WHY should you consider Organisational Resilience?
Updated: Jan 23, 2021
No business stays the same, and no business operates in isolation.
Any business contains one or more operational entities, referred to as the "organisation" responsible for delivering business goals. Organisations comprise an "internal" ecosystem with many interlinked components and are most prosperous if both vertical and horizontal alignment exists between such components. Vertical alignment ensuring all levels within the ecosystem deliver on aligned goals to achieve a predefined purpose. Horizontal alignment provides a balanced workload where all tasks are efficiently delivered to enable the next team within the value chain.
Alignment within the internal ecosystem can be impacted by incremental or evolutionary changes implemented to improve the operational capability efficiency; or, to cater to strategic shifts in the business or resource models. The internal ecosystem can suffer increased complexity when such changes are planned in isolation and not optimally implemented. Subsequent changes to complex environments are mostly unpredictable and can even lead to chaos in extreme situations.
Therefore, to retain an organisation's performance and prosperity, it is essential to perform regular optimisation (resilience) exercises to enhance the alignment and reduce the internal ecosystem's complexity.
Organisations operate within an "external" ecosystem comprising customers, competitors, partners, suppliers, and regulators. The behaviour and performance trends of players within the external ecosystem are not within the organisation's control but can substantially impact its performance and prosperity. Adverse situations, such as the current COVID pandemic, can also affect the organisation and all external ecosystem players.
Examples of such impacts are:
· Product/service features valued by customers, such as pricing models, order and delivery channel preferences, and social interaction requirements; or,
· Customer's buying power can reduce significantly, severely impacting the organisation's income — primarily where the organisation mostly serves only a few large business-type customers.
· Competitors can disrupt the market by satisfying the needs of customers innovatively while adding new value types not generally found in the industry; or,
· Barriers for entry typically introduced by regulators to protect the marketplace may be subjected to policy changes to stimulate the economy.
· Partners and Suppliers
· Partners and suppliers may experience performance problems of their own, or interim regulations could restrict their ability to support the organisation's supply chain as before; or,
· Partners and suppliers may not keep up with technology advances, and their products may therefore no longer fit the organisation's needs.
Similarly, for an organisation to retain or grow its position in the marketplace, it is essential to perform optimisation (resilience) exercises to realign the organisation with its external ecosystem.
The internal and external optimisation (resilience) exercises must inform the strategic planning within an organisation and be executed as part of a formally planned project.
In closing, it may be prudent to review the causes identified by Joseph A. Tainter (author of "The Collapse of Complex Societies") as the reasons for the demise of great civilisations. Tainter defines great civilisations as complex societies characterised by centralised decision making, high information flows, excellent coordination of parts, formal channels of command, and pooling of resources to provide support services. He queries their demise – "With their administrative structure, and capacity to allocate both labour and resources, dealing with adverse environmental conditions may be one of the things that complex societies do best. It is curious that they would collapse when faced with exactly those conditions they are equipped to circumvent." And then continues with the following proposition – "One supposition of this view must be that societies sit by and watch encroaching weakness without taking corrective actions." Tainter then concludes by proclaiming the root cause to be failures in group decision-making because of one or more of the following factors:
· The group fails to anticipate the change/problem before it arises;
· When the change/problem does occur, the group still doesn't perceive it;
· The group may not be able to define an adequate solution for the problem; and,
· They may not be successful in implementing the solution.