Crises are moments in time where organisation leaders are put to the test and where flawed or unfit leadership teams come unstuck. At their most harmful, disasters can unseat leadership teams and even bring down organisations. The consequences of organisation failure can be prolonged and hugely harmful to supply chains and networks, customers, communities and of course to employees and the wider workforce.
Following the BP Deepwater Horizon disaster in 2010 there was much exploration of the issues that caused management to overlook several opportunities to avert disaster. Investigations highlighted numerous missed opportunities: failed checks and balances, poor communication, inability to act both proactively to plan, and reactively as the crisis unfolded. Opportunities come and go as crises scenarios unfold, signals are missed, and leaders miss vital opportunities to prepare for disaster.
Arguably the current COVID-19 outbreak places even more stressors on organisations than those felt during the BP Deepwater Horizon disaster, or even the global financial crash in 2008. The situation is unprecedented in modern times: unique, dynamic and hugely complex. Some organisations will have prepared for such events, but the vast majority will not have. However, it isn’t too late for leaders to take steps to improve an organisation’s likelihood of survival – this is where the concept of organisational resilience comes in.
Organisational resilience: the key to weathering COVID-19?
Organisational resilience is an emergent property that develops in complex systems as a precursor and response to stressors and risks. Understanding system resilience is a central part of organisational development and design practice, and a key strategic activity undertaken by leaders across the people profession.
Scientific evidence identifies three important categories of resilience: planned resilience which arises from planning and preparation for potential crises (eg, known seasonal flu epidemics), adaptive resilience, an emergent, reactive response to acute stressors or system shocks causing change and disruption (eg, volcanic ash cloud, COVID-19), and finally everyday resilience which is built-in resilience to unpredictable, but complex stressors (eg, staff shortages).
For leaders trying to understand how to respond to COVID-19, understanding the nature of the risk, its magnitude and likely course of development, is key. Clearly COVID-19 is a complex, fluid and unknown stressor on organisations requiring adaptive resilience – after all, significant pandemic events are projected to happen just once a century. Although predictable, events like this are difficult for many leaders to plan for.
There are however several key factors of organisational or system resilience that leaders should try to understand which will help their organisations to survive challenges the size and scale of COVID-19:
- Leadership capability is fundamental in developing organisational resilience. For example, research exploring earthquake response and infrastructure failure in New Zealand showed that, even with comprehensive risk management and business continuity plans in place, effective resilience outcomes only emerged when leaders were clear, motivational and able to create shared visions of success. Describing ‘the art of the possible’, and so creating a shared vision, was also highlighted by a team conducting research, again in New Zealand, which found that leadership which emphasises visibility and availability contributed to organisational resilience to acute system-shocks.
Committed leaders are also vital: a study in South Africa also demonstrated the importance of ‘dedicated leadership’ in the healthcare sector, showing that greater dedication to role and organisation was correlated with increased everyday resilience, in this case resilience to staff shortages. And everyday resilience has also been shown to improve when managers avoid controlling and directive leadership. For example, the resilience of water resource organisations was shown to improve when leaders acted as mediators and facilitators, influencing conditions in which employees were operating, but enabled autonomy within teams.
- Organisational culture is also an important element of resilience. Two cultural practices have been linked to positive resilience outcomes. First is the organisation’s perspective on issues or challenges, for example, whether a scenario such as pandemic or terrorist attack is seen as an opportunity to learn and improve. Research into the resilience of multinational oil and gas companies to environmental issues (eg, gas flares and oil-field fires) found that resilience responses were harmed when leaders tended towards denying problems or risks. Researchers concluded that resilience was improved when leaders recognised the learning opportunity and approached learning openly.
Innovation and creativity have also been found to be important aspects of organisational culture, which are linked to improved resilience. Case-study evidence suggests that leaders in resilient organisations are more likely to provide time and resources for experimentation, reward innovation, and provide an environment where employees feel it is safe to share new ideas.
- Human capital, or the knowledge, skills and capabilities of the workforce have also been linked to improved organisational resilience. Motivation and commitment to organisation goals have been highlighted by academics who studied organisation responses in conflict zones. There is also interesting evidence that highlights the value of managing workforce well-being in organisations through natural disasters. The resilience of utilities suppliers in New Zealand was enhanced in those organisations where there was a specific focus on the management and improvement of employee wellbeing.
Other organisational factors have also been shown to improve resilience. These include effective information management, preparedness and planning, access to material resources, effective governance and decision making, and access to effective social networks and collaboration opportunities. These factors, in combination with the workforce factors highlighted above, are all important elements of organisational resilience.
An interesting reflection from research is that organisational resilience is less likely to emerge when risks or issues are absent. Resilience is instead emergent: developing as leaders navigate an issue or challenge with their stakeholders – sometimes during a live issue, such as COVID-19. While challenges of the magnitude of COVID-19 are difficult to prepare for, it is possible to build systems that incorporate the concepts of resilience and therefore create effective reactive and agile responses to risk.
Rising to the challenge
The literature on organisational resilience is clear on the value of effective leadership and the importance of acknowledging the value of people and their human capital. Studies exploring organisation responses to crises highlight the value that effective leadership brings, and the harm that develops in its absence. Effective leadership is therefore central to navigating a real and active risk of the magnitude of the COVID-19 crisis.
Now more than ever leaders must draw on and amplify the knowledge, skills and capabilities of their workforce and other key stakeholders. Organisational resilience to COVID-19 can still be improved if leaders take steps to learn from the evidence. The challenge ahead is considerable: exceptional system-shocks like the present pandemic provide ample opportunity for leaders to lose sight of what is important to their business, exacerbate weaknesses and diminish strengths. Now is not the time to lose focus.
By Edward Houghton