New perspectives on Organizational Resilience
At Unit4 we work with mid-market companies, often seen as the engine of growth for many countries. According to the World Bank, small to medium size businesses (SMEs) make up 90% of businesses globally and contribute more than 50% of employment. If these companies are to thrive as the global economy evolves, organizational resilience will be critical.
It will enable the adaptability required to build sustainable organizations that can thrive, no matter the challenges faced.
To help organizations understand how they can improve their resilience to succeed in this changing world, we’ve commissioned a new white paper analyzing expert commentary on this topic, because we believe organizational resilience must move higher up the agenda for every board. Here are some of the most important findings from the full report.
Why Organizational Resilience matters
Data shows that firms with mature organizational resilience survived the disruption caused by COVID-19 better than others. Leaders should not forget that while organizational resilience may be top of mind now, and in the face of a global economic crisis, they cannot afford to let it slip. While events such as pandemics are rare, a resilient organization is better equipped to overcome smaller, more frequent challenges.
No matter what the crisis is, a resilient organization can quickly adjust to changing circumstances, mitigate risk or create opportunities across any business function, whether sales, supply chain, operations or finance.
Increasing resilience is not just about ensuring an organization survives; it will also help it to thrive, driving – for example - increased revenue and business opportunities, improved efficiency, a more robust supply chain, and a more effective talent strategy and employee engagement.
Dimensions of Organizational Resilience
Organizational resilience in its most complete form spans five dimensions:
- Strategic resilience is the ability to respond to changes in the environment in which the business operates, whether political, economic, social, technical, environmental or legal. For example, adapting the way services are delivered in order to deal with new realities of the business environment.
- Operational resilience enables an organization to identify and react in the event of an incident that affects things such as talent, operations, business continuity and supply chain. One of the most eye-catching and “current” examples of this is of course digital transformation, but operational resilience is about more than tech. It also combines elements across process design, data architecture and hygiene, and the way you treat and manage your people.
- Financial resilience is how prepared an organization is regarding financial health and processes. The modern finance team, using cloud-based SaaS ERP solutions, can provide relevant information to every business leader within the organization. Using this data, finance teams can help to steer the business forward.
- Organizational (cultural) resilience is how ready the organization's culture, workforce and structure is to manage disruption. It starts with the leaders, filters down to employees and then is extended to all stakeholders associated with the organization. The stronger the bonds between you and your stakeholders, the more resilient the organization.
- Social resilience recognizes the impact on the community in which the organization operates. This is most relevant for nonprofit and public sector organizations, where both robust community partnerships and a deep understanding of how crises impact the people they serve are critical to success. It’s also relevant to people-centric private sector organizations like professional service firms, which have had to become much more sensitive to how their people’s lives outside of work are impacted by changes to the working environment, and concomitantly increase their focus on overall employee wellbeing.
These dimensions allow organizations to understand which initiatives they can undertake to improve.
How to improve Organizational Resilience
If organizational resilience were easy to achieve, companies would not disappear, and local governments would rarely receive criticism. As global events have shown, organizations cannot prepare for every eventuality.
They can, however, prepare for the worst outcomes, but even smaller incidents can derail plans, all of which tends to require introducing measurement and controls. The problems come when an event means those controls must change rapidly.
Business leaders must therefore balance a defensive and progressive approach between consistency and flexibility.
Those who develop organizational resilience will be better prepared for the next disruption or event. However, it is more than just steering the organization through a period of disruption. It is also understanding, predicting and continuously innovating.
For an organization to become resilient, it must collaborate internally and externally with all stakeholders, and leadership must help to set the organization's culture so that it does not become too defensive or take too many risks.
Ready to learn more?
To discover how you can equip your organization with the resilience it needs to thrive in the modern world, click below to access our dedicated resource page, where you can also download your copy of the white paper (created in partnership with Enterprise Times.)
Download your copy here.
