What is Organisational Resilience?

Business Continuity and Organisational Resilience are distinct and complementary functions that together seek to achieve the same goal: an organisation that is prepared for, able to withstand and recover from major disruptive events that impact on service/product delivery.

This article explores Organisational Resilience and the role it plays in creating organisations that are better equipped to survive and thrive in disruption.

The basics: What is Organisational Resilience?

‘Resilience’ is the amount of shock that a state (such as an ecological system or organisation) can withstand or absorb before if breaks down or fails (Holling, 1973).

Organisational Resilience as a concept has come to the fore in recent years, challenging existing thought on highly process driven approaches to developing an organisation’s ability withstand and recover from major disruption and emergencies.

There isn’t a single accepted definition of Organisational Resilience, perhaps demonstrating a vagueness of concept that is both difficult to describe and harder still to implement.

The British Standards Institute and Cranfield University’s School of Management working in partnership to lead UK research and guidance on Organisational Resilience have defined Organisational Resilience as:

“The ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper.” (David Denyer, 2017)

Cranfield University does emphasise that Organisation Resilience isn’t just about developing an organisation that is capable of withstanding emergencies, but any changes to the environment that effects that organisation and therefore more a strategic model of reacting to change and exploiting opportunities.

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For more information on business continuity management and organisational resilience, please see other mistofmanagement.net articles on business resilience and continuity planning, including:

• What is Business Continuity? An introduction to Business Continuity as a concept and programme of work
• Preparing your business for emergencies and disruption – key tips and ideas for improving the resilience of any business or organisation for disruption and emergencies
• What is Organisational Resilience? – an exploration of ‘organisational resilience’ as a concept and how it complements Business Continuity Planning
• Free Business Continuity Plan template (BCP) – A free template BCP and general advice for any organisation seeking to develop a Business Continuity Plan

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Organisational Resilience in Business Continuity?

The Business Continuity Management community claim that Organisational Resilience as a concept is and always has been at the heart of the Business Continuity Management. In fact, it features in the Business Continuity Lifecycle under the title ‘Embedding’, which the Business Continuity Institute defines as:

“Building resilience and business continuity practices into the heart of the organisation and its day-to-day business as usual. This can be done through communication, training, practice and spreading awareness.” (Business Continuity Institute Good Practice Guidelines, 2018)

Admirable in its inclusion, this definition fails to address the complexities of organisational transformation and culture change required to achieve this successfully. Simply, one cannot change the way an organisation behaves by introducing extra steps into processes, providing additional training and telling people how to think and what to believe. Organisational Development and culture change are complex disciplines, with programmes that span years of focused activity to deliver organisational cultures aspired by organisations.

The term ‘Organisational Resilience’ has been adopted by parts of the Business Continuity community as a new, hip, and exciting buzz-word to re-market old, tired ‘Business Continuity’ principles as exciting, corporately focused, strategic functions. This often fails to appreciate the opportunities that Organisation Resilience as a separate concept can bring. A quick look at Google search listing for Organisation Resilience will reveal a long list of consultancies selling repackaged Business Continuity processes with added ‘strategic’ and ‘dynamic’ phrases.

You can learn more on the Business Continuity Institute’s approach to organisational resilience here: Introduction to Organisational Resilience (more on Business Continuity is available here).

An alternative definition:

The definitions provided so far include unnecessary detail on methodology (‘foresight’, ‘situation awareness’, ‘prevention’) that indicate a misunderstanding of the subtlety of ‘resilience’ as an intrinsic characteristic of organisational culture, leadership, strategy and process.

According to Gary Hamel and Liisa Välikangas in The Quest for Resilience (2003), resilience in an organisational context is about continuing adaptation: “Strategic resilience is not about responding to a onetime crisis. It’s not about rebounding from a setback. It’s about continuously anticipating and adjusting to deep, secular trends that can permanently impair the earning power of a core business. It’s about having the capacity to change before the case for change becomes desperately obvious.”

From this perspective, Organisational Resilience is not specifically about surviving traumatic shock, it’s about absorbing and responding to any disruption, including macro-economic, market, competitive and environmental changes, as well as traumatic shocks of emergencies and disasters.

A proposed definition of Organisational Resilience reads:

“Organisation resilience is a strategic and holistic concept for building intrinsic systemic resilience by developing an organisation’s ability to withstand and thrive in any dynamic situation. It is not about the crisis; it’s about developing the culture, adopting technology, embracing management styles and strategies that allow the organisation to flex to any situation, absorb the force created by disruption and adapt to the new environment successfully.”

To increase the survivability of an organisation, either:

• the quantity of (traumatic) shock it experiences needs to be reduced, or
• its ability to absorb (traumatic) shock needs to be increased, or
• the amount of time it has to recover needs to be increased.

Therefore, a business’ ability to survive disruption can be written in the following equation:

If this equation returns a value less than 1, then the system fails.

Clearly, there is very little an organisation can do to reduce the quantity of shock an organisation experiences (especially unknown-unknowns as per Johari’s Window). Similarly, the amount of time available to recover or ‘rebound’ will largely be dictated by market or regulatory factors. Both of these are external to the business.

However, an organisation can influence it’s ability to absorb that shock.

