Towards the Building of Organisational Resilience: Uncovering the Key Features

By Simon L. Dolan, Adnane Belout, Jean-Luc Cerdin, and Javier Casademunt¹

Introduction

Organisational resilience refers to an organisation’s ability to adapt, respond, and recover from disruptive events and changes in its environment. In a VUCA world, which stands for volatility, uncertainty, complexity, and ambiguity, organisational resilience becomes even more crucial.

To become resilient, the organisation needs to develop certain characteristics that were not so crucial in running the business in former years but have become so essential in today’s business. For a firm, not being able to adjust quickly may lead to death and extinction. The objective of this article is to describe the principal features of organisational resilience, with an emphasis on culture, structure, leadership, and other relevant features.

What are resilient organisations according to Deloitte’s 2020 report?²

In the wake of a tumultuous 2020, Deloitte Global’s fourth annual readiness report explores the concept of organisational resilience. Deloitte consultants wanted to know how organisations were coping with the unexpected challenges they faced in the past year and get their opinions about what made their organisations able to withstand chaos. From that analysis, they sought to identify what traits define resilient organisations – traits business leaders can emulate to build greater resilience into their own organisations.

The Deloitte report has identified five characteristics of resilient organisations that enabled and promoted nimble strategies, adaptive cultures, and the implementation and effective use of advanced technology. Businesses that were able to bounce back from unexpected challenges typically were:

1. Prepared. Most successful CXOs³ plan for eventualities, both short- and long-term. More than 85 per cent of CXOs whose organisations successfully balance addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020, whereas fewer than half of organisations without that balance felt the same.
2. Adaptable. Leaders recognise the importance of having versatile employees, especially after a year like 2020. To that end, flexibility / adaptability was, by far, the workforce trait that CXOs said was most critical to their organisations’ future.
3. Collaborative. CXOs indicated the importance of collaboration within their organisations, noting that it speeded up decision-making, mitigated risk, and led to increased innovation. In fact, removing silos and increasing collaboration was one of the top strategic actions CXOs took before and during 2020.
4. Trustworthy. CXOs understand the challenge of building trust. More than a third of responding CXOs were not confident that their organisations had succeeded in developing trust between leaders and employees. Those who are succeeding are focusing on improving communication and transparency with key stakeholders, as well as leading with empathy.
5. Responsible. Most CXOs acknowledge that the business world has a responsibility beyond the bottom line. Eighty-seven per cent of surveyed CXOs who said they had done very well at balancing all their stakeholders’ needs also felt that their organisations were able to adapt and pivot quickly in response to disruptive events. That’s nearly 50 percentage points more than the proportion of CXOs who said the same at organisations that hadn’t done well at balancing their stakeholders’ needs.

A culture of business resilience

The culture of business resilience is a mindset and set of values that prioritise the ability to adapt, recover, and thrive in the face of adversity or disruption. It involves a proactive approach to risk management and a commitment to building and maintaining the necessary capabilities to withstand and recover from various challenges.

The culture of business resilience includes the following key features, which include some that were described in the Deloitte report, as well as many more:

Key Feature I: Preparedness

The organisation must be proactive in identifying and assessing potential risks and vulnerabilities and take steps to mitigate them before they occur. This includes having robust contingency plans in place and regularly testing and updating them.

• Risk assessment and contingency planning: Conduct a thorough risk assessment to identify potential risks and vulnerabilities. This includes analysing internal and external factors such as political instability, economic fluctuations, natural disasters, cybersecurity threats, and supply chain disruptions.
• Maintain, diversify, and strengthen supply chains: Relying on a single supplier or location can be risky. Businesses should consider diversifying their supply chains, sourcing from multiple regions, and establishing alternative suppliers.
• Ensure robust cybersecurity measures: With increasing cyber threats, businesses must prioritise cybersecurity preparedness. Implement strong security systems, regularly update software, train employees on cybersecurity best practices, and have incident response plans to quickly address any breaches or attacks.
• Foster a culture that encourages innovation and flexibility: This will enable quick decision-making and the ability to pivot when needed. Regularly assess market trends and customer needs to stay ahead of the competition.
• Strengthen financial resilience: Maintain a healthy financial position to weather uncertainties. Have adequate cash reserves, diversify revenue streams, and establish relationships with financial institutions.
• Have a crisis communication plan in place: Establish a comprehensive crisis communication plan to effectively communicate with employees, customers, stakeholders, and the public during times of uncertainty or crisis.
• Invest in employee training and well-being: This will enhance employees’ skills and knowledge, making them more adaptable to changing circumstances.
• Conduct scenario-planning exercises: This helps to anticipate potential future events and their impact on the business.
• Implement continuous monitoring and evaluation routine plans: Reassess the effectiveness of preparedness measures. Stay updated on emerging risks and trends and adapt strategies accordingly.

