Designing resilience

I've just been listening to a talk by Martin Reeves on building 'resilient businesses that flourish in the face of change' that speaks to 6 principles – prudence, adaptation, embeddedness, modularity, redundancy, diversity – of organizational sustainability based in biological principles. Someone sent it to me last week saying, 'While the subject is not new, the topic is presented in a really cogent, insightful and engaging way'.

It was a timely send, because next week I'm facilitating a conversational 3-hour session on 'change resilience' and am getting materials together to do that. Originally, I was thinking about three segments: organisational resilience, team resilience, personal resilience. These are three aspects of resilience touched on in a booklet 'Engagement, Resilience, and Performance' which I was given this week. (Thanks Paul). It's a free resource – fourth down in the books list on the website.

Now I'm thinking of including a fourth segment on cultural resilience which is less often discussed 'Cultural resilience considers how cultural background (i.e.culture, cultural values, language, customs, norms) helps individuals and communities overcome adversity. The notion of cultural resilience suggests that individuals and communities can deal with and overcome adversity not just based on individual characteristics alone, but also from the support of larger sociocultural factors.'

Definitions of resilience vary depending but most of them refer to the process of adapting well in the face of adversity, trauma, tragedy, threats.

In "How Resilience Works,", an HBR article (well worth the read), Diane Coutu says "Resilient people possess three characteristics -— a staunch acceptance of reality; a deep belief, often buttressed by strongly held values, that life is meaningful; and an uncanny ability to improvise. You can bounce back from hardship with just one or two of these qualities, but you will only be truly resilient with all three. These three characteristics hold true for resilient organizations as well….Resilient people and companies face reality with staunchness, make meaning of hardship instead of crying out in despair, and improvise solutions from thin air. Others do not."

The question I have about many of the definitions is that they use the phrase 'bounce-back'. To me this implies ending up at more or less the same place that you started at before the trauma, stress or adversity. Which, in turn, suggests a lack of learning and adaptation.

Yet many writers on resilience talk about it as learning from the situation, while others suggest that the learning is linked with your innate way of perceiving adversity: 'Do you conceptualize an event as traumatic, or as an opportunity to learn and grow?' Read How People Learn to Become Resilient for more on this.

Either way, the learning aspect is critical I think and comes up in Reeves's talk when he's comparing Kodak and Fuji. 'Speaking of company failures: we're all familiar with the failure of Kodak, the company that declared bankruptcy in January 2012. Much more interesting, however, is the question: Why did Fujifilm — same product, same pressures from digital technology, same time — why was Fujifilm able to survive and flourish?' He suggests that one of the reasons is its ability to adapt. Learning is one of the primary means to effect social or cultural adaptation. (Biologists see 'adaptation' through a different lens).

It's too simple to say that Fujifilm or any organisation are entities that can 'learn' or 'adapt' in their own right. Organisational resiliency is expressed both through the attributes of its employees and through the systems, processes and values that will support resilience.

Martin Reeves tells the story of the Japanese company Kongo Gumi that was after 1,428 years the oldest continuously operating company in the world. However, 'it borrowed very heavily during the bubble period of the Japanese economy, to invest in real estate. And when the bubble burst, it couldn't refinance its loans. The company failed, and it was taken over by a major construction company. Tragically, after 40 generations of very careful stewardship by the Kongo family, Kongo Gumi succumbed to a spectacular lapse in the ability to apply a principle of prudence'. This wasn't due to the company's lapse. It was down to the individuals running it and to the processes and systems that should or could have kept it 'prudent'.

So, what are the organisational design implications of resilience? I've noticed three from the trawl of info:

  • Design systems and processes to deliver against a strong set of organisational values (e.g. Johnson & Johnson's credo). For example, a value of 'collaboration' would involve structures that enable conversations, processes that reward collaboration, systems that facilitate collaboration.
  • Review the design very frequently to check it is adapting to the changing context. (You can use Peter Drucker's planned abandonment exercise. Available on my website here).
  • Design functions and processes for a) 'horizon scanning' b) pattern analysis in order to get early warnings on adapting. (Design methods that won't allow ignoring the warnings – see the Nokia story).

How would you design for resilience? Let me know.

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