What qualities lead to organizational resiliency?
In the wake of the COVID-19 pandemic, leaders are increasingly focused on organizational resilience. Organizational resilience is the ability of an organization to anticipate, prepare for and respond to incremental change and sudden disruptions.
While it’s easy to see the value of this concept, it’s more challenging to identify the concrete actions and skills necessary to make an organization more resilient.
People often associate organizational resilience with the ability to “pivot” and be “agile” (words we’re all sick of hearing after the last year). But resilience is about survival, which doesn’t always entail change.
Overreaction is as potentially damaging as underreaction, especially if leaders make 15 changes at once without a strategy to evaluate their individual impact. It’s usually smarter to flex just enough to weather the current scenario, rather than overhaul the entire organization.
APQC identified six capabilities that help organizations meet the current moment and build for the long-term.
Organizational flexibly is the ability to rapidly shift strategy or execution to meet evolving circumstances and opportunities. In a world characterized by fast-paced change, flexibility is a huge competitive advantage that helps organizations capitalize on opportunities before they disappear and address risks before they turn catastrophic.
Flexibility reduces risk aversion, because taking chances is not only rewarded but also baked into the organizational culture. This, in turn, improves the speed of implementation because employees feel empowered to tackle problems and discuss issues.
One example of successfully enabling flexibility comes from oil and gas company TechnipFMC, which uses a flexible governance structure for its digital work. The structure combines an executive steering committee and central team with embedded digital leads who are empowered to identify and execute projects.
This allows TechnipFMC to tackle projects large and small without bogging everything down in layers of approvals and organizational inertia.
Innovation is the creation and application of ideas that add value to an organization’s internal and external customers. Innovation requires creativity, but there’s also a practical side to this capability. Organizations need to generate new ideas and be able to assess how these ideas will generate value. It’s the interplay between fearless creativity and practical application that really feeds organizational resilience.
Innovation can feel like a hard capability to cultivate, but there are concrete tactics organizations can apply to become more innovative. First, organizations need to give employees time and space to generate new ideas. Organizations must also provide structure that helps teams explore new ideas.
Health services provider Cigna, for example, set up cross-functional Agile teams to innovate based on the customer experience and provided them with training in design thinking. Establishing dedicated teams with a clear mission, methodology and training gave employees the permission and groundwork they needed to be more innovative.
3. Change management
In an environment where employees face an unending series of changes, change management is essential. The key to effective change management is to clearly articulate the need for and goals of the change and then keep that information at the forefront of all planning activities, training, and communications.
The bottom line is that people don’t change their behaviors just because someone tells them to do so. Successful change takes support, iteration and leading by example.
Change management is always about people. An excellent example of people-centered change management comes from electric utility cooperative Sunflower. Sunflower needed to secure buy-in for the rollout of its new enterprise resource planning, or ERP, system.
To address resistance, the organization’s change committee used the ADKAR methodology (awareness, desire, knowledge, ability, reinforcement) to gradually build awareness and move people through the change. The committee also used fun, bright communications and games to drive interest and celebrate successes.
Communication is sharing information in support of the organization’s mission, strategy and operations. Communication sounds simple, but it’s easy to get it wrong. Overcommunication overwhelms employees, whereas under-communication makes them suspicious.
It’s important to strike the right balance, especially when the organization is dealing with changes that require coordination and unity. Communication needs to flow quickly and across organizational silos so that people exactly know what to do and how to do it.
One organization that handles communication particularly well is the U.S. Army Corps of Engineers. USACE builds the infrastructure that protects citizens from floods and other natural disasters. In 2020, the organization was called upon to help with a new kind of crisis: COVID-19.
USACE needed to coordinate with various state and local groups to quickly convert convention centers and other facilities into makeshift hospitals. The organization was able to do so because of a strong communications infrastructure, which included a COVID-19 response dashboard that featured updates and summarized the operating picture for leadership.
It was that fast, transparent, one-to-many communication that allowed the organization to be resilient and get the work done.
5. Risk management
Risk management is the process of monitoring and reporting on risks as well as prioritizing, developing and implementing mitigation plans. Although risk management is often associated with risk aversion, good risk management is about taking the right risks at the right time.
To do that successfully, organizations need much more than a single risk-focused team. They need a strong risk culture with capabilities throughout the organization.
The predominance of black swan (rare and unforeseen) events has caused some to ask, “If we can’t predict something as impactful as COVID-19, what good is risk management?” The truth is that no one can accurately forecast everything. But, with the help of advanced analytics, organizations can model and plan for the most unlikely scenarios.
Grocery chain HEB, for example, started testing and modeling a pandemic response plan back when the bird flu hit China. When COVID-19 began to emerge, HEB was well-prepared.
6. Technology fluency
While facility with specific technologies is only fleetingly useful, technology fluency is an enduring capability. Technology fluency is the ability to assess a situation and determine when, where, and how technology can be applied to fix it or make it better.
Given the predominance of technology within organizations today, every team needs tech-fluent people to ensure the organization is consistently applying technology in the right places and not paying for unnecessary bells and whistles.
Organizations that successfully build tech fluency have change campaigns around it. Often, these campaigns focus on senior leaders, who tend to be the biggest holdouts. If you want your workforce to be more tech-fluent, you need to educate them, encourage them to experiment and maybe do a little hand holding. But that upfront investment is worth it to ensure people understand the power of technology and how it can help the organization prepare for and survive the next big wave of change.
While not every organization needs to be a top performer in all six capabilities, each provides intrinsic value to ensure resiliency.
Flexibility and innovation create a mindset and environment that empowers people to try new things, even in the face of adversity. Change management and communication help organizations proactively address resistance and rally people around change. Risk management allows organizations to stay cognizant of what could go wrong and prepare to react quickly to disruption.
And, because technology is a vital enabler of modern flexibility, tech fluency helps organizations evaluate their options and point the right tools at the right problems.
Holly Lyke-Ho-Gland is process and performance principal research lead, and Lauren Trees is knowledge management principal research lead, both at APQC.