Key Feature II: Agility

An agile organisation refers to a company or institution that embraces the principles of agility in its operations, decision-making processes, and overall organisational structure. This is characterised by its ability to quickly adapt, respond to changes, and remain competitive in a rapidly evolving business environment. Here are a few examples of agile organisations:

• Spotify: Is known for its agile organisational structure, where teams work in small, autonomous squads that make decisions independently, experiment with new ideas, and adapt to changing customer needs.
• Amazon: Is renowned for its agility, driven by its customer-centric approach. It encourages employees to experiment, take risks, and learn from failures.
• Zappos: Is an online shoe and clothing retailer that has built an agile organisation by focusing on core values such as customer service, employee empowerment, and innovation.
• Google: Is known for its ability to adapt to changing market conditions and continuously innovate. It promotes a culture of experimentation.
• Toyota: Is often cited as an example of an agile organisation due to its renowned Toyota Production System (TPS), which emphasises continuous improvement, waste reduction, and the empowerment of employees to identify and solve problems.

These organisations showcase different approaches to agility, but all share a common focus on flexibility, adaptability, and continuous improvement to remain successful in dynamic business environments.

Key Feature III: Learning and Innovation

Many studies show that an organisation that has a culture of continuous learning and improvement encourages employees to learn from past experiences and uses them to inform future actions. It also fosters an environment of innovation, where new ideas and approaches are encouraged and supported.

Overall, a learning and innovation culture is essential for business resilience. It enables organisations to embrace change, continuously improve, solve problems creatively, take calculated risks, share knowledge, and stay future-ready. These attributes help businesses withstand challenges and thrive in an ever-evolving business landscape.

Key Feature IV: Collaboration and Communication

An organisation that is transparent about its common values and communicates them to the workforce repeatedly, both to internal and external stakeholders, promotes collaboration across different functions and departments, as well as with external partners and stakeholders. This enables the sharing of information, expertise, and resources, which is critical in times of crisis.

Sharing and leveraging values allows individuals and teams to share their knowledge, expertise, and experiences. This sharing of information helps organisations to better understand their challenges and potential solutions, enabling them to adapt and respond effectively to disruptions or crises.

Collaboration and effective communication foster trust and build strong relationships among team members and departments. This trust enables individuals to rely on each other, share information freely, and work together towards common goals, even in challenging times.⁴ Strong relationships also help organisations to mobilise resources, access external support, and leverage partnerships to enhance their resilience.

Key Feature V: Leadership and Corresponding Accountability

The organisation’s leaders must be committed to building a culture of resilience by setting the tone from the top. They should lead by example, demonstrating resilience themselves, and hold themselves and others accountable for maintaining resilience capabilities.

Accomplished leaders can sustain organisational resilience by articulating and communicating a clear vision of where the organisation is headed. This helps in building a sense of purpose and direction within the organisation, enabling it to adapt and bounce back from challenges.

Sometimes, it is easier to describe the characteristics of an effective and resilient leader by focusing on the antithesis, leaders whose actions can become counterproductive to themselves and to their organisation. Among the features of such anti-resiliency leaders, we can identify:

