation collected best thinking and strategies to publish an executive briefing on organizational resilience. They highlighted the paradox that successful, resilient organizations are those that are able to respond to two conflicting imperatives:

* managing for performance and growth, which requires consistency, efficiency, eliminating waste, and maximizing short-term results

* managing for adaptation, which requires foresight, innovation, experimentation, and improvisation, with an eye on long-term benefits

Most organizations pay great attention to the first imperative but little to the second. Start-ups often excel at improvisation and innovation but founder on the shoals of consistent performance and efficiency. About half of all new companies fail during their first five years.

Each mode requires a different skill set and organizational design. Moving nimbly between them is a tricky dynamic balancing act. Disruptions can come from anywhere – from within, from competitors, infrastructure or supply chain crises, or from human or natural disasters. The financial crisis has riveted current attention, but it’s just one of many disruptions organizations must cope with daily. Planning for disruption means shifting from “just-in-time” production and efficiency to “just-in-case” resilience.

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