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What Is Organizational Resilience And Why Is it So Important?

by | Mar 8, 2018 | Blog, Organizational Resilience |

How we perceive stress can be just as important to how we cope with it as the amount of stress we’re actually experiencing. While this statement was concluded from a 2013 Harvard study involving people, the same idea can be applied to the ability for an organization to handle stress, or its level of organizational resilience. However, it is important we develop a better understanding of organizational resilience, before discussing it any further.

What is Organizational Resilience

According to the Benchmark 2003 Harvard Business Review Article, The Quest for Resilience by Gary Hamel and Liisa Välikangas, resilience in an organizational context is about the perpetual anticipation and adjustment to “deep, secular trends that can permanently impair the earning power of a core business. It’s about having the capacity to change before the case for change becomes desperately obvious”. Essentially what this means is, organizational resilience is about being proactive, not reactive.

It is important to note that this understanding of organizational resilience highlights that it is not about reacting to one-time crises or rebounding from a setback, it is a holistic shift in how an organization operates.

Resilience Is Proactive, Not Reactive

The landmark 2003 Harvard Business Review Article should be seen as a call to action for enterprises. As the pace of disruption increases in the digital era, organizations are struggling to keep up. The marketplace is faster-paced, more competitive and increasingly complex leading to enormous amounts of lost wealth for those not ready to adapt.

As Charles Darwin noted, “it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”, and this truly resonates with corporate survival as well. The life expectancy of public firms has shortened from 75 years to less than 15. The traditional business model can no longer survive by simply reacting to changes, change must be anticipated and organizations must be agile enough to act on it.

The Management Revolution

Building strong Organizational Resilience begins with the decision-makers in an organization. Management teams that focus on collaborative solutions where everyone is connected to everything, everywhere and all the time, are the leaders in today’s marketplace.

These organizations are generating a world in which individuals, insights and resources interact in real-time, effortlessly and cheaply. They are creating new markets, new customers and new opportunities.

The management revolution for the organizations that can operate like this is rewarding for both themselves and their customers. However, for organization’s that are yet to adapt, the revolution is daunting and a real threat to their corporate longevity.

If you don’t believe this revolution is taking place, take a look at the five largest firms in the world by market capitalization as a testament. The lumbering giants of the 20th century are being replaced by organizations championing new management ideas and leading innovation in their industry: Apple, Facebook, Google, Amazon and Microsoft.

While your organization may not be directly comparable to these industry giants, the principles they apply and their understanding of organizational resilience is sound and should resonate with all business leaders.

The Role Of Software

It is important to note that the management revolution did not happen overnight. It emerged many decades ago, yet saw a dramatic proliferation as the breakthrough of software occurred in the digital era that is still persistent today. New technology began empowering the organizations that were ready to adapt and disrupt in new, exciting and innovative ways, leaving their competitors scrambling to keep up.

As the digital era continues to see a mass-adoption of organizations integrating software into their business operations, self-induced digital disruption has become mainstream. Individual employees, teams and entire organizations are able to adapt efficiently to new business processes to meet the rapid pace of technology, end-user satisfaction and new business opportunities. What this means is that non-customers are turning into new customers and new markets are perpetually being established by existing organizations.

Organizational Resilience has transgressed from a guideline for good organizational practice into a tool for disruption and innovation. No longer is Organizational Resilience just about the separate processes and functions of an enterprise such as security, disaster recovery, risk management and business continuity. Organizational resilience is now about a collaborative approach between all stakeholders to deal with risk, mitigate threats and seize opportunities in new and innovative ways and the processes that empower them to do so.

Organizational resilience means a harmonious integration of all business functions to enable proactive organizational decision making.Therefore it is essential that separate functions of Governance, Risk and Compliance are integrated into your organization’s business objectives through software. 

In The Pursuit Of Organizational Resilience

In today’s landscape, Organizational Resilience is a strategic imperative for corporate survival. It cannot be looked at separately from organizational objectives or processes. The archaic view of Organizational Resilience as simply inputting functions and applications that mitigate risk into everyday business operations is inadequate.

Organizational Resilience is an earnings driver. Apple, Amazon, Google, Microsoft and Facebook have become leaders in industry because they anticipated existing market needs and created new markets by understanding their internal and external corporate environments. They were able to anticipate and catalyze market change and adapt before it became fully realized by the rest of the market. They were not reactive to changes, like their competitors, instead, they were proactive.Their risk appetite, drive for innovation and ability to self-disrupt were integrated into their organizational objectives and vision of the future, allowing them to proceed with confidence into the future of their industry.

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