STRATEGIC RESILIENCE IN THE FACE OF ADVERSITY IN ORGANISATIONS

Accelerate your business with these tips "Strategic resilience in the face of adversity in organisations". Analyse and discover this TIP!

Resilience is an essential business tool for coping with adversity in times of crisis. In our Tip entitled RESILIENCE (+), We have already talked about the value of using this tool at a personal level. In this reading we will analyse its usefulness as a strategic tool for organisations in the face of crisis situations such as the one currently affecting us, caused by the Covid 19 pandemic and aggravated in these days of March 2022 by the war between Ukraine and Russia.

An adversity is a phenomenon of change in the environment that works against the objectives, interests and even survival of a person or an organisation. Adversities are associated with crisis situations and as such can also be seen as a source of opportunities. 

To combat adversity and eventually emerge stronger from it, companies have tools such as strategic resilience. 

An asymmetric crisis

With the necessary caveats, the Covid crisis is more recognisable for the adversities it has provoked than for the opportunities, at least in the short term. Another characteristic is that the crisis does not have the same implications or the same impact throughout the world, nor does it manifest itself in the same way in all sectors. But in general terms, it is a crisis whose causes lie outside the economy, but whose economic impact is evident.

This impact implies that companies enter a depression quickly to reach a stabilisation point from which recovery begins to take place. We could use the simile of a fast descent in a lift and a slow ascent up the stairs. 

Overcoming crises requires a two-stage roadmap:

• An initial defensive phase aimed at mitigating the initial damage and to be tackled with micro-management. In a figurative sense it would be a phase of magnifying glass and microscope.
• The second phase will consist of a forward-looking medium-term plan in which the instruments to be used will be spotting scopes or telescopes.

A relativised view of change

SPEED

There is a clear paradox in relation to change and the speed with which it occurs. A tortoise is slow but compared to a snail it is fast. A hare is fast but compared to a cheetah it is slow. If we compare the cheetah with the peregrine falcon, the fastest animal on earth, then we perceive it as a slow animal.

All this is relevant because each industry or sector has its own speeds and you cannot expect a tortoise to run like a hare or a snail to run at hawk-like speeds. Speed is an important but not a definitive response value in the face of adversity. If speed were a definitive value, the hawk would be the most competitive, but let's not forget that this bird only lives about 20 years, while the tortoise lives more than 100.

The idea, therefore, is that if you are a tortoise, you are the fastest tortoise. In other words, each sector has a different stake in life and the company must identify the key capabilities for its sector and be excellent at using them. 

By way of example, we cite some of the key skills to be strengthened in the tourism sector: language skills, differentiated development of the tourism experience, flexibility in responding to customer demands, transmit positive emotions, experiences, enthusiasm, energy, commitment or use of forward-looking strategies.

For its part, the logistics sector, according to the experts, has identified key skills such as a good balance between planning and execution, the ability to resolve conflicts, optimisation in warehouse management, teamwork, mastery of technological applications throughout the logistics process, etc.

What is clear is that inaction in situations of adversity does not seem to be a good solution. The speed of change cannot be ahead of the speed of the company, otherwise it will disappear. If we move at the pace of change we will at least retain a relative position.

Uncertainty Vs Risk

To avoid accidents in rainy weather, we use wet tyres, the asphalt is designed to prevent slipping, etc. In short, the risk is identifiable, assessable and we can take measures to counteract it. But if the rain changes to fog, we are faced with a situation of uncertainty, we do not know what is ahead of us, we find it difficult to identify the path of the road. As a result, we slow down or simply stop. 

Today's managers must be able to act in situations of risk and uncertainty and strike a balance between uncertain knowledge y the right decisions. This forces us to be flexible. Thus, speed invites us to be agile and uncertainty forces us to be flexible.

Resilience as a strategic response to adversity

Resilience has been defined in many ways. It is a word that comes from the Greek word resilio, meaning to turn back. Broadly, we understand resilience as the ability to cope with and overcome adversity by transforming it in a positive way.

The crises highlight the weaknesses in the value chain that managers have been so concerned about: cost control, efficiency and so on. But the focus has been lost. Resilience has therefore become an essential strategic capability.

VUCA

VUCA is a concept developed by the US military in the 1990s that was soon adopted by companies. VUCA is an acronym for:

• V. Volatility Volatility
• U. Uncertainty Uncertainty 
• C. Complexiti  Complexity
• A. Ambigity Ambiguity

The VUCA world is fast-changing, unpredictable, complex and difficult to interpret. In Spain, some experts suggest that the VUCA has been superseded and replaced by a new concept:

V I2 R C A2 S

Volatility, Uncertainty + Immediacy, Noise (misinformation), Complexity, Acceleration + Ambiguity, Simultaneity in disparity (China defends free trade and the USA defends protectionism). In a context such as the one defined by both tools, we are witnessing a change in the way strategic thinking is undertaken.

The classic form promotes the analysis of the past through SWOT analysis, diagnostics, etc. This is an incremental vision of markets, more typical of stable environments, based on which we project the past onto the future. This projective approach opens up a new perspective that relativises the importance of the past (only as a source of learning) and puts the future first.

The prospective strategy places the future at the starting point in order to transform the present. It is about putting the future on the agenda of the present. This approach assumes that there is no point in planning for what has already happened.

The question that arises is how to identify the keys to the future. The answer is not simple, but it is necessary to begin by discerning between ephemeral fads and real trends that are likely to consolidate more or less rapidly. The coronavirus itself does not change too many things, but it has been a factor in accelerating trends that were already in place.

In any case, experience shows that the more time spent analysing the future, the better the prospects for success open up for the organisation. Therefore, thinking about the future is a good investment.

IMPACTS AND SCENARIOS

It is not up to anyone to predict the future, but it is up to anyone to visualise possible scenarios and prepare the organisation in the best possible way.

Every major crisis has brought about major changes that are here to stay. With regard to the consequences of Covid, we can cite the following impacts:

1. Shift from a projective to a prospective strategic outlook.
2. Teleworking: there is now a need to move from an improvised to a management-inspired model.
3. Acceleration of digital transformation processes.
4. Resilience versus vulnerability.
5. The customer at the centre of our decisions.
6. Sustainability.

RECOMMENDATIONS

A first recommendation in this regard is to get into the habit of including time in our agenda to think about the future and strategies. The decrease in air travel and the irruption of video conferences mean that managers are doing much less thinking. Pablo Urarte talks about establishing a "flight time" for this. Another recommendation would be not to spend time trying to act on what does not depend on us, nor to waste two minutes without acting on what does depend on us. 

The wording of the third recommendation would be "less planning and more strategy". More compass and less clock. Avoid productivity and efficiency with the wrong focus. Finally, there can be no resilience in a pessimistic environment. Resilience is based on proactivity and optimism, and it is the responsibility of leaders to create an environment where ideas can flow.

Some examples of resilient companies.

AgonSwim, ownership of Spanish Olympic swimmers manufactured swimwear. The crisis resulted in a sharp drop in sales. However, the company's production did not stop, as the company's 16 workers started to make sanitary gowns and masks.

 Closca is another example of a resilient company in the Covid 19 pandemic.. This company was born of a business incubator related to the Polytechnic University of Valencia. Your successful product was the folding bicycle helmet whose advantage lay in design, safety and practicality. 

Closca started to produce face masks with a modern and reusable design. The masks have little or nothing to do with bicycle helmets, but the philosophy that inspired the marketing of the helmets served to take advantage of an excellent opportunity generated by the coronavirus.

In the following link you can read cases of resilient companies (+)