The resilience of organisations
This week my new book arrives in bookstores (at the moment it is only available in Spanish, sorry). It deals with an essential quality for the survival of companies and institutions in an environment of constant disruption: their resilience.
Resilience has only become a commonly used word in Spain in the last decade. Searches for this term in Google skyrocketed, and it was close to being selected word of the year in 2020. Even the government has drawn up a national “plan for recovery, transformation, and resilience” with its proposals to manage the Next Generation EU funds granted to Spain.
Yet, this growing interest in resilience is more than a fad.
If we follow the definition of the term resilience in the dictionary of the Royal Spanish Academy, the resilience of organisations would be “the capacity (of an organisation) to recover its initial state when the perturbance it suffered has ceased.” So, in a turbulent, more complex, and volatile environment, it makes sense company leaders and stakeholders get interested in a capacity on which the survival of organisations depends more than before.
Specialists in different disciplines have written hundreds of academic papers on organisational resilience. Standardisation organisations, such as the British Standard Institution (BSI) and the International Organization for Standardisation (ISO), have produced standards on this matter companies can use as a guide to working on this topic or even incorporate them into their formal management systems.
But still, despite everything we have learned about resilience, companies are dying younger and younger.
In 2016 Martin Reeves, Simon Levin, and Daichi Ueda analysed the longevity of more than 30,000 companies in the United States over 50 years and found that companies were dying faster than ever. Listed companies had a one in three chance of exiting the market in the next five years, a six times greater probability than they had 40 years earlier. And this increase in mortality was independent of their size, industry, or, as shown by a study carried out by the Santa Fe Institute on those dates, of the years they had been in business.
Six years later, in part due to the impact of the COVID-19 pandemic, this trend is even more evident. Innosight’s Corporate Longevity Report (2021) shows how both the reshaping of entire industries and the acceleration of some trends are creating winners and losers. As a result, they expect that the average time companies will remain on the S&P 500 will be between 15 and 20 years at the end of this decade, compared to between 30 and 35 years at the end of the 1970s.
This increase in the mortality of companies has to do with the fact that nowadays it is easier to start up new companies, as well as the more intense and frequent changes in the environment. But it is also a consequence of what companies do (or fail to do) to build their resilience, the decisions they make, and, above all, how they execute them.
Arnold Toynbee once said that one of the big differences between living organisms and societies is that societies do not have a life expectancy determined by nature, so “societies do not die of natural causes, but from suicide or murder, and nearly always from suicide.” And we could say something similar of organisations, only that, among the causes of their death, I would add, together with murder and suicide, the increasing probability of them suffering an unfortunate “accident.”
And this is what I would like this book to help. To prevent unfortunate “accidents.” In particular, I would like my book to help people who lead or participate in projects aimed at increasing the capacity of their organisations to respond and adapt to changes in the environment start conversations in their organisations that help them find their formula, unique and unrepeatable, for resilience. Although it is also recommended for any stakeholder in an organisation who is concerned about its future.
The Spanish edition of the book is now available both in paper and electronic format on the website of the Libros de Cabecera publishing house, which you can access from this link.
I also invite you to follow the book’s account on Instagram, from which we will be reporting on the presentations and other initiatives that we will carry out in different cities.
