Perhaps the biggest structural flaw you are ever likely to find when it comes to resilience, is when an organisation underestimates resilience, what it means and the benefits it can bring.
When I think back to some organisations I visited before Covid, one concerning sign was if executives referred me to the risk department when I asked to see business continuity and risk mitigation plans. In those cases, the message was that it’s the risk department’s duty to look after those areas – so it takes place in isolation rather than being a shared responsibility across every part of the business.
It’s important to note that silos are never, ever healthy for resilience. Silos close you off from seeing and understanding what departments are doing, and prevent you from looking outside the company walls at what is happing in your wider supply chain or even ecosystem.
Another sign of non-resilience, which particularly applies to large organisations, is that they tend to restructure every two to three years, adapting to an ever-changing environment – but that process itself can sometimes take one-and-a-half to two years to complete. So, by the time you have gone through that effort, you need to think about doing it all over again, almost straight away.
This is not what I would call a resilient organisation – particularly as technological changes and other disruptions are following each other faster than ever before. Lengthy restructures open up vulnerabilities and leave you running behind emerging facts – therefore, they are counter-resilient. Leaders must think about resilience on a constant basis.
Too many layers
Speed of decision making is another enabler for resilience. Typically, employees who are working on the ground are closest to the organisation’s most critical activities, and are well placed to make quick decisions or improvements, according to how their day-to-day work plays out. But if their decisions need authorisation that can only be obtained by escalating ideas through multiple levels of seniority, then by the time they have a reply, their initial request may be out of date. So, hierarchies stacked in too many layers are unhelpful, because they slow down decision making.
Since the dawn of the pandemic, we have seen organisations get flatter. As a point of reference, managers would usually have around five to eight, maybe 12, direct reports. But currently, we are seeing spans of control as wide as 30 – and, in exceptional cases, 50 – people. That’s larger than we’ve ever seen before and, with all my experience, I would argue that it shouldn’t work. But because those organisations are building self-steering teams and changing employees’ mindsets, they’re pulling it off. The emphasis is less on grip of control and more on encouraging staff to think in line with culture, values and how they are contributing to the organisation – so leaders are pushing down decision rights.
I’m not saying that hierarchy isn’t important anymore, because people like clarity and somebody – or a senior team – has to take overall responsibility for the direction and goals of the business. But we are seeing less of a top-down system. So, I can definitely tell that something is changing, here, with big implications for organisational resilience.
Flexibility vs consistency
It’s difficult to say in a definitive fashion how an organisation should optimise its structure for resilience, because one size does not fit all – and optimisation will mean different things according to the size of the business, or the industry it’s working in. But I would say that, broadly, leaders must think about balancing flexibility and creativity on one side, and consistency – embodied in systems and routines – on the other.
If you look at large organisations, they tend to be rather stiff, rigid and creatively slow – a stark contrast to startups, which are fuelled much more by spontaneous creativity and are notably far more agile. Larger organisations eager to gain an edge are either partnering with startups and/or scale-ups, or have introduced agile ways of working into their processes, particularly in tandem with efforts to flatten their hierarchical structures. The lesson here is that more grip may well equal greater consistency – but then perhaps you are not as creative as you need to be.
Flexibility can be achieved when working together with partners, suppliers and customers. For example, can alternatives for components or materials be found when R&D and procurement work together to become less dependent on certain purchases? Or can demand be shaped when talking to the customer?
Resilience is often portrayed as a defensive reaction, like a shield: “Something is happening – we must protect ourselves to survive.” But a truly resilient organisation is not one that writes up a plan to be resilient for emerging pressures. It’s one that’s resilient by design. Under that model, resilience is no longer just about recovery.
If you are equipped with all the features I’ve highlighted by design, you can be much more proactive about what’s coming towards you, rather than reactive. That requires you to examine risks and opportunities through the same lens: “What sorts of advantages are we opening up by deterring this risk we’ve identified? How can that help us expand, or make more margin?”
Importantly, structure is just one part of the equation that makes an organisation work. An organisation is a system, with processes, governances, IT, culture, and most importantly, people. Leaders shouldn’t underestimate what it takes to make their people more resilient. We need to foster cultures where employees feel able to speak up when they spot risks or opportunities – environments in which they can experiment, and where noble failures that the organisation can learn from are celebrated.
So – empower your people. And break down silos.
Building an empowered culture may require you to change your leadership model from one that depends on grip to one that’s based around inspiring employees, widening your span of control and creating a thriving ecosystem of self-management.
Crucially, regardless of size or industry, resilient organisations are holistic in nature. Rather than working in silos, they consist of much shorter networks and employees from different departments talk to each other all the time. But more than that – they are also holistic in terms of how they think about their ecosystems.
Promote greater transparency, so each part of the organisation can see what all the other parts are doing, and the wider organisation has visibility into the wider supply chain or even ecosystem. That visibility was critical during the pandemic, when many global organisations had to rework their supply chains overnight. The pandemic showed that organisations that bundled their powers within an ecosystem could achieve things they would never have been able to on their own.
Above all, understand that resilience is not a one-time event – it’s a moving target. Embed the tools of resilience into your organisation’s DNA and its long-term thinking – and make a commitment as leaders to continue to think about resilience going forward.