By Luise Vassie PhD CFIOSH & Tony Allen FCMA CGMA 

Corporate crises of one kind or another have grabbed world headlines for the past decade and more. More often than not these crises are underpinned by poor decision-making and leadership and leave a legacy of brand and reputation damage.   And they continue to happen.  It’s not just scandals that can rock major organisations – a whole range of political, economic, social and technological issues can unsteady established organisations.

In preparing to better deal with these situations, organisational resilience is the way forward. Resilience is not only about your ability to bounce back when things go off track, it’s about being in a position to seize opportunities and anticipate and respond to changing circumstances. Achieving resilience is a priority for all organisations not just because of the need to avert crisis but to ensure opportunities to create value are identified and leveraged. It’s about long-term survival.

Developing organisational resilience 

Developing your organisation’s resilience brings benefits:

• Adapt successfully to unforeseen and disruptive changing environments 
• Gain competitive edge by indentifying gaps and taking advantage of opportunities 
• Increased agility and innovation by learning from trends 
• Reduce costs and increase efficiency by avoiding potential pitfalls and developing coherence between protective functions (e.g. audit, risk management) and alignment with strategic objectives 
• Obtain a better understanding of risks and opportunities
• Preserve and improve your reputation by being seen as vigilant and robust 
• Engender trust amongst your external clients and internally amongst your staff 
• Cultivate a culture of shared purpose and values 

Of course, developing resilience comes with some challenges, including: determining an appropriate trade-off between controlling costs and achieving greater resilience; identifying when to take on new values rather than persisting with existing behaviours; and resolving conflicts between the need to keep information from competitors and the need to share information for resilience when collaborating with others. Each organisation has to come to its own decision based on the amount and type of risk it is willing to pursue or retain, and the amount it is willing to invest in resilience.

In any organisation, there’s an array of risk issues to consider and often these are accompanied by an equal number of associated protective functions set up to deal with these risks. In today’s environment it’s a challenge for leaders to keep abreast of the risks to the organisation and adding more protective functions to tackle emerging risks is no longer viable.

We need coherence between and amongst these risk functions - not silo mentality - and importantly we need coherence with strategic objectives.  Long term survival is about being able to develop robust business models and strategies and identify the nature and extent of the principal risks businesses are prepared to take to achieve their objectives. However, developing organisational resilience requires much more – it’s about transforming your approach to risk. It’s now about being able to anticipate change, adapt and recover from a wide range of risk events including unforeseen ones and how to ensure that risks are turned in to value creating opportunities wherever possible.

Achieving resilience in a world characterised by volatility, uncertainty, complexity and ambiguity is challenging. It means moving the risk function from:

• A reactive, often compliance based approach to 
• A proactive approach focused on building collaboration and integration across functional silos and 
• embedding a risk culture at every level of the organisation 

How mature is organisational resilience?

We surveyed a cross-sector group of 150 business leaders and risk management professionals to establish the level of maturity of organisational resilience in their organisations.

Despite its strategic importance, most organisations lack maturity in this area. Only a minority indicated that their organisation had a fully embedded culture of resilience. Just over half recognised the importance of organisational resilience but said that they had more to do, while just over a third thought it was a ‘good thing’ but their organisation had not really tackled it. 

Organisational short-sightedness seems to be the biggest stumbling block to incorporating resilience into strategy and operation – the most common barrier was that there were more pressing matters to deal with, pushing resilience to the back of the queue. A lack of senior management focus in this area and potentially related to this, a lack of skills and knowledge to develop an approach to organisational resilience and risk management function silos were other key barriers to progress in this area experience by around a quarter of respondents. These barriers are perhaps indicative of overall weak leadership in this area, with the CEO’s office taking the lead in only a third of organisations.

For most organisations there’s more work to do! And doing nothing and simply focussing on the ‘here and now’ is a business decision they’ll regret.