5 Aspects of Organizational Resilience for Your Business

5 Aspects of Organizational Resilience for Your Business

Blog
October 10, 2024
Portrait of lightning bolts

A 2020 founders' survey revealed that revenue, funding, hiring, and remote work were among their top worries. It's unlikely too many of them thought of organizational resilience as a solution to their worries. After all, it sounds like something only old corporations do. 

So, is it just an old-fashioned nice-to-have or a wise management practice? Like life hacks, are there hacks and pro tips for achieving organizational resilience? Find out below.

What Is Organizational Resilience?

Organizational resilience is the ability of a business to face, survive in, and adapt to any business environment.

Now, survival is great, but we think good resilience can help you thrive in any environment. To paraphrase Nelson Mandela, it helps you make choices based on your hopes and not your fears.

So, good organizational resilience is not just about fear-based defenses like risk management. Instead, it embraces your vision, hopes, and strategies. Done well, it confers competitive advantages to your business right from the start.

But what if you have too much on your plate and not enough time? The good news is that you can make your next-gen business fairly resilient, both in form and spirit, by following the ideas below.

Characteristics of Next-Gen Businesses

Entrepreneur using a laptop

What do we mean by next-gen businesses? Here are some characteristics that next-gen businesses share:

  • Distributed workforce: Remote work, work-from-home (WFH), and hybrid work are the norms now, especially after the COVID-19 pandemic. Many businesses don't even have physical offices where employees gather and collaborate in person. Others employ thousands of gig workers on contract.
  • Digitalization: Many of these businesses employ digital natives and conduct many of their business activities, even all their day-to-day communications, online.
  • New business models: Traditional businesses measured success by revenue and profit. But many next-gen businesses, backed by venture capital or angel investments, measure success by alternative business models like exponential growth in user numbers. If the numbers aren't going up, they can pivot their entire business, sell it, replace management, or even change their target industry.

Such businesses face some unique challenges in improving different aspects of their organizational resilience and require focused solutions to overcome them.

Elements of Organizational Resilience

Views on the constituents of a resilient organization differ. The ISO 22316 standard for organizational resilience sticks to people, culture, and leadership. Other thought leaders like Deloitte add operational, financial, and environmental aspects to paint a bigger picture. We agree with the holistic approach and categorize organizational resilience measures under five aspects — culture, business operations, finances, environment, and reputation.

1. Organizational Culture

Organizational culture comprises the behaviors, practices, beliefs, values, and ethics that influence, and simultaneously emerge out of the day-to-day interactions and activities of a workforce. 

Unfortunately, culture in many businesses seems to be going off-track; the 2022 Gallup workplace survey revealed that 60% of workers felt emotionally detached, 19% miserable, only 33% felt engaged, 50% of U.S. workers felt stressed daily, 41% worried, 22% sad, and 18% angry.

But, you can always do better. A foundational element of organizational resilience is a resilient workforce that practices a culture designed for it, with these essential aspects:

  • Trust: High levels of mutual trust between your business leaders, senior executives, employees, and coworkers are the key. Any decision made at any level must ensure that the trust isn't broken.
  • Empowerment: Empower your employees to carry out their responsibilities. Delegate problems and trust their problem-solving abilities. Verify occasionally but don't micro-manage.
  • Motivation: Conduct regular town halls between senior leaders and the workforce. Keep sharing your vision, hopes, strategies, and optimism with your entire workforce. This is particularly important for a distributed workforce where the energy and buzz of physical offices are absent.
  • Decision making: Design a decision-making process that's democratic, transparent, and objective. Involve your frontline staff and customers in your decisions. Data-driven decisions are great, but ensure that all stakeholders trust your data and interpretation.
  • Empathetic work environment: Show that you care about the physical, mental, and emotional well-being of your employees and contractors. Provide comprehensive health insurance coverage; as many as 96% of U.S. workers consider it very or extremely important. Include other healthcare benefits, like generous parental leave, where possible.
  • Diversity: Is workplace diversity something you should concern yourself with from the start? The emphatic answer is yes! Multiple studies show that workplace diversity improves the quality of decision-making and the bottom line. A workplace that learns to accept a diverse range of ideas from its employees and caters to a diverse customer base is automatically more resilient during times of crisis.
  • Strategic human resource management: Let trust and strategy guide your hiring and human resource management decisions. Also, remember that downsizing creates new problems like reduced trust, less innovation, and burnout. Downsize only as a last resort and for sound strategic reasons, not for short-term cost-cutting.