• Employing a strategy of personal attacks and bullying: Social media platforms often witness political or business leaders engaging in personal attacks and bullying tactics against their opponents. This not only sets a negative example to the public but also distracts from meaningful debates and discussions on important issues.
• Lack of transparency: Instead of using social media to provide transparent and honest communication, some leaders may use it as a tool to obfuscate or manipulate information. This can erode trust in public institutions and contribute to a growing sense of cynicism among the public.
• Oversimplification of complex issues: Twitter’s character limit can lead to oversimplification of complex issues by political or business leaders. This can result in nuanced topics being reduced to sound bites and slogans, failing to address the intricacies and complexities that require thoughtful analysis and discussion.
• Inciting violence or hate speeches: Political or business leaders with a large following on social media can potentially use their platforms to incite violence or spread hate speech. Such messages can contribute to a toxic online environment and have real-world consequences, including acts of violence or discrimination.
• Lack of accountability: Social media platforms often lack effective mechanisms to hold political or business leaders accountable for their messages. This can allow leaders to spread false information, engage in unethical behaviour, or avoid taking responsibility for their actions.
• Bombarding with spam messages: This happens when the leader bombards their followers with excessive promotional content or irrelevant information, without providing any real value or engaging with their audience.

Key Feature VI: Controlling Emotions – Emotional Intelligence

Resilient leaders are empathetic and understand the emotions and concerns of their employees. They can provide emotional support, foster a positive work environment, and help employees cope with adversity, thus enhancing the overall resilience of the organisation.

Overall, emotional intelligence leaders can build strong relationships, promote a positive work culture, encourage open communication, manage conflicts effectively, and adapt to change, contributing to the organisation’s ability to withstand and recover from adversity.

Key Feature VII: Building a Capable Team

Accomplished leaders understand the importance of building a strong and capable team. They hire the right talent, provide them with the necessary resources and support, and empower them to take ownership of their work. This creates a resilient workforce that can effectively respond to and overcome challenges. In other words, a leader who builds a capable team contributes to business resilience by ensuring that the team is equipped with the necessary skills, knowledge, and resources to handle challenges and adapt to change. Here are some ways in which such a leader fosters business resilience.

Key Feature VIII: Promote Genuine Employee Well-Being

A real must for organisational resilience is the recognition of the importance of the well-being of the employees. This promotes work-life balance, provides resources for mental and physical health, and offers support during challenging times, helping to build a resilient workforce that can effectively cope with stress and adversity⁵.

Healthy employees are better equipped to deal with adversaries for several reasons:

• Healthy employees have higher physical stamina and energy levels, allowing them to handle challenging situations more effectively.
• Good physical health is closely linked to mental well-being. Healthy employees are more likely to have better cognitive function, including improved memory, focus, and problem-solving abilities.
• Physical fitness and overall health contribute to emotional stability. Healthy employees are better equipped to handle stress, anxiety, and other negative emotions that may arise when dealing with adversaries.
• Good health boosts the immune system, making healthy employees less susceptible to illness and more resistant to the physical effects of stress.
• Maintaining good health often involves adhering to healthy habits and self-care routines.
• Healthy employees are more likely to engage in teamwork and to contribute positively to team efforts, which can be crucial when dealing with issues that require collective problem-solving and cooperation.

Towards a systemic view of organisational resilience

An interesting angle from which to view organisational resilience is to examine the organisation in a more holistic and systemic perspective. Figure 1 proposes the principal subsystems that need to be analysed and strengthened to build organisational resilience.

Figure 1: A systemic view of organisational resilience

Let’s add a few words on each of the six subsystems that operate in every organisation.

Subsystem I – Workforce & Leadership Resilience

Workforce and leadership resilience refers to the ability of individuals and organisations to adapt, recover, and thrive in the face of challenges and adversity in the workplace. It encompasses the skills, attitudes, and resources necessary to navigate and overcome stress, change, and uncertainty.

Here are some examples of firms that, over the years, have shown the resiliency of their workforce:

• Johnson & Johnson: Is a multinational pharmaceutical and consumer goods company that has a reputation for its strong commitment to employee well-being and resilience. They provide extensive employee support programmes, including mental health resources and stress management initiatives, which help their workforce stay resilient in the face of challenges.
• Southwest Airlines: Is known for its resilient workforce, which invests heavily in employee training and development and fosters a sense of camaraderie and support among its staff.
• Netflix: Is a popular streaming service known for its innovative and resilient workforce and embraces a culture of freedom and responsibility, allowing employees to take risks and learn from failures.

Obviously, and as we have discussed before, to nurture workforce resilience, leaders need to withstand and adapt to the challenges, setbacks, and uncertainty while maintaining a positive and proactive approach. They possess a strong sense of purpose, emotional intelligence, and the ability to make tough decisions in the face of adversity and “sell it to the workforce” as a real necessity.

