Research on resilience focuses on people, not process

22 January 2016

By Fiorella Iannuzzelli

Resilience is often associated with risk, but don’t think of enterprise resilience as the evolution of risk management. It’s so much more.

Case in point: The EIU, on behalf of the British Standards Institute, surveyed 411 business executive worldwide and asked them what the most important factor are to ensure organisational resilience? Was it governance or supply chain flexibility? Leadership or information gathering? How about none of the above?

The most important factor, according to the executives surveyed is “understanding customer needs.” Indeed, the report goes on to point out, “addressing shifting customer demands is a frequent topic raised by the experts interviewed for [the] report.” (Full disclosure: I was amongst those interviewed by the EIU.)

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Customer needs come out on top because resilience isn’t really about risk; it’s about change. And change brings equal measures of risk and opportunity. The source of change with the most material importance is, of course, customers. So resilience needs to begin with a better understanding of customers, in order to prepare organisations to respond equally to the opportunities and risks of change.

Unfortunately, according to the survey, companies aren’t doing a very good job at that right now. There is a gap between the importance given to resilience and where companies think they are: 80% say resilience is linked to the long-term growth of their business, but only 29% say resilience is fully embedded in their organisations. That’s not just a gap; that’s a chasm.

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But at least there is an awareness of resilience’s importance. So the question organisations are asking isn’t, “Why should I become resilient?” Rather, the starting point is, well, “How should I get started?”

To me, the first step is communication. Everyone has to get on the same page regarding what resilience is, what its benefits are, and what elements of resilience the organisation needs to focus on. Indeed, two-thirds of respondents in the survey said resilience is “inconsistently understood across my business.” C-suite executives may have one idea of what resilience means, but functional heads might think differently.

We define enterprise resilience as “an organisation’s capacity to anticipate and react to change, not only to survive, but also to evolve.” That means it’s an organisational capability, not a department. And it needs to be treated like other organisational capabilities: with sustained communications that make connections across all functions.

Communication is so important not only because it aligns objectives across an organization, but also because it addresses what the survey identified as the second and third most important factors in resilience: staff and leadership. You can’t be resilient without your people on board. A closely related factor is organisational culture; don’t discount the role of culture and behaviour in enterprise resilience. Culture is core to the way people interact, raising issues, bringing up new ideas, pointing out opportunities, making decisions together – and making change happen.

In the end, it’s people, not process, that will make an organisation resilient. Normally, processes, like those associated with risk management, are easy to measure and get your arms around. Culture, behaviours, leadership and other more intangible parts of the people of an organization are harder to quantify. Harder, that is, but not impossible. The payoff is worth it.

Do you think enterprise resilience is important? Have a look at the report for more of the EIU research. And let me know what you think, by dropping me a note. I look forward to hearing from you.

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