2. Operational Resilience

Organizational resilience: damaged building

Can your organization carry on its business operations reliably in the face of natural and business adversities? Better still, can it thrive, expand, or enhance under those circumstances? Those are the goals of operational resilience, with these essential elements:

  • Risk management: Comprehensive risk management must be part of your business strategy. Base them on standards like ISO 31000. Map out all your operational risks. If your activities depend on other businesses, follow robust integrated and third-party risk management practices.
  • Business continuity planning: If your business involves physical assets or global supply chains, you may be vulnerable to disruptions like power or internet outages, illegal threats, political turmoil, wars, or natural disasters. Continuity planning ensures the ability of an organization to deliver products and services under such circumstances. Use standards like ISO 22301 to prepare your continuity plans. Prepare standard operating procedures, train all your employees, and mobilize them for regular emergency drills to test their preparedness.
  • Cybersecurity: As a next-gen business, you're probably heavily dependent on online services, even for day-to-day activities. Use security assessments to find and detect security vulnerabilities in your systems and interfaces with all your third-party cloud and software-as-a-service vendors.
  • Redundancies: Design your systems to avoid single points of failure and provide redundancies for all core operations.
  • Supply chain resilience: If your business spans global supply chains, aim for supplier diversity and long-term resilience.
  • Knowledge management: Preserving knowledge, know-how, and organizational memory are essential for your long-term survival. They let you remove your dependency on specific people and make your processes resilient instead.
  • Knowledge sharing: Many businesses lose out on opportunities to thrive by treating their departments as silos instead of freely sharing their knowledge. Use brainstorming sessions and moonshot projects for integrating expertise from multiple departments. Such cross-pollination of knowledge and expertise will come in handy when you run into rough times.

3. Financial Resilience

Organizational resilience: entrepreneurs having a meeting

Closely related to your operations is your financial resilience. It's your ability to face problems in your earnings, financing, accounting, debt, equities, taxation, and related areas. Essentials of financial resilience include:

  • Adequate financing: Ensure you have multiple sources of both debt and equity financing at all times. Be aware of views such as exponential growth being a bad idea and good-old profitability being better.
  • Robust accounting practices: Follow standards-compliant financial accounting, auditing, and reporting practices.
  • Avoid risky investments and partnerships: Don't fall foul of money laundering regulations and ownership laws. The penalties and reputational fallout may damage your business.

4. Environmental Resilience

This may come as a surprise to some of you, but Deloitte's survey on organizational resilience found that extreme weather due to climate change is perceived to be among the top threats. Key elements of environmental resilience include:

  • Extreme weather and natural disasters: Such events can have unexpected extreme consequences on your customers or supply chains. Prepare comprehensive disaster recovery plans using standards like ISO 27031. Ensure adequate insurance coverage.
  • Environmental, social, and governance (ESG) policies: Follow ESG regulations and best practices to achieve sustainability in your business practices. This is particularly true for new-age businesses with manufacturing units or high power usage.

5. Reputational Resilience

Reputational resilience is about maintaining your reputation in the world and taking steps to prevent any reputational risks. This often matters if one of the other resilience aspects goes wrong, and you need to manage the reputational damage and then recover your reputation. But reputational resilience is also a way to maintain a positive perception among your current and future customers.

Assess Your Organizational Resilience

How do you know if your organizational resilience practices are on track? Use the following preventive and monitoring measures:

  • Certifications: Get your business externally audited for certifications like ISO 22301 for your business continuity plans and Service Organization Control Type 2 (SOC 2) for your cybersecurity compliance. They'll reveal gaps in your resilience measures.
  • Security monitoring: Set up real-time cybersecurity assessments and monitoring for all your digital and online assets.
  • Surveys: Conduct regular surveys among your employees for their opinions of your work culture, leadership, and management. We advise using anonymous surveys by external surveyors to maintain trust and eliminate any fear, or possibility, of retaliation. Turn them into key performance indicators and metrics to improve every quarter.
  • Third-party monitoring: If you have deep supply chains and third-party suppliers or vendors, set up third-party monitoring.
5 Aspects of Organizational Resilience for Your Business
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5 Aspects of Organizational Resilience for Your Business

5 Aspects of Organizational Resilience for Your Business

Blog
March 1, 2023
Best Practices
March 1, 2023
Portrait of lightning bolts

A 2020 founders' survey revealed that revenue, funding, hiring, and remote work were among their top worries. It's unlikely too many of them thought of organizational resilience as a solution to their worries. After all, it sounds like something only old corporations do. 

