This article is available in Bulgarian.
The Perfect Storm
Resilient companies are capable of surviving crises and flourishing in a world of uncertainty. Every organization goes through its own “perfect storm”, which is a combination of events and circumstances that can bring a company to its knees. Today’s companies are like crystals – they are entirely transparent. The modern digital information platforms that we use do not allow companies to exert control over their image like they could in the past. We increasingly hear, see, feel and think about emerging threats and expected catastrophes, and before we are able to process them on a rational level, we are already facing their consequences. Naturally this dynamic is activating the fears of increasingly larger groups of people – they are worried about their health, their close ones, their safety, their environment and survival as a whole. These fears have a palpable impact on the social environment where businesses have to exist and invent ways to ensure their survival. The most successful companies are those that are already prepared for this new world. I believe that the modern world is neither more complex nor more frightening, but that we simply have more access to information than we did in the past. This is why the subject of how the conditions for success are changing is important to consider.
Preparing for the storm
According to the 2018 “BSI Resilience Index”, societal engagement on the part of global companies takes a backseat to the importance of identifying and understanding problems and risks in the business environment. In other words, successful companies not only follow their own processes, but actively prepare for the successful recognition and resolution of future risks. This entails more internal work – we bring our guests inside our house instead of trying to impress them with the façade. Currently PR and CSR efforts are often focused on the façade.
In the same study leaders point to three main fears associated with the long term ability to succeed: technological innovations, good governance and a lack of knowledge. More than 6 out of 10 people from the study point to these three factors as critical elements for success. This is why they are investing more in governance and accountability, with financial accountability, leadership and company culture being the most important. No surprises so far. The novelty in this approach comes from the meaning that they give to their connections and relations, which they believe can help them recognize and meet change that arises from the environment. This is more than just communications and corporate responsibility. The approach of developing high quality relations allows companies to gauge the sustainability of their stakeholders: clients, suppliers, regulators and competitors.
A frame for successful governance
Resilient companies create effective governance frames to deal with risks. They ensure internal effectiveness and capitalize on incoming challenges by dealing with change from the environment. To create effective frames, these companies:
1.Have a systematic approach to analyzing the business environment and seek rational answers to the following questions: “Which of the global threats are real? How do I know? Which ones might actually impact me? How? What change will this require on the part of my company? How can we prepare? Which ones might impact my country?” In this way companies form their own appropriate boundaries and resilience instead of blindly following external trends.
2.Know whether they give adequate resources to their members so that they can be resilient themselves. They know that their success depends on their contribution to the wellbeing of their members. People prosper through success. In these companies success is seen, shared and celebrated. People’s experience in the modern workplace is not determined only by work-life balance, bonuses, healthy juices in the kitchen or even salary. Their experience depends on whether they can see how their efforts impact them individually, the success of the company and society at large. Do they know enough to be wholesome? How do they share and accumulate knowledge.
3.Know whether their own models and frames of reference for interpreting and acting in the world are helping them or holding them back. Often times we continue to use processes that were created in prior business and leadership contexts, which may no longer be effective. They know how long they can prosper in the face of setbacks and failures and are resilient in times of crisis. They are also aware of how much effort they expend to resolve problems and what the internal and visible effects are.
4.Clear on the goals that stakeholder communities are striving toward so that they can help them and actualize their business in an appropriate context. They do not engage in superficial projects and but instead search for ways to add value and help their stakeholder communities develop through their core activities. They understand their impact on the natural and social capital, and act appropriately in accordance to indicators instead of engaging with superficial projects for work’s sake.
5.Know the value of encouragement, support and mentorship. For a long time in my own company we acted as mentors to each other, only changing the players with time. There is much we still have to learn but we managed to create a strong team of well-connected people. Mentoring does not necessarily entail more costs or consultants. It can easily be built on the trust and resources that already exist in the organization. It is often unnecessary to buy every solution – normally companies have the internal resources, and it is only a matter of using them appropriately.
6.And since we started with leadership, we can conclude that resilient companies know the powerful impact of the leader on the entire organization – including culture and processes. To be a leader means to take charge. To take charge means to serve as an example. Why is serving as an example so important? The latest findings from the field of neuroscience show that the brain is plastic, which gives it the ability to adapt. Everything can be learned, usually easier than we believe. When we think of change, we often imagine revolutions, but change is actually a question of the leader modeling a series of behaviors that the rest of the company can follow. It takes 21 days for new behaviors to become habits and to stop feeling like something new.
Why don’t we use this time to absorb the influences that come from our business environment and turn them into useful habits, knowledge and skills that lead to happiness and resilience?
What indicates that a company is resilient?
- The quality of leadership is the most important factor. If the quality is high, during challenging times problems are quickly analyzed, resolved and the company weathers the storm in a timely and effective manner.
- Engaged members. People are empowered to use their knowledge and skills in solving problems. A resilient company competently manages its own problems.
- Effective partnerships and company resources can provide access to other organizations and resources in times of need.
- Knowledge management is critical – how knowledge is stored, in what format and where; how can organization members gain access to it? Work roles are shared and the team is trained on how to use the knowledge so that key roles are always filled.
- In these companies management silos are no longer barriers that create disconnected and dysfunctional ways of working.
And of course, resilient companies are united by a common cause. They have a shared understanding of the company priorities and that knowledge is effectively used by most members of the organization.
This article was published in „Tvoyat Biznes“ magaine (tbmagazine.net)