Subsystem II – Strategic Resilience

Strategic corporate resilience refers to a company’s ability to withstand and adapt to various internal and external challenges while maintaining its long-term goals and competitive advantage. It involves proactive measures and preparedness to navigate through uncertainties and disruptions. Here are a few examples of strategic corporate resilience:

• Diversification: For instance, an electronics manufacturer that produces smartphones may diversify into wearable technology or home appliances to reduce its dependency on a single product line.
• Sustainable practices: Companies can demonstrate resilience by adopting sustainable practices that help them mitigate risks associated with environmental and social issues. An example might be an energy company investing in renewable energy sources to reduce its reliance on fossil fuels and comply with changing regulations.
• Crisis management: Building a robust crisis management plan is crucial for corporate resilience. This involves identifying potential risks, establishing clear communication channels, and implementing protocols to effectively respond to crises.
• Innovation and technology adoption: Embracing innovation and leveraging emerging technologies can enhance a company’s resilience. An example could be an automotive manufacturer investing in electric vehicles and autonomous driving technology to adapt to changing consumer preferences and industry trends.
• Supply chain resilience: This includes diversifying suppliers, creating redundancies, and implementing risk management strategies. For instance, an apparel retailer might maintain relationships with multiple suppliers across different regions to mitigate risks associated with disruptions in a single country.
• Talent management: Investing in talent development and retention strategies is essential for corporate resilience. This involves creating a culture of learning and innovation, providing opportunities for skill development, and having a succession plan in place to ensure continuity in leadership.

Subsystem III – Technological Resilience

Corporate technological resilience refers to a company’s ability to withstand and recover from technological disruptions, including cyberattacks, system failures, or emerging technologies. It involves having robust technology infrastructure, effective cybersecurity measures, and the ability to adapt and innovate in the face of technological advancements. Here are a few examples:

• IBM: In the 1990s, IBM faced significant challenges due to the rise of personal computers, but the company successfully transformed itself by shifting its focus towards services and consulting. This resilience helped IBM stay relevant and thrive in the rapidly evolving tech industry.
• Microsoft: Microsoft has demonstrated technological resilience through its ability to address security vulnerabilities and respond to cyberattacks. For instance, after the infamous WannaCry ransomware attack in 2017, it quickly released patches and updates to protect its systems and help customers mitigate the risks.
• Amazon: Amazon’s technological resilience is evident in its cloud computing arm, Amazon Web Services (AWS), which offers a highly reliable and scalable infrastructure, enabling businesses to build resilient applications and withstand technological disruptions. Recently, they have also incorporated AI technologies into their services and products to strengthen the company’s resilience.
• Tesla: Tesla has revolutionised the automotive industry by introducing electric vehicles and autonomous driving technologies. Tesla’s resilience is focused on embracing new technologies.
• JPMorgan Chase: One of the largest banks globally, the company demonstrates technological resilience by investing in cybersecurity and developing advanced fraud detection systems. It is continuously enhancing the technology infrastructure to protect customer data and prevent cyberattacks.

Subsystem IV – Financial Resilience

Financial corporate resilience refers to the ability of a company to withstand and recover from financial shocks or disruptions, such as economic downturns, market volatility, natural disasters, or regulatory changes. It involves having strategies, policies, and practices in place to mitigate risks and ensure the long-term stability and sustainability of the company’s financial position.

Examples of financial corporate resilience measures include:

• Diversification of revenue streams: By diversifying their revenue streams across different products, services, or geographical regions, companies can reduce their exposure to specific risks. For example, a technology company may diversify its revenue by offering both hardware and software products.
• Strong capital and liquidity management: Maintaining adequate capital reserves and liquidity buffers is crucial for withstanding financial shocks. They ensure sufficient cash flow, access to credit facilities, and a well-structured debt profile in any given context of distress.
• Risk management and contingency planning: This is essential for identifying and mitigating potential risks. Companies that prioritise risk management conduct regular stress tests, scenario analyses, and have contingency plans in place. For instance, financial institutions may stress-test their portfolios to evaluate the impact of adverse market movements on their capital positions.
• Sustainable cost management: Prudent cost management is vital for financial resilience. Companies that maintain a disciplined approach to cost control can better weather economic downturns or market volatility.
• Adapting to changing market conditions: This involves quickly adapting to changing market dynamics, monitoring industry trends, customer preferences, and regulatory changes to identify potential risks and opportunities. For example, companies that successfully transition from traditional brick-and-mortar retail to e-commerce have demonstrated financial resilience.
• Robust corporate governance: Sound corporate governance practices contribute to financial resilience by ensuring effective oversight, risk management, and accountability. Such companies have independent boards, transparent decision-making processes, and effective internal controls. In the end, this fosters confidence among investors and stakeholders, helping to maintain financial stability.

