Planning for the long game has always been a priority for successful enterprise organizations, but rarely has it been more essential than it is today. Not only do leaders have to worry about old-fashioned concerns — market share, their customers, their employees — but those that hope to sustain themselves have to consider how they’ll navigate the now almost-routine radical change: what to expect, what can’t be expected, what their strategies will be, and how their team members will handle it psychologically.
Of course, looking ahead to organizational challenges years from now can feel as if you’re playing darts blindfolded. But there’s a principle that organizations can adopt that not only removes the blindfold but makes it a lot easier to hit the bull’s-eye: resiliency.
Why Is Resilience Important in Business?
While the concept of business resiliency is by no means a new one, there is still no firm answer as to how organizations can both avoid “threat rigidity” (reacting to times of stress by closing in, getting more hierarchical, and stopping innovation) and implement a structure that drives nimble reactions to change.
Research from Innosight underscores the fact that resiliency isn’t just a nice to have for organizations — it’s crucial in order to merely survive. The research analyzed companies’ tenure in the S&P 500. In 1964, companies spent an average 33 years on the list. That tenure decreased to 24 years by 2016 and is forecast to shrink to just 12 years by 2027.
There’s a wealth of research beginning in 1981 that covers how organizations work to address problems before they start and become more nimble in responses. A 2017 review of resilience research maps out five research streams, defining resilience as:
- organizational responses to external threats.
- organizational reliability.
- employee strengths.
- the adaptability of business models.
- design principles that reduce supply chain vulnerabilities and disruptions.
These key principles of resiliency are pretty easy to understand — so why aren’t all organizations focused on becoming more resilient? And what happens when we don’t make resiliency a No. 1 priority?
We see the side effects of ignoring resiliency all around us. Take siloes, for an example. Siloes aren’t the opposite of resiliency, but they are the rigid result of not intentionally building more resilient structures.
Because most organizational structures are based around efficiency, departments are siloed, and employees typically work with people who have similar functions and roles. As we have all seen, that structure leads to limited communication between different departments.
While there is a deep bench of communication software that aims to help organizations connect across silos — Slack, Zoom, Teams, and others — these tools are not enough. Breaking down silos in a meaningful and lasting manner requires re-examining every aspect of your organization’s structure to make sure communication is never a barrier to getting something done.
Recent research from McKinsey shows that one effective way to bust silos is to set “breakthrough” goals that can only be achieved when different functions work together collaboratively.
Here’s one example from McKinsey’s research — a telecom company. Company leaders set a goal to decrease by half the number of customer support calls by new customers. To do that, the company created new cross-functional teams that owned the customer relationship all the way from initial order to customer service.
“As a result, teams that traditionally had separate workflows and little shared responsibility were forced out of their comfort zones. The cross-functional representatives convened every week to review how well they did on a set of cross-functional key performance indicators and to generate further ideas for improvement. […] The impact of this cross-functional collaboration has been tangible: first-time-right delivery has increased to over 80 percent (from 65 percent), customer satisfaction is up, and the number of requests for help to the call center during the first six weeks after installation dropped by one-third, with a commensurate reduction in costs.”
In my view, it will take that kind of dedicated, organization-wide, all-hands approach to building truly resilient organizations.
Borrowing the Playbook from Urban Planners
Resiliency is not a concept reserved for the business world; urban planners have relied on the principles of resiliency for decades. While the goals of businesses and cities may differ in some ways, there are many parallels and lessons to be drawn from one to the other.
Both are living organisms — cities constantly evolve and change, just as organizations do. There are numerous pressures on cities that affect their ability to thrive — for example, climate change, demographic shifts, and globalization, to name a few. The goal for urban planners is to prepare their city for whatever outcomes the future may bring, without clear knowledge of what the future holds.
Let’s take Detroit, Sift’s home base, as an example. Detroit’s complicated economic history is inextricably linked to shifts in the automotive industry. As the Big Three auto companies (Ford, General Motors, and Fiat Chrysler) embraced automation, outsourcing, and decentralization, the local economy was ill-equipped to handle job loss and famously filed for bankruptcy in 2013.
As Detroit rebuilds and revitalizes, planners, city leaders, and resilient residents have had to consider a multitude of possibilities for its future. They don’t know what future jobs in Detroit might look like, though it’s safe to say that Detroit will never be a mono-industry town again. They have to consider economic, social, and environmental factors as they look ahead to the decades beyond — the “unknown knowns,” as Donald Rumsfield so famously put it. To live in Detroit means to plan for a new future, with resilience as a guiding tool.
