How to assess and develop your organization’s resilience.

*by Andrew Cooke, Growth & Profit Solutions

Resilience – a word more often abused than used correctly.  Resilience often is used to describe strength.   Although strength is implied in resilience, it is actually not a trait (a distinguishing quality) – rather it is a capability, something that can be used.

There are two definitions for resilience that can be used here:

• “the capability of a strained body to recover its size and shape after deformation caused especially by compressive stress”
• “an ability to recover from or adjust easily to misfortune or change”

The Three Factors of Resilience

Resilience relies on three factors:

1. Flexibility – how flexible is your business in terms of how it works, how it is structured and how it is organized in producing the same outcome result?
2. Adaptability – how can you apply what you do and how you do it to produce different outcomes or results.
3. Learning – how good is your business, at an  individual and corporate level, in learning the lessons from having to adapt or be flexible so that you can avoid repeating them (hard , painful lessons) or you can leverage them in the future (where you have had success) and understanding why you were successful or not.

Flexibility Factors

• Elasticity – can you easily expand or contract the business in whole or part
• Alternatives – are there many ways in which you can achieve the same result, or are you locked in to one or only a few ways?
• Interchangeable – how easy can different building blocks (people, assets, processes) be used in a different sequence and/or configuration to produce the same result or outcome?

Adaptability Factors

• Reusability – can your core people, processes and assets be used to produce different outcomes and results with little or no difficulty?  For example, a consulting firm can reuse many of its existing people, processes and assets in delivering a new service.  However, the Boeing factory production line can only produce Boeing airplanes – it cannot produce other products without significant changes in people, assets and processes.
• Speed – how quickly can you move from producing one set of products and outcomes, to produce new products and outcomes?
• Capacity for Change – how prepared and able are your people to make the necessary changes? 

Learning Factors

• Measuring – how good are you at being able to quantify or qualify the changes that have occurred, their implications and the associated outcomes?  Are you able to identify where the greatest impact, positive or negative, has been realized?
• Applying  – can you clearly ascertain as to where the lessons learnt can be applied?  Do you understand what caused the problem and how it was solved, or where and how the opportunity was capitalized on?
• Anticipating – how good are you at being able to replicate or avoid the lessons learnt?  For example, if you are an engineering consultancy who tried to enter a new market unsuccessfully then can you identify why?  Was it the lack of a local partner?  Cultural differences? Inability to deliver?

These 3 factors apply equally to the individual as to the business.  For real success you need resilience both personally and corporately – if you lack the resilience you may not survive the change, even if the business does.

Resilience is not about just meeting the current challenge, or having met the challenge just past, but it is about putting yourself in a better position for the future – not just going back to your original shape or form before the challenge occurred.  To be resilient you need to be flexible, adaptable and to learn from your experiences.

Two out of Three Ain’t Bad – But It’s Not Enough

So what does it mean if you only have two out of three, let’s see below.

1. Flexibility & Adaptability – you can meet the challenge in the short- or even mid-term, but your inability to learn from your experience and apply will mean that you will be overtaken by the competition and quickly become irrelevant
2. Adaptability & Learning – you can diversify into other areas, but you are not at the forefront of your market being weak at delivering in alternative ways.  You are at risk of being out-maneuvered by competitors and being a market follower rather than a leader.
3. Learning & Flexibility – you are efficient at operating in your particular niche, but you are a one-trick pony, and you are at the whim of industry pressures.  You are more reactive than proactive, and your ability to become diverse, grow and spread the risk is weak.

For each of the 3 factors, and for each of the 3 components for each factor, how do you rate yourself?  Score yourself out of 10 for each component (1= Very Low, 10=Very High), and rate how strong or weak you are in each factor and relatively.

Which are your strongest and weakest areas?  How can you leverage your strengths to offset your weaker areas and reduce the associated risks and implications?  Are you really as resilient as you thought?