What characterizes a resilient organization?

Today’s fast changing business environments demand resilience from organizations in order to be successful. Resilience is the ability of a company to withstand external changes on the one hand without needing to specifically adopt to the changing situation and on the other hand to be flexible enough to actively react to new developments. Resilient organizations are therefore both: stable enough to withstand and flexible enough to adopt.

The question this blog post will try to answer is what differentiates a resilient organization from the ones that do not survive in changing environments?

One important characteristic for resilient companies is diversification. The organizations that survive the longest in business constantly question their portfolio of products, services or targets. External changes can make former bestsellers obsolete and new developed products might be disregarded in the possible opportunity they might be, by favouring the known products and lack of entrepreneurial spirit. External changes affect all organizations, the one who react fast but well thought out survive and profit from the situation.

To take advantage from external opportunities and to recognize changes in the business environment before it is too late an organization has to have a good outsider view. Active surveillance and analysis of the environment simplify innovation and investment decisions. Furthermore, these analyses provide an early warning system to detect changes faster which can be a key advantage, especially in difficult times.

Technologies to optimize organizational effectiveness can be implemented in every company. If every company can use the same techniques to be more efficient, the crucial strategic resource, deciding over win or lose, are the employees. Therefore, having a strong company culture which promotes resilience, flexibility and change is necessary to be successful in the long run. Growth potential from within the company originates from an actively shaped culture of openness and dialog. In a culture like this ideas from internal sources have the highest chance to be implemented. But company culture today goes beyond internal culture. Today, organizations are not only submitters of information but can also receive feedback and ideas from external sources. Social media offers new channels of interaction which can be used to improve the company culture, portfolio, reputation etc. Thus, an open organizational culture is not only an internal matter but rather as well an external topic today.

Simplification of internal structures is a big share of what makes a company resilient. A simple structure is easy to modify, reshape and customize in new situations. Especially when fast action is necessary for example in crisis times, simplicity comes in handy as fast decisions can be made based on sufficient overview over the company internal implications of the changes. Non contemporary and/or overgoverned processes should be reduced as much as possible to increase the company’s flexibility and thereby it’s resilience. Simplicity results in transparency which leads to easier and better decision making. Furthermore, simplicity enhances the agility of a company improving its ability to react fast.

Last but not least the big picture is determining a company’s path. The management needs foresight and vision to successfully lead in times of change. Too much focus on minor details often blocks clear view on the actual target. Approaching problems analytically from an internal as well as an external perspective leads most likely to the most favourable results.

Summarizing, a resilient company needs an internal and external view on its processes, culture and portfolio. These views promote early identification and exploitation of opportunities and prevent to fall behind the competition. Transparency and simplicity in the structure and the culture of an organization promote quick decision making and increase the general quality of the decisions made as the chance of mistakes in the problem analysis or in the execution of strategies is reduced.

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