Of course, planning for a future without cars might not necessarily be top-of-mind when you think of resilience for your organization. But as you look at the seven principles that planners use in resiliency thinking, you’ll find they translate incredibly well to the issues enterprises face:
- Maintain diversity and redundancy.
- Manage connectivity.
- Manage slow variables and feedbacks.
- Foster complex adaptive systems thinking (in a nutshell: understand the complex interactions and dynamics that exist between people and their communities).
- Encourage learning.
- Broaden participation.
- Promote polycentric governance systems.
How can you apply these principles of resiliency to your organization? Begin by asking yourself these questions:
- How could you encourage more diversity in your leadership teams?
- How could you connect people from different departments and locations so that they know who to call in times of crisis or unexpected change?
- How could you speed up glacial review processes in your business units?
- How could you help employees think about change as an expected reality, and help them shift their work and their relationships constantly to adapt?
- How could you build continuous learning into every employee’s work routine?
- How could you drive engagement and solicit input about the future of the organization?
- How could you build a less hierarchical, more collaborative structure that includes more decision-makers at every level, instead of a command-from-on-high mentality?
Investing in Innovation on the Enterprise Level
All of this talk about innovation and collaboration is great, but how can enterprise organizations actually make these major changes? Big companies can feel as unwieldy as tanker ships — it’s tough to quickly shift direction. What we need are models, both structural and cultural, to foster resiliency and flexibility (and move those tankers a little more nimbly).
Google has encouraged innovation, with obvious success. Google has expanded beyond its flagship search engine to dominate in the markets of shopping, smart home technology and video. How did they diversify so effectively and conquer these seemingly-unrelated sectors?
While some of these are acquisitions, many of Google’s products were developed internally, often beginning as a brainstorm by a single employee. That’s because Google has prioritized creativity and innovation in a practical and tactical sense. It’s due to a now-famous policy called “20% time”: Employees are encouraged to work on projects or tasks that don’t relate directly to their position but that could have a place in the Google ecosystem.
What’s the result of this 20% time? More products than we can count — and differentiation. When Google first started it was a bare-bones alternative to cluttered websites like Yahoo and Ask Jeeves. Now, because it has embraced resiliency thinking in its business model and culture, we associate it with a whole lot more.
My takeaway from Google’s 20% time experiment is simple: when you give employees flexibility in how they spend their time and what they work on, they build in time and space for resilient thinking. They innovate, they push back on their to-do lists, they think outside the silo, and they give themselves space to develop perspective and big ideas. It might seem impossible to free up your employees’ brain space in the same way that Google does, but in a business world with more and more pressure to innovate, I’m not sure we have a choice.
Resiliency by Design in the U.S. Military
Silicon Valley doesn’t have a patent on innovative practices. Another organization that embraced resiliency principles before they were a hot concept: the U.S. military. The military constantly has to address new challenges and strategies — whether it’s in response to changing conditions in a military conflict or disaster response, or the adverse effects of sonar on whales.
But the plans the military dreams up can’t be executed without investment in human capital. The military encourages its members to receive additional training, and — more importantly — it keeps extensive logs of the training its members have received. Because of this extensive planning, the military is able to quickly assemble a team — perhaps composed of people based on multiple continents — to handle whatever challenges it needs to confront.
This emphasis on training and skill-building also means that more and more, the military is composed not of specialists but of problem-solving generalists — team members who can fill various roles, depending on the situation. Mental agility and adaptability have always been crucial in times of war, but truly they’re qualities the military relies upon at all times. Organizations that want to be more resilient need to prioritize these same traits in order to support quick responses to ever-changing scenarios.
Your Resilient Future
Resilient organizations are built by the people who work for them. No matter how many technological tools an organization relies on, human capital is essential to thrust an organization toward profitability and market share.
So how might you structure your more resilient, silo-busting, problem-solving, target-hitting organization? If we follow urban planners’ principles of connectivity, diversity, and multi-centric leadership, and we take inspiration from the innovation and collaborative-focused examples in the business world, we might imagine a resilient organization that looks like this:
The next time you think your organization is too large, too old, or too strapped to embrace a resiliency this model, think again. Because we know one thing is true: If you don’t invest in your people and building smarter connections between them in order to thrive as a living organization, you could find your company going the way of Ask Jeeves.
Learn more about how Sift helps organizations communicate, collaborate, and build a more resilient future. Request a personalized demo today.