So, is it just an old-fashioned nice-to-have or a wise management practice? Like life hacks, are there hacks and pro tips for achieving organizational resilience? Find out below.

What Is Organizational Resilience?

Organizational resilience is the ability of a business to face, survive in, and adapt to any business environment.

Now, survival is great, but we think good resilience can help you thrive in any environment. To paraphrase Nelson Mandela, it helps you make choices based on your hopes and not your fears.

So, good organizational resilience is not just about fear-based defenses like risk management. Instead, it embraces your vision, hopes, and strategies. Done well, it confers competitive advantages to your business right from the start.

But what if you have too much on your plate and not enough time? The good news is that you can make your next-gen business fairly resilient, both in form and spirit, by following the ideas below.

Characteristics of Next-Gen Businesses

Entrepreneur using a laptop

What do we mean by next-gen businesses? Here are some characteristics that next-gen businesses share:

  • Distributed workforce: Remote work, work-from-home (WFH), and hybrid work are the norms now, especially after the COVID-19 pandemic. Many businesses don't even have physical offices where employees gather and collaborate in person. Others employ thousands of gig workers on contract.
  • Digitalization: Many of these businesses employ digital natives and conduct many of their business activities, even all their day-to-day communications, online.
  • New business models: Traditional businesses measured success by revenue and profit. But many next-gen businesses, backed by venture capital or angel investments, measure success by alternative business models like exponential growth in user numbers. If the numbers aren't going up, they can pivot their entire business, sell it, replace management, or even change their target industry.

Such businesses face some unique challenges in improving different aspects of their organizational resilience and require focused solutions to overcome them.

Elements of Organizational Resilience

Views on the constituents of a resilient organization differ. The ISO 22316 standard for organizational resilience sticks to people, culture, and leadership. Other thought leaders like Deloitte add operational, financial, and environmental aspects to paint a bigger picture. We agree with the holistic approach and categorize organizational resilience measures under five aspects — culture, business operations, finances, environment, and reputation.

1. Organizational Culture

Organizational culture comprises the behaviors, practices, beliefs, values, and ethics that influence, and simultaneously emerge out of the day-to-day interactions and activities of a workforce. 

Unfortunately, culture in many businesses seems to be going off-track; the 2022 Gallup workplace survey revealed that 60% of workers felt emotionally detached, 19% miserable, only 33% felt engaged, 50% of U.S. workers felt stressed daily, 41% worried, 22% sad, and 18% angry.

But, you can always do better. A foundational element of organizational resilience is a resilient workforce that practices a culture designed for it, with these essential aspects:

  • Trust: High levels of mutual trust between your business leaders, senior executives, employees, and coworkers are the key. Any decision made at any level must ensure that the trust isn't broken.
  • Empowerment: Empower your employees to carry out their responsibilities. Delegate problems and trust their problem-solving abilities. Verify occasionally but don't micro-manage.
  • Motivation: Conduct regular town halls between senior leaders and the workforce. Keep sharing your vision, hopes, strategies, and optimism with your entire workforce. This is particularly important for a distributed workforce where the energy and buzz of physical offices are absent.
  • Decision making: Design a decision-making process that's democratic, transparent, and objective. Involve your frontline staff and customers in your decisions. Data-driven decisions are great, but ensure that all stakeholders trust your data and interpretation.
  • Empathetic work environment: Show that you care about the physical, mental, and emotional well-being of your employees and contractors. Provide comprehensive health insurance coverage; as many as 96% of U.S. workers consider it very or extremely important. Include other healthcare benefits, like generous parental leave, where possible.
  • Diversity: Is workplace diversity something you should concern yourself with from the start? The emphatic answer is yes! Multiple studies show that workplace diversity improves the quality of decision-making and the bottom line. A workplace that learns to accept a diverse range of ideas from its employees and caters to a diverse customer base is automatically more resilient during times of crisis.
  • Strategic human resource management: Let trust and strategy guide your hiring and human resource management decisions. Also, remember that downsizing creates new problems like reduced trust, less innovation, and burnout. Downsize only as a last resort and for sound strategic reasons, not for short-term cost-cutting.

