How to Increase Your Organization's Resilience
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Volume 5.6 Table Of Contents
- Three Commonalities of the Most Resilient Organizations
- Trend Watch: Increasing Adoption of Risk Management Systems
- Short-Circuit Unproductive Conflict
- Announcing "The Art of Resilience": A New Keynote / Offsite Retreat Topic
Welcome Back! What is the most critical factor for accelerating progress in a roller coaster economy? Resilience - the ability to recover quickly from adversity. This issue of the Harper Report discusses what you can do to increase your organizations' resilience, regardless of the economy.
Three Commonalities of the Most Resilient Organizations
As I've worked with companies to help them accelerate progress, I've noticed commonalities in leadership between organizations that are the most resilient. How do you rate your leaders on the following factors?
- Balanced perspective: While leaders of resilient organizations acknowledge bad news from the media and analysts, they do not immediately make drastic cuts or dramatically alter their strategy. Instead, they gain additional perspective before taking action so they have a fuller understanding of the challenges they face. They seek input from employees, customers, suppliers, outsource providers, alliance partners, and others who impact or are impacted by the situation. Often times, this leads to unexpected insights and more innovative responses.
- Flexible thinking: Leaders of the most resilient organizations encourage flexible thinking. They recognize that while there are significant challenges to overcome, adversity also presents opportunities to evaluate new ways of achieving long-term performance objectives. For instance, when the board and management team of a company faced with soaring production costs explored their options to address the situation, they realized they could generate a significant savings by leveraging their strong cash position to acquire rights to produce the product themselves with a three year return on investment. The supplier needed the cash and was glad to make the deal. In this case, flexible thinking and the willingness to challenge assumptions enabled the organization to develop a solution that helped them more effectively deal with the immediate crisis as well as become better positioned to meet long-term performance objectives.
- Foster a culture of long-term performance: Especially when times are tough, leaders who focus on promoting a culture of lasting value create organizations that not only survive, but also thrive. They encourage new ideas and actions to improve effectiveness and efficiency. They also ensure that employees are up to date on the knowledge and skills they need for peak performance. For example, Toyota is using the down time in some of their plants to train line workers on quality improvement. While you can't control the economy, you can control internal issues such as improving leadership, management, and teamwork so that your company can dominate the market.
Bottom line:When faced with hard times, rather than hunker down and wait for better times, the most resilient organizations have leaders who are primed to make the best of reality as it currently exists. They go out of their way to seek multiple perspectives from stakeholders, lead their organizations to find new ways to use the twists and turns to their advantage, and promote an environment that is focused on creating lasting value. If you have questions you would like to ask me about ways to gain and integrate stakeholder perspectives, how to increase flexible thinking, or ways to foster a culture of long-term performance, post them on my blog here or contact us.
Trend Watch: Increasing Adoption of Risk Management Systems
Along with accepting reality and creating new opportunities to achieve objectives, the most resilient organizations also have a robust system for managing risks. On a positive note, as conditions become more turbulent, leaders have a greater incentive to make adopting effective risk management sustems a higher priority. Fiscal Doctor Gary Patterson http://www.fiscaldoctor.com) observes that while leaders have recognized the need for risk management systems, too many have been slow to adopt them. He warns.
"When the economic climate changes as dramatically and as frequently as it seems to be nowadays, risk management should be on every executive team's agenda. Don't ignore the warning signs and watch your ship go down. Face your risks squarely and come up with a flexible Enterprise Risk Management plan. Don't wait for Mayday!"
The best risk managers are able to pick up on a large variety of signals indicating opportunity and danger in their company and in the general business environment. In addition to monitoring financial warning signs, it's essential to monitor organizational signs that can indicate progress as well as trouble ahead. In fact, I've found that when I address problems in companies (e.g., decreased demand for products/services; organizational firefighting, low morale, and conflicts between departments and divisions) there are often patterns and themes between seemingly unrelated problems. When a number of these issues build up over time, even the best-laid plans can end up in what I call "strategic gridlock": persistent problems that grind progress to a halt.
For example: in one company, persistent conflicts across departments were negatively impacting the success of their strategy. Upon investigation, we discovered that unresolved issues among the executive team regarding individual roles and responsibilities following a reorganization. Once we resolved the issues at the top, many of the conflicts between departments were also resolved. There was no need to further adjust the strategy, and momentum was restored.
Could gridlock be building in your organization? For a sample of warning signs of gridlock, click here.
Bottom line:Adopting a multi-faceted approach to risk management that includes both financial and organizational indicators of progress and warning signs is a key component of building a resilient organization. It's easier to distinguish between truly innocuous problems and danger signals when you have established your organization's level of risk tolerance, and have a way to regularly check for changes that would trigger a need to adjust strategy. If you have any questions regarding how to manage organizational issues that can impact the resilience, post them on my blog here.
Short-Circuit Unproductive Conflict
Resilience in organizations can be hampered by conflicts that persist and escalate over time. While the source of these conflicts can seem mysterious, many of them can be attributed to one or more of the following reasons:
- Addressing the wrong issue: Conflicts often mask deeper issues. For example, several departments that needed to interact collaboratively were continuously at war with each other. Employees had already gone through extensive team training, including conflict resolution techniques. Although the conflicts temporarily subsided, they returned a few weeks later. When we finally uncovered the reason for the gridlock, it turned out that executives of both departments had strong formal and informal incentives to keep the departments operating in functional silos. Once these underlying issues were addressed, both departments bounced back and were able to better use the training they received to improve upon their productivity.
- Cultural blind spots: As businesses develop key relationships with customers, suppliers, alliance partners, and outsource providers based in different countries, there is more potential for conflict based upon cultural misunderstandings. Different values, beliefs, and customs can show up in everything from agreement on objectives, priorities, and timelines, to the way meetings are conducted, to decisions on roles and responsibilities. Many leaders have told me that gaining a better understanding not only of other cultures, but of their own cultural biases, has provided them with essential information that minimized "us" vs. "them" problems and enabled everyone to accelerate progress.
- Lack of buy-in: At the heart of many persistent conflicts are common but mistaken assumptions we tend to make about our organization's willingness to execute new strategies and initiatives. For example, a rapidly escalating conflict between a manager and his department came from the mistaken assumption that employees understood and were willing to execute the department's new cost containment objectives. Once employees understood the context behind the new objectives, they were willing to take on additional responsibilities in order to save money. I've found that the more others understand the reasons behind what they are being asked to do, and can influence some aspect of the decision, the more likely they are to buy-into new priorities.
Bottom line:Resilience increases when your organization minimizes time spent in unnecessary conflict. Gaining a better understanding of the underlying issues and others' perspectives can go a long way in avoiding conflict or minimizing its impact. If you have questions about how to better address conflict, please click on my blog here.
Announcing "The Art of Resilience": A New Keynote / Offsite Retreat Topic
If you lead a company, association, or nonprofit group, this topic is for you. You and your colleagues will gain insights and ideas you can immediately use to help your organization not only bounce back faster from tough challenges, but "bounce higher" than you ever thought possible. We will discuss ways to
- Respond to economic upheaval without sacrificing long-term objectives
- Find hidden opportunities for growth and profitability
- Increase your credibility with stakeholders in the middle of chaos
- Foster a culture committed to creating lasting value
To book a date or for more information Contact us.