It is important to note that financial corporate resilience is not a one-size-fits-all concept, and the specific measures taken by companies may vary based on their industry, size, and other factors.

Subsystem V – Operational Resilience

Operational corporate resilience refers to an organisation’s ability to withstand and adapt to various internal and external disruptions while maintaining critical operations and delivering value to stakeholders. It involves strategies, processes, and structures designed to identify, assess, and mitigate risks and vulnerabilities that could impact the organisation’s ability to function effectively.

Examples of operational corporate resilience measures include:

• Business continuity planning: It is essential to ensure that the business functions during and after a disruption. This includes identifying critical processes, establishing backup systems and infrastructure, and creating communication protocols.
• Incident response and crisis management: Establishing protocols and procedures to effectively respond to incidents and crises. This includes defining roles and responsibilities, establishing communication channels, and conducting regular drills and simulations to test response capabilities.
• Employee resilience: Building resilience within the workforce by providing training and support to employees, as discussed earlier.

Line management plays a crucial role in operational corporate resilience. They are responsible for implementing and enforcing resilience measures within their respective departments. Line managers are involved in identifying and assessing risks, developing and implementing business continuity plans, and ensuring that employees are trained and prepared to respond to disruptions. They also play a key role in communicating and coordinating response efforts during incidents or crises.

Subsystem VI – Brand Resilience

Corporate brand resilience refers to a company’s ability to withstand and recover from various challenges, crises, or negative events without significant damage to its brand reputation. It involves implementing measures to protect the brand and ensure its long-term sustainability. Here are some key measures to protect the brand:

• Crisis management plan: This plan should include clear protocols, designated crisis management teams, and predefined communication strategies to minimise the impact on the brand. An example would be Johnson & Johnson’s response during the Tylenol poisoning incident in 1982, where they swiftly recalled and reintroduced
  the product, demonstrating their commitment to consumer safety.
• Proactive communication: Maintain open and transparent communication with stakeholders, including customers, employees, investors, and the media to build trust and credibility. An example is Patagonia’s consistent communication on environmental sustainability and their initiatives to reduce their carbon footprint, which aligns with their brand values and resonates with their target audience.
• Strong corporate culture: Foster a culture that emphasises ethical behaviour, transparency, and accountability. This builds a foundation of trust among employees, which translates into consistent brand representation and reduced risk of internal issues impacting the brand⁶. The most popular example is Google’s corporate culture, highlighted by their mission statement, “to organise the world’s information and make it universally accessible and useful”. This culture has helped them maintain a positive image and attract top talent.
• Customer experience management: Prioritise customer satisfaction and loyalty by delivering exceptional customer experiences. Focus on delivering quality products and services, personalised interactions, and prompt resolution of customer issues to protect the brand’s reputation. A widely known example is that of Apple’s emphasis on user experience through innovative design, ease of use, and excellent customer service, which has contributed to their brand resilience, resulting in a loyal customer base.
• Social media monitoring: Actively monitor social media platforms and online channels to identify and address any negative sentiment or misinformation promptly. Engage with customers, respond to their feedback, and address their concerns to maintain a positive brand perception. For example, Starbucks’ effective social media presence allows them to quickly respond to customer complaints or negative comments, demonstrating their commitment to customer satisfaction.
• Diversified brand portfolio: Diversify the brand portfolio to mitigate risks associated with depending heavily on one product or service. This helps protect the overall brand reputation, even if one component faces challenges. An example is Unilever’s diverse brand portfolio, including Dove, Ben & Jerry’s, and Lipton, which allows them to weather market fluctuations and maintain a strong brand image across different consumer segments.

