Business resilience is a concept with a new meaning in a Covid-19 world. It has been defined by the National Association of Corporate Directors (NACD) as “the capacity of any entity to prepare for disruptions, to recover from shocks and stresses, and then to adapt and grow from a disruptive experience.” Resilience is the demonstrated ability to move forward – better. Numerous technical standards give their own definitions of resilience, such as ISO 22316:2017, which describes resilience as an ability and, more specifically, the capacity to absorb and adapt in a nonstatic environment to deliver its objectives while surviving and thriving.
Within the world of technology, ITIL 4 also recognizes resilience as an ability. It occurs when an organization can predict, prepare for, react to and adapt to minute changes and sudden impacts from external sources. Similar to NACD, ITIL 4 acknowledges resilience as the ability to take a hit, get back up and move forward.
Disaster recovery plans are associated with security breaches, fires and hurricanes. But resilience is about survival and adaptation. A common interpretation of Darwin – “survival of the fittest” – belies a more academic understanding which cites adaptability as the trait associated with surviving. If you take a moment to ponder the difference between fitness versus adaptability, it should be clear that they are not the same concepts.
If you are running a business today, you have likely lived through the October 1987 crash, 9/11, 2008 and now a global pandemic. Black-swan events are a part of life, just not every day.
When you comb through the numerous definitions and examples of business resilience, what stands out is that it is about how a group of people deals with adversity, communicates on priorities and risks, and makes decisions in order to move forward, all despite a lack of information, amid great uncertainty and likely in great peril.
Resilience is an absolute measure of the management team’s ability to manage change and uncertainty. There is a reason people say that “it’s all about the people.” Leadership needs to be able to manage the team in the moment, much as a captain steers a ship through a storm.
To be better prepared for the next event, ask yourself these three questions:
What did your team do better than expected during these stress periods?
You should get input from your team on this one, and then synthesize what the numerous examples really point out. Was it just a few heroes solving the big problems, or did everyone pull together?
Critically, listen to what people are not saying. That is usually the most important takeaway from this type of exercise. For example, you may hear, “Wow, the leadership really stepped up and showed us the way forward. We could not have done it without them,” or “We were really scared about what was going to happen, but working with our management made a bad situation much easier to deal with.” If you are not hearing this, why not?
Where were you blindsided when you should have been prepared?
If so, do you understand why? Was it due to systemic issues or unrelated causes? Were they foreseeable at all? What was the flaw in your risk management system that caused these issues to be surprises, and what part of the system is so broken that it allowed this to happen? If the cause of the issue is within the boardroom and not the management team, how is the board getting feedback and being held accountable to protect ownership?
What aspects of your culture and governance need to improve so that you have greater resilience in the future?
Everyone knows culture is the straw that stirs the business’s drink, but there are no obvious levers to pull to make changes. Especially with culture, change has to come from the top of the organization. The old saw is that “children watch what you do, not what you say,” and that is also true in a business setting.
Introspection and the ability to challenge yourself with intellectual honesty are the hallmarks of critical thinking. They require discipline and are likely to be uncomfortable, but they need to be done.