4 Management Practices to Build Organizational Resilience

Resilient organizations have leaders that give hope, stability, trust, and compassion

Photo by Alicia Mary Smith on Unsplash

Driven by the COVID-19 pandemic and Russia’s invasion to Ukraine, I decided to learn about the current risks organizational leaders are seeing to their business.

At the moment of this writing, frequent topics emerged from my conversations with leaders. For example: The effects of accelerated inflation, geopolitical uncertainty, energy price volatility, supply chain disruptions, adoption of new ways of working remotely, retention of talent, digital transformation acceleration, and finding new sources for growth.

However, what I really learned, was that nobody is exempt of worrying, at least a little, about their capability to effectively react and adapt to uncertain environments and rapid change. In fact, Deloitte’s 2021 Global Resilience found that despite pandemic learnings, 70% of organizational leaders do not have complete trust in their organization’s ability to pivot and adapt rapidly to disruptive events (Deloitte, 2021). Additionally, there is expectation that adverse events will be more frequent and severe (Nauck at al., 2021), and global uncertainty has accelerated in the last two decades (Ahir et al., 2021).

Within this context, and more than ever, organizational leaders need to think about how to prepare the organization for the next crisis and gain confidence about their ability to react and adapt.

The concept of organizational resilience refers to the organization’s ability to, in the event of a dangerous surprising event or crisis, re-establish order and return to an acceptable state of normality (Wildavsky, 1988), and potentially emerge stronger by taking advantage of the learnings (Boin and van Eeten, 2013).

Therefore, building resilience its about: 1) Making healthy operational and strategic decisions (e.g., keep reasonable levels of debt, having sufficient liquidity, diversify portfolio and geographies, divest from low or no return businesses, invest in brand image and ESG initiatives, protect IT infrastructure, effectively manage procurement contracts, among others), and 2) Taking care of your employees, specially during stressful times.

Given the reach and human perspective of the latter, I would like to share four management practices based on Gallup research cited in Clifton and Harter (2021). These practices will help employees build resiliency and properly function during adversity:

1. Give hope. Provide role clarity to your employees and show them how they and their role contribute to the organization’s purpose, vision, and strategy. This gives confidence that there is a way forward and that they are contributing to smooth the path.
2. Provide stability. Make people feel prepared to do their work. Especially during adversity, managers and employees need to discuss new priorities and expectations as clearly as possible. Additionally, managers should enable employees with the right resources to perform their work and close knowledge gaps through training. By doing these, employees will feel secure about their jobs, will reduce anxiety, and will build resiliency.
3. Gain trust. Especially in times of crisis, resilient organizations quickly start communicating current status, decisions, and actions that the organization is taking. When communication is missing, speculation begins, and this generates fear and anxiety. Keeping employees well informed and adjusting expectations generates a trusting and open environment, which in turn builds resiliency.
4. Have compassion. Having compassion its about genuinely caring about your employees well-being. This means boosting career well-being (e.g., allow employees to use their strengths and take into account their opinions), foster social well-being (e.g., create spaces for interaction, collaboration, and knowledge sharing; these will help build relationships), and promote physical well-being (e.g., provide wellness incentives to motivate employees to improve their health).

Resilient employees form resilient teams, and resilient teams form resilient organizations. Managers play a key role at achieving this by prioritizing human nature fundamentals such as hope, stability, trust, and compassion. Include these actions in your management style and put them into practice constantly, specially during tough times. By doing so, you will help build organizational resilience, but more importantly, you will be improving your employees’ resiliency and well-being.

References

Ahir, H., Bloom, N., Furceri, D. (2021). “World Uncertainty Index”, Stanford mimeo.

Boin, A., & van Eeten, M. J. (2013). The Resilient Organization: A critical appraisal. Public Management Review, 15(3), 429–445.

Clifton, J., & Harter, J. (2021). Resilient cultures in crisis. In J. Clifton, & J. Harter, Wellbeing at Work (pp. 113–118). New York: Gallup Press.

Deloitte. (2021). 2021 Deloitte Global Resilience Report. London: Deloitte Insights.

Nauck, F., Pancaldi, L., Poppensieker, T., & White, O. (2021, May). The resilience imperative: Succeeding in uncertain times. Retrieved from McKinsey & Company: https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/the-resilience-imperative-succeeding-in-uncertain-times

Wildavsky, A. (1988). Searching for Safety. New Brunswick, NJ: Transaction Books.