Conclusion

Yes, an organisation can prepare for adversity and become more resilient; it can be re-engineered to develop a culture of resilience. Here is a summary of some strategies and steps that should be taken:

• Create an environment where values are shared and aligned with the objectives of the corporation.⁷
• Identify potential risks and vulnerabilities that the organisation may face. This can include natural disasters, economic downturns, cybersecurity threats, or supply chain disruptions.
• Create a detailed plan that outlines how the organisation will respond to and recover from adversity.
• Ensure that the organisation has diverse revenue streams, a skilled workforce, and a flexible supply chain.
• Establish partnerships and collaborations with other organisations, government agencies, and community stakeholders that will provide support and resources during times of adversity.
• Test and update the plan regularly, engage in exercises and drills to test the effectiveness of the contingency plan. Identify weaknesses and areas for improvement and update the plan accordingly.
• Learn from past experiences and analyse previous instances of adversity and learn from them.
• Lastly, foster a culture of resilience by nourishing a proactive and resilient mindset among employees. Encourage innovation, adaptability, and continuous learning.

By taking these steps, an organisation can enhance its preparedness and develop the ability to withstand and recover from adversity, ultimately becoming more resilient.

About the Authors

Dr Simon L. Dolan is full professor and researcher at Advantere School of Management (affiliated with Comillas, Duesto and Georgetown Universities). He is the former Future of Work Chair at ESADE Business School. He has published 85 books (in multiple languages) and over 150 articles in referees’ journals. He is also the cofounder and President of the Global Future of Work Foundation (www.globalfutureofwork.com). His work, consulting, and research is about values, leadership, coaching, stress management, and resilience, as well as issues connected to the future of work. He holds an MA and PhD from Carlson Graduate School of Management at the University of Minnesota. He was a former editor of cross-cultural management and member of the editorial board of half a dozen scientific journals. His full bio can be found at: www.simondolan.com

Dr Adnane Belout is an associate professor at the University of Montreal. In addition to his speciality in the management of human resources (PhD), he has developed expertise in the field of HR data analytics. Formerly, he specialised in the field of project management (MA). In addition, he is the Director General and founder of Le Groupe Canadien MDS, a consulting firm based in Montreal, which offers training services in French throughout the globe but with a focus on West Africa (www.groupemds.com).

Dr Jean-Luc Cerdin is a full professor of International Human Resource Management at ESSEC Business School, France. He researches, publishes, and consults in three primary areas: global mobility, human resource management in MNCs, and global career and talent management. He has contributed numerous articles to international top-tier professional and academic journals, such as the Journal of International Business Studies, the Journal of World Business, Human Relations and Human Resource Management. Additionally, he serves on several editorial boards for HRM and international business journals. He has been visiting professor in American Universities like Wharton and Rutgers, as well as leading business schools in Europe, such as ESADE in Barcelona, Spain.

Javier S. Casademunt is a consultant and the director of the Brazilian branch of the Global Future of Work Foundation (www.globalfutureofwork.com). He has served for many years as the director for Brazil, and academic collaborator of the Strategy and General Management Department at ESADE Business School. He is the founder and CEO of the Neuromentoring Institute of Florida. He is a visiting professor to several top business schools in Latin America, and an expert in the areas of leadership, mental health, resilience, and performance. He has more than 20 years of successful experience in managing, teaching, and consulting for companies, governments, and top leaders globally. His email address is javier@.javiercasademunt.com, and his website is www.javiercasademunt.com.

References

1. The authors are currently working on the development of an innovative tool designed to audit organisational resilience.
2. This section was inspired by the Deloitte report. The full report can be found at: https://www2.deloitte.com/us/en/insights/topics/strategy/characteristics-resilient-organizations.html
3. CXOs are high-level executives who focus on creating consistent, frictionless CXs that meet or exceed expectations across all customer touch points and at every stage of the customer journey – before, during, and after a sale is complete.
4. Much more on the effect of building trust can be found in: Dolan S.L. Brykman K. (2024) The Art and Science of Building Trust (forthcoming).
5. For more, read: Dolan S.L. (2023) De-Stress at Work. London. Routledge.
6. An example is the annual or biannual ethical assessment. The use of state-of-the-art audit tools is recommended. For instance: myDova.com
7. For more, see: Dolan S.L. (2020) The Secret of Coaching and Leading by Values. London. Routledge.