2. Operational Resilience

Organizational resilience: damaged building

Can your organization carry on its business operations reliably in the face of natural and business adversities? Better still, can it thrive, expand, or enhance under those circumstances? Those are the goals of operational resilience, with these essential elements:

  • Risk management: Comprehensive risk management must be part of your business strategy. Base them on standards like ISO 31000. Map out all your operational risks. If your activities depend on other businesses, follow robust integrated and third-party risk management practices.
  • Business continuity planning: If your business involves physical assets or global supply chains, you may be vulnerable to disruptions like power or internet outages, illegal threats, political turmoil, wars, or natural disasters. Continuity planning ensures the ability of an organization to deliver products and services under such circumstances. Use standards like ISO 22301 to prepare your continuity plans. Prepare standard operating procedures, train all your employees, and mobilize them for regular emergency drills to test their preparedness.
  • Cybersecurity: As a next-gen business, you're probably heavily dependent on online services, even for day-to-day activities. Use security assessments to find and detect security vulnerabilities in your systems and interfaces with all your third-party cloud and software-as-a-service vendors.
  • Redundancies: Design your systems to avoid single points of failure and provide redundancies for all core operations.
  • Supply chain resilience: If your business spans global supply chains, aim for supplier diversity and long-term resilience.
  • Knowledge management: Preserving knowledge, know-how, and organizational memory are essential for your long-term survival. They let you remove your dependency on specific people and make your processes resilient instead.
  • Knowledge sharing: Many businesses lose out on opportunities to thrive by treating their departments as silos instead of freely sharing their knowledge. Use brainstorming sessions and moonshot projects for integrating expertise from multiple departments. Such cross-pollination of knowledge and expertise will come in handy when you run into rough times.

3. Financial Resilience

Organizational resilience: entrepreneurs having a meeting

Closely related to your operations is your financial resilience. It's your ability to face problems in your earnings, financing, accounting, debt, equities, taxation, and related areas. Essentials of financial resilience include:

  • Adequate financing: Ensure you have multiple sources of both debt and equity financing at all times. Be aware of views such as exponential growth being a bad idea and good-old profitability being better.
  • Robust accounting practices: Follow standards-compliant financial accounting, auditing, and reporting practices.
  • Avoid risky investments and partnerships: Don't fall foul of money laundering regulations and ownership laws. The penalties and reputational fallout may damage your business.

4. Environmental Resilience

This may come as a surprise to some of you, but Deloitte's survey on organizational resilience found that extreme weather due to climate change is perceived to be among the top threats. Key elements of environmental resilience include:

  • Extreme weather and natural disasters: Such events can have unexpected extreme consequences on your customers or supply chains. Prepare comprehensive disaster recovery plans using standards like ISO 27031. Ensure adequate insurance coverage.
  • Environmental, social, and governance (ESG) policies: Follow ESG regulations and best practices to achieve sustainability in your business practices. This is particularly true for new-age businesses with manufacturing units or high power usage.

5. Reputational Resilience

Reputational resilience is about maintaining your reputation in the world and taking steps to prevent any reputational risks. This often matters if one of the other resilience aspects goes wrong, and you need to manage the reputational damage and then recover your reputation. But reputational resilience is also a way to maintain a positive perception among your current and future customers.

Assess Your Organizational Resilience

How do you know if your organizational resilience practices are on track? Use the following preventive and monitoring measures:

  • Certifications: Get your business externally audited for certifications like ISO 22301 for your business continuity plans and Service Organization Control Type 2 (SOC 2) for your cybersecurity compliance. They'll reveal gaps in your resilience measures.
  • Security monitoring: Set up real-time cybersecurity assessments and monitoring for all your digital and online assets.
  • Surveys: Conduct regular surveys among your employees for their opinions of your work culture, leadership, and management. We advise using anonymous surveys by external surveyors to maintain trust and eliminate any fear, or possibility, of retaliation. Turn them into key performance indicators and metrics to improve every quarter.
  • Third-party monitoring: If you have deep supply chains and third-party suppliers or vendors, set up third-party monitoring.
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How Certa Supports Your Organizational Resilience

Organizational resilience: screenshot of Certa's dashboards

By embedding the above measures in your business processes, you can build a resilient organization that can weather the storms in your business environment. Certa's products help you codify your organization's resilience measures into your risk, compliance, and legal practices as follows:

  • Use contract templates to include operational and financial resilience measures in all your third-party contracts.
  • Embed your cultural expectations in the agreements signed with your suppliers and vendors.
  • Build no-code workflows for all your assessment and survey initiatives.
  • Use the risk management platform for all your third-party risk monitoring.
  • Align your suppliers with your environmental resilience measures with the ESG platform.

Talk to our experts for more assistance on your organizational resilience initiatives.