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The Importance of Being Resilient

, November 23, 2023, 0 Comments

In today’s ever changing, connected world, people & organizations face all kinds of adversity in life. There are personal crises, such as illness, loss of a loved one, abuse, bullying, job loss, and financial instability. Businesses face technological disruptions, market changes, geopolitical events et al which can drastically affect their very existence. There is the shared reality of tragic events in the news, such as terrorist attacks, mass shootings, natural disasters, a global pandemic, and war. People have to learn to cope with and work through very challenging life experiences. Mental health professionals, psychologists, economists and various other experts state “Resilience” to be a key positive quality to effectively handle the various stressors and adversities that life throws our way. But what exactly is resilience?Leader Manager Leadership resilient-MarketExpress

By definition, “Resilience” refers to the ability to withstand, rebuild or recuperate quickly. It implies “possessing elasticity”. Resilience theory refers to the ideas surrounding how people /organizations are affected by and adapt to challenges like adversity, change, loss, and risk. Resilience theory has been studied across different fields, including psychiatry, human development, and change management. While there have been many studies focusing on human / individual resilience and its impact on personal well-being, in this article, we’ll be focusing on organizational / business resilience which is a key attribute affecting its longevity.

Business resilience describes an organization’s ability to respond and adapt quickly to disruptions or significant, unplanned changes that could threaten its operations, people, assets, brand, or reputation. A classic and recent example of this is the Covid pandemic which disrupted many businesses worldwide. There were some who managed to adapt to this change whereas some shut shop before the pandemic ended. Resilience isn’t a fixed trait (it can be inculcated, enhanced or diminished with time); and it’s not constant, in that an organization might demonstrate a lot of resilience when it comes to some types of challenges it faces, but struggle more with being resilient when it comes to other stressors.

While the different kinds of challenges or adversities that organizations face is too vast and varied to be enumerated precisely, we can endeavor to classify some common categories of challenges that organizations face and where resilience (or the lack thereof) could make a key difference in outcome.

  1. Technological disruption – Nowadays, one of the foremost causes of disruption for an organization or even an entire sector is technology. Major technological advancements / shifts can significantly impact existing operations and profitability and unless an organization adapts quickly or changes its business paradigm accordingly, it can easily be rendered irrelevant. A great example of it is the advent of smartphones a couple of decades back. While it majorly affected traditional cellphone manufacturers like Nokia & Blackberry, it also had a massive impact on the photography industry. Kodak was the leading manufacturer of photo printers, films and cameras in the 20th century. However, with the advent of smartphones, consumers (atleast non-professional ones) no longer needed cameras and online photo sharing (rather than printing photos) became the norm. Kodak failed to read the massive technological disruption, stayed complacent and rigid in their business models and ended up filing for bankruptcy in 2012.
  2. Competitive landscape – Another important factor which organizations need to consider, are the changes in the competitive landscape. New entrants with innovative products, different business models, supply chains, pricing strategy et al could majorly affect an organization’s plans. In the transportation sector, traditional taxis and autos typically commanded a higher pricing power because the consumers approaching them were in urgent need and the presence of a drivers’ union ensured that the consumers were always at a disadvantage in price negotiations. However, with the coming of new ride aggregator apps like Uber, Ola et al, the entire ride-hailing and price discovery process has become more transparent, democratized and has changed the competitive landscape completely in the private transport segment.
    Personnel challenges – Most organizations would have key / critical talent which drives the business strategy, execution, sales, marketing et al for its products & services. While organic attrition happens, if an organization were to lose multiple key talents in quick succession it could adversely impact its planning, execution & profitability. Retention of such talent thus, becomes a business imperative.
    Regulatory environment – Regulatory bodies & policies (governmental and otherwise) affect the operating environment of an organization. Major changes to such policies can significantly impact a business and its future plans For e.g. In 2022, GoI introduced a 30% tax on profits from trade in cryptocurrencies, 1% TDS on all crypto transactions and made it clear that cryptocurrency would never be legalized tender. These policies put a real dampener on the cryptocurrency market and raised a question mark on its long-term prospects.
  3. Partner impact – Sometimes an organization can also be affected by an impact on its partner organization like a vendor, supplier or a partner on which its dependent. In 2021, the world got impacted with a major crisis in the semiconductor industry which impacted its supply worldwide. This in turn severely impacted dependent sectors such as automobile & electronics and affected their delivery, operations & even profitability.
  4. Global events / Natural disasters – The COVID-19 pandemic is perhaps a classic example of a global event which severely disrupted multiple industries, economies and livelihoods. Post pandemic, some organizations cease to exist and many have their business models changed drastically.

While its practically infeasible for an organization to anticipate, prepare for and overcome every challenge /adversity that arises, inculcating certain key qualities and practices can help an organization respond and adapt faster. Highlighting some key behaviors & practices to improve resiliency in an organization:

  • Innovation culture – Building a culture of innovation in the organization is the foremost factor in enhancing resiliency. Those organizations which are always looking to improve their productivity, processes & technologies; tend to delight customers, enjoy better resource utilization and higher profits. Those that are always peeking beyond the corner tend to be the ones that either bring about or embrace disruption faster rather than end up being disrupted.
  • Strategy team – Its highly prudent to have a dedicated team in the organization that is actively looking at the competitive landscape, new products, consumption trends, economic environment et al. Most teams in a company are focused on the day-to-day execution & delivery of services or in other operations such as sales and marketing and lack the bandwidth to focus dedicatedly on organizational strategy which is medium to long-term in nature. Having a dedicated team which can plan & build out a strategy looking at various factors mentioned above, can help in spotting disruptions when they come upon the horizon and enable the organization to respond & adapt better.
  • Key talent retention – In any organization, there are certain resources that are considered key talent. These could be in any team but retaining them becomes essential to business planning and execution. Providing attractive compensation, a meritocratic & enjoyable environment, challenging, and interesting projects are some of the mechanisms by which such talent can be retained and thereby, help to mitigate personal challenges.
  • Infrastructure, data & operational redundancy – Traditionally, many businesses have business continuity plans to achieve disaster recovery. In addition, organizations should also build redundancy in their IT infrastructure, customer data, supply chains, partner ecosystem et al so that if there is an issue / failure with primary components of the ecosystem, the system can fallback to these backup components and enable continued operations.

In a nutshell, the world is experiencing unprecedented levels of disruption and business risk. Some companies freeze and fail while others innovate, advance and even thrive. The key differentiating factor is resilience and this isn’t something that is a constant or can be built overnight. Rather it’s an organizational attitude stemming from a combination of qualities, practices, ethos and above all people mindsets. To sum up, in the words of famous German aviator & religious leader, Dieter F. Uchtdorf, “It’s your reaction to adversity, not adversity itself that determines how your life’s story will develop.”