Creating Resilient Organisations

The following appears in “Implementing an Effective Change Management Strategy” by Neryl East, MA, PhD, published by the Ark Group in association with Inside Knowledge.

While it might be admirable for organisations to strive to be resilient, change and strategic management specialist Teik Oh says resilience is not the end of the journey. Resilience is an element that needs to be embedded in the culture of the business.

He believes that can only be achieved if the organisation and its leadership demonstrate some fundamental behaviour that point to resilience.

Resilience is not only important in the hard times or during change. It must also be demonstrated when business is going well. That can be a challenge for many leaders, who Oh says are generally suited to only one style of an economy.

Many perform well when the economy is also doing well. Other leaders rise to the challenge when the economy does badly; Oh points out that it is relatively easy to think of great leaders who have turned companies around. However, they may not have been so successful when the business was back on track.

Oh says resilience needs to be a constant, rather than something that is brought in with change management. “If you can bring in that cultural resilience over time, the next time a crisis happens, hopefully you will react accordingly,” he says.

He cites the writing of Harvard Business Review senior editor Diane L. Coutu [http://hbr.org/2002/05/how-resilience-works/ib], who describes three key attitudes for resilient behaviour:

• To be able to face the truth without any ego
• To actually see the grand vision – the meaning and purpose of the organisation
• To be able to react quickly with whatever is at hand

In relation to the first point, Oh says leaders who have risen to the fore during good times are not always able to instil in their organisation the need to respond to a changing environment. Leaders who have an overly optimistic nature risk being blinded to the truth, and to believing that “we’ll be right, we’ll just keep doing what we’re doing.”

“People are looking at the positives, but do have to realise when things have changed,” he says. “You do have to face the possibilities. Ego has a great part to do with it. You have to have a clear sense of your own ego so you don’t rest on your laurels. It’s like being able to be on the dance floor at the same time that you are in the wings watching yourself dancing.”

Oh says a resilient organisation is one in which the culture allows people to honestly challenge each other. If they are able to do that within the organisational hierarchy, they will have a culture that allows the truth to be faced. Otherwise the culture is very dependent on the leader, and workers are likely to ask questions among themselves such as, “if it’s so good, why is this happening?” rather than openly questioning.

Oh believes being resilient does not necessarily come down to personality, and is something that can be learned.  It also reaches far beyond organisational reporting systems.

“An organisation can have good systems for monitoring its environment, and they display the truth, such as an accounting system showing a loss,” Oh says. “But the ability to challenge opinions adds another layer. If you bring forward that you have made a loss but everyone is very supportive and sympathetic, you try to soothe the pain and that’s when you start to get into trouble. You need that open and honest communication, with people being able to question why it’s happening, how long will it last. It’s about being prepared to face the tough questions and to ask them. Or is the organisation in hiding?”

Regarding Coutu’s second point, Oh is a strong believer in setting an organisational vision that is empowering and subscribed to by everyone. “If you’re going to shake up an organisation, you need to tell them what the whole horizon looks like,” he says.

“A non-resilient organisation lacks that longer term vision, and they attack current problems. One result of that is that the internal value systems change. For example, total customer service might have been a value, but if things go wrong, an organisation might sacrifice parts of its customer service system to save costs. If you’re doing that, you’re lost. Resilience has value systems that just don’t change.  If your values are right, they’re right in every situation. So, using the customer service example, even if the firm was losing money a resilient organisation would not use change management practices to reduce its customer service. You’ve got to find your savings elsewhere.”

Oh believes many organisations still lack that clear vision. “They have a vision statement, but it’s not quantifiable,” he says. “Often it’s just a flag they fly, without any real connection to the outcome and operations of the business.”

Clarity of vision has to come from management. “The organisation needs to be clear on what each sentence or paragraph means, and it must be linked to the Key Performance Indicators of the organisation,” Oh says. “It’s effective to combine the vision statement with something like a balanced score card; ‘When we’ve achieved our vision, what will our customers say about us? If we achieve it, what will our stakeholders think about it?’ You do that with people, and with processes. That way, someone down the line totally understands the big picture.”

Oh uses an example of NASA in the 1960s when the space agency was first trying to land a man on the moon. “A study group went around and talked to all the NASA employees, including the cleaners, and asked them if they had a boring job. They all said they had a fantastic job because they were helping to send a man to the moon!”

He says Coutu’s third point, to some extent, comes from the first two. An organisation that is true to its values and vision but is also able to diagnose problems with honesty, is able to react quickly and come up with innovative solutions. When rapid change is needed, an organisation can only react with the resources it has at the time.

“I think this is why many organisations don’t perform well,” he says. “They wait months before anything happens.”

“This element needs a culture of empowerment, so that the person who sees the problem feels empowered to bring it up. The way it filters down to the people on the ground depends on the leader’s ability to totally explain the vision.”

Oh likens the power of strong leadership in a resilient organisation to the scene depicted in a recent advertisement for logistics and delivery company UPS, in which a group of van drivers are following a UPS driver through a jungle, complete with bridge washaways and other obstacles. They follow because they know the UPS van will get through.

He says those strong qualities do not necessarily have to be stated. “For example, with the guiding principles or vision, the organisation may not say ‘we have a clear vision’, but people just act in a certain way from knowing what the bosses would do, and feel empowered to do so. They don’t say ‘oh, we have a strong values system’ but the way they act says that they do.”

“And it’s not necessarily the leader driving those organisations. I worked with one business with an extremely charismatic leader. In front of a group of people he could talk about where the company was going, but then organisationally he lacked the kind of operational structure to translate that into outcomes. People were inefficient because there wasn’t that central understanding of those values. They didn’t react quickly with what was at hand.”

Oh believes that to develop a resilient culture, an organisation needs to go back to basics. “They need to ask where they’re going,” he says. “They need to know ‘who have we got on the bus? Are they on the right seats? What kinds of processes are we using, and do these support looking at the truth? Are they aligned to the vision and values, and do these support or reward people who take those first two things and create an innovative approach?”

He reiterates that it is much harder for an organisation to implement cultural change when business is going well. “I have yet to see a client come to me and say ‘everything is OK but we need to change’. It’s usually in the middle of something,” he points out. “You read about great leaders and how, despite everything being OK, they keep changing. You might go too far, though. If you don’t have an impetus for change, what are you changing to?”

The good times, however, are the ideal period to begin developing resilient characteristics in the organisation’s culture “In the bad times, it becomes less likely that you’ll invite long term change,” Oh says. “All your attention is fixed on your short term problem.”

He says “resilience” has now been taken up as a catch phrase, in much the same way that “change management” was a hot topic in the recent past. He does not see them as separate topics. “You just need to build a good organisation, and that, surely is a resilient one.”

“There is a danger that if you think resilience is the next nice thing, you will build a resilient organisation separate from all the other things that create a good organisation. You have to see resilience as one of the characteristics of a good organisation. And that gets back to the leadership team.”

Oh says that even a few years on from the Global Financial Crisis, the jury is still out on which organisations have demonstrated that they are truly resilient. “There are a lot of things that muddy the water, like the government putting money into organisations,” he says. “They may well have been funded out of trouble. Where organisations have clearly come out the other end, perhaps unaided, I think you’ll find they already had strong corporate cultures, which would then have displayed those three resilient attitudes. They survived, not because they were resilient, but because they were already strong corporate cultures with good leadership.”

“That’s a lesson for any organisation. You don’t need an initiative to create resilience. You want to change your company to the type of structure and culture you want, and in that you’re creating resilience.”