Resilient Organizations
Or how to embrace uncertainty as your only certainty
Welcome to the TUNA-world - An introduction
Scrolling through news feeds and social media platforms these days, can be overwhelming. The storm of the Corona pandemic has not yet passed, and already the world is being hit by the next big disruption due to the Ukraine crisis and the related consequences. While some companies have just begun to recover from the challenges of the last two years, others worry about their survival more than ever. And as if these economic and political tensions are not enough, the consequences of climate change are getting increasingly threatening, too. Flooding disasters, extreme heat waves and droughts will become the rule rather than the exception in many regions of the world. Climate change has become inevitable, and the development of effective climate change adaptation strategies is of utmost importance.
Every single challenge in today’s world is complex and big in itself already. Together, they form an amalgamation of unpredictable yet interwoven forces that seem impossible to tame. It does not feel like little fires everywhere, but like full-grown fire rolls from multiple directions. No wonder, there is this new social media phenomenon called “doomscrolling”, which describes the excessive consumption of negative news on the internet. But can that be the solution? No. Fatalism and inaction have never gotten anyone anywhere – and neither has blind activism.
While VUCA has been the acronym of the hour describing a world characterized by volatility, uncertainty, complexity and ambiguity, the Oxford University Education Program is talking about the TUNA world. This has nothing to do with the endangered fish species. Rather, the V for volatility in VUCA has been replaced by a T for turbulence and the C for complexity by an N for novel. Turbulent and uncertain times with novel challenges that we could not even fathom just a few years ago: Welcome to the roaring 20s of the 21st century! So, what can you do to make your organization both crisis-proof in the short term and fit for the future in the long run? Therefore, we need to talk about resilience, this squishy term that has become a ubiquitous buzzword in the last two years – often used, rarely understood, almost never sincerely implemented as a strategy.
What makes a resilient organization?
There are two fundamental aspects that successful resilience requires: the right mindset and structures.
First, when it comes to building and maintaining organizational resilience – especially for businesses – it starts with a fundamental recalibration of the general mindset. To embrace resilience, we need to free us from the narrow economic thinking of the 20th century, in which short-term profit maximization was the major paradigm. To build organizational resilience, strategies and goals need to be much more long-term and move beyond merely optimizing the next quarterly numbers. As a business leader, you need to think of your organization as one entity embedded in several larger systems: Be it the network of partners you deal with, the community and the country in which you are operating, or the local and global ecosystem. All your actions have an impact on the systems around you – and likewise, your surroundings will impact you. If they are well-functioning, they are a catalyst for your success. If they collapse, they will drag you into the abyss.
Second, building resilient structures is not a vaccine that – once taken – brings healing or ultimate protection from harm. Resilience is more like a set of muscles that needs to be built and continuously trained to develop and maintain its full strength. And just like muscles in the body, it is not enough to train only one of them, but the best result is achieved when their joint function is optimized. Akin to that, resilience is something that cannot simply be managed top-down or implemented in only one part of the organization, but it is something that needs to be nestled into all organizational structures, routines, and operations.
So, what can be done to train the resilience muscles of the organizations?
Organizational Resilience Strategies
According to David Denyer, professor at the Cranfield School of Business, a holistic resilience strategy is composed of four areas of action:
1. Preventative control
In order to prepare for sudden crises, preventative control is indispensable. This part is about “doing your homework”: Maintain the status quo and ensure functioning day-to-day operations. Standardize processes, established clear roles and responsibilities, develop contingency and emergency plans. And above all: Use the times of stability to prepare your employees and managers for the event of a crisis. There are numerous studies showing that it is possible to train resilience and behavior in the event of a crisis. But what is currently reserved primarily for emergency teams such as rescue workers and firefighters is largely neglected in management training. As soon as a crisis occurs, however, emotional stress and uncertainty about the right course of action can lead to a lethal combination of ill-considered decisions. Many companies would therefore benefit from encouraging employees and managers alike to participate in resilience trainings.
2. Mindful Action
Mindful action means anticipating crises and to develop effective respond mechanisms. As soon as the crisis hits, one should do everything possible to avoid either getting paralyzed by the shock or following blind activism. Rather, one should quickly identify creative ways to obtain relevant information and thus enable informed decisions. Creative problem solving coupled with expert improvisation are key. For example, during the first lockdown of the Corona pandemic, I worked together with a medium-sized company, which – like so many others – had to switch completely to home office structures within a short period of time, to implement a regular employee survey system. For the first two months of the lock-down, employees received a short survey three times a week to state their concerns, sorrows, and struggles. Additionally, they also could share ideas how to solve their challenges in this news situation. The results were evaluated on a daily basis and with that the company leadership team could identify the biggest needs for action right away and come up with ideas how to solve them.
3. Adaptive Innovation
Although people hate to admit it, the occurrence of a new type of global pandemic was not unlikely and was mentioned several times in various risk reports in the pre-Corona years. And due to climate change, it will most likely not have been the last. Experts also believe that the Ukraine crisis will not be a brief episode, but already represents new areas of political tension that will occupy us for a long time to come. In other words, we must learn to cope with the TUNA world.
In this context, forward-looking strategic planning is essential. Resilient companies act with strategic foresight by proactively integrating new trends, social developments and potential risks into strategy and innovation development. Of course, if you try to predict the future, you will most likely be wrong. However, there are so-called foresight methods that can be used to illuminate different futures and thus allow a structured examination of several possible scenarios. The insights gained can then be incorporated into long-term strategies and short-term innovation projects.
4. Optimization
Of course, all fields of resilience should be continuously reviewed and optimized. This requires space for regular reflection and the courage to admit past mistakes, question them and take new directions. Resilient organizations successively learn that external shocks do not necessarily lead to a deterioration of the status quo, but also offer positive potential for change.
Paradoxical Thinking – the Mindset for Resilience
Combining all the above mentioned strategies seems merely impossible, maybe even contradicting. How can you align short-term and long-term goals? How can you both exploit on established structures and being agile at the same time? As stated at the beginning of this article, building resilience requires a certain mindset. One guiding principle for that is the idea of paradoxical thinking – a term introduced by the two well-established US-researchers Wendy Smith and Marianne Lewis.
As decision-makers are repeatedly confronted with seemingly complex and irresolvable decision dilemmas, the question how management decisions ought to be made when facing conflicting tensions between economic, social, and ecological goals, becomes imminent. In such dilemma situations, the emerging idea of the management of paradoxes may serve as a powerful perspective. Paradoxes in organizations are commonly defined as contradictory, yet interrelated elements that seem logical in isolation but seemingly absurd when appearing simultaneously. To solve these dilemmas, paradoxical thinking describes the idea to shift from searching the one optimal either-or-solution to the examination of both/and approaches. As regards organizational resilience, it is therefore not about choosing either Preventative Control or Mindful Action, but to find solutions to achieve both simultaneously. Paradoxical thinking, i.e., the ability the to recognize and manage paradoxical situations, will become an increasingly important skill for decision makers to help them replace fixity and rigidity with flexibility and creativity.
In the end, all organizations should strive for „antifragility”, a beautiful concept coined by the famous statistician and author Nassim Taleb:
"Antifragility has the unique property of enabling us to deal with the unknown, to tackle something – and to tackle it successfully – without understanding it."
And now? Well, one thing is certain: The next crisis is bound to come. So, we need to learn to embrace uncertainty as our only certainty. Have you ever taken time to think about what you have learned for the future from the past two years? If so, now would be a good time to start.