Organisational Resilience seeks zero-trauma transformation

“The goal is an organization that is constantly making its future rather than defending its past. The goal is a company where revolutionary change happens in lightning-quick, evolutionary steps… In a truly resilient organization, there is plenty of excitement, but there is no trauma.” (Gary Hamel and Liisa Välikangas, 2003).

The ability of an organisation to rapidly change in revolutionary ways in response to impending or realised disruption in a ‘no-trauma transformation’ at first feels highly unrealistic as an aspiration. However, the goal is to reduce the potential trauma from increasingly high impact disruption. The more resilient an organisation is the greater the level of impact force the organisation is able to withstand, converse to the level of trauma experienced.

Therefore, the more resilient an organisation is, the less trauma it experiences from disruptions of increasing severity.

Organisational Resilience is a natural progression to managing disruption

Cranfield University has proposed a 5-level maturity model of Organisational Resilience, each level linked to the approach or action to resilience development that explains how our understanding and approach to organisational resilience has developed:

Cranfield argues that organisational resilience is developed over time, through various stages. This develops from a basic compliance model of preventative control, such as through risk management and basic business continuity (level 1), to seeking opportunity in diversification and exploring new markets and innovation (level 4), and finally, achieving a blend of all stages, including all defensive/preventative approaches and progressive/imaginative approaches (level 5). This happens in both organisations and in general in our thinking on resilience matters.

Summary

Organisational Resilience remains a complex and vague concept that has more in common with Organisational Strategy, Organisational Development and Organisation Transformation than pure Business Continuity Management.

The successful application of Organisational Resilience creates organisations that are inherently more flexible and able to absorb the impact of disruption and adapt to changing environments. A truly resilient organisation can use that inherent flexibility and agility to absorb business disruption from a wider range of external factors, including, but not limited to emergencies and disasters. In an uncertain market and economic environment, organisational resilience should be at the forefront of corporate management thinking and strategy design.

In a future article, we’ll explore what organisational resilience looks like in practice through case studies, as well as explore further the inter-dependency of both Business Continuity and Organisational Resilience in creating organisations able to withstand and thrive in highly disruptive crises.

References

1. Bond, M. 2015, How to survive a disaster, BBC Futures, 28/01/2015, online at: https://www.bbc.com/future/article/20150128-how-to-survive-a-disaster (viewed 08/04/2020)
   
2. British Standards Institute, 2017, Organizational Resilience, online at https://www.bsigroup.com/en-GB/our-services/Organizational-Resilience/ (viewed 05/07/2020)
   
3. British Standards Institute, 2016, Introducing ISO 22301: Business Continuity Management – Minimize risk and protect your business, The British Standards Institute, UK
   
4. Business Continuity Institute, 2020, BCI Horizon Scan Report 2020: An examination of the risk landscape for resilience professionals, The BCI, UK, available online at: https://www.bsigroup.com/localfiles/en-gb/iso-22301/resources/bci-horizon-scan-report-2020.pdf (viewed: 13/04/2020)
   
5. Business Continuity Institute, 2018, BCI Good Practice Guidelines, 2018 Lite Edition: Highlights of the global guide to good practice in business continuity, Business Continuity Institute, UK (available online at: https://www.thebci.org/training-qualifications/good-practice-guidelines.html)
   
6. Business Continuity Institute, 2019, Introduction to Organisational Resilience, video available online at: https://www.youtube.com/watch?v=6T1EDZVyHoM&feature=youtu.be (viewed 05/07/2020)
   
7. Cabinet Office UK, 2018, Preparing for Emergencies – Guidance, UK Government website, available online at: https://www.gov.uk/government/publications/preparing-for-emergencies/preparing-for-emergencies (viewed 13/04/2020)
   
8. Denyer, D. (2017). Organizational Resilience: A summary of academic evidence, business insights and new thinking. BSI and Cranfield School of Management, UK, available online at: https://www.cranfield.ac.uk/~/media/images-for-new-website/som-media-room/images/organisational-report-david-denyer.ashx (viewed 05/07/2020)
   
9. Hamel, G and Liisa Välikangas, The Quest for Resilience, Benchmark 2003 Harvard Business Review, September 2003 https://hbr.org/2003/09/the-quest-for-resilience
   
10. Holling, C.S. (1973) ‘Resilience and stability of ecological systems’. Annual Review of Ecological Systems, vol 4, iss 1, pg 1-23
    
11. Resilience Organisations, 2019, What is Organisational Resilience, Website, New Zealand, available online at: https://www.resorgs.org.nz/about-resorgs/what-is-organisational-resilience/ (viewed 07/07/2020)
    
12. Sterling et al, 2012, ‘Business Continuity for Dummies is an essential ‘survival’ guide for small and medium sized enterprises (SMEs)’, UK Cabinet Office,John Whiley and Sons Ltd, Chichester, UK (sample chapter available online at: https://www.gov.uk/government/publications/business-continuity-guide-sample-chapter–2)
    
13. Walker, D. 2019, What Is Organisational Resilience And Why Is it So Important?, readinow.com, March 8, 2019, available online at: https://www.readinow.com/blog/what-organisational-resilience-why-important (viewed 05/07/2020)
    
14. Wikipedia, 2004, Business Continuity Management, available online at: https://en.wikipedia.org/wiki/Business_continuity_planning (viewed 11/04/2020)