Over the past several years, economic change has been driven largely by digital innovation and disruption, yet with the arrival of COVID-19, business leaders must prepare for more radical change. Organizational resilience has therefore become a top priority for many companies around the world.
In a stable economy, efficiency often takes precedence, and for good reason – efficient business practices are faster, less costly, and they drive more revenue growth.
However, as we’ll see below, in today’s volatile economic environment, resilience should become the leading business principle.
Why Resilience Has Become a Strategic Imperative in 2020
The COVID-19 crisis has, among other things, revealed vulnerabilities throughout the global economic system.
The need to maintain public health and safety, for instance, has disrupted business operations, global supply chains, and the economy as a whole.
Those companies that have been hit the hardest were those the least prepared, including:
- Companies that lacked business continuity plans
- Organizations lagging in the digital race
- Institutions without a digitally savvy workforce
- Businesses without enterprise change management functions
In short, those organizations suffered the most that were the least resilient.
And, as McKinsey has pointed out, this crisis has only served to widen the gap between industry leaders and laggards.
While these challenging times are undeniably difficult and taxing, there is a silver lining for those who are willing to go all-in on organizational change.
Radical Change: A Silver Lining and An Opportunity for Growth
Today’s radically changing economy will, according to some analysts, remain volatile for years to come.
In part, this volatility will be due to the effects of COVID-19, which will leave a permanent mark on society and the economy.
However, many analysts have pointed out that the pandemic is only accelerating changes that have been occurring for years.
Digitization and digital transformation, for instance, have been ongoing for years – yet with the arrival of COVID-19, technology-driven innovation has accelerated significantly.
As mentioned above, this acceleration has been detrimental to many, but it also presents a silver lining for those businesses that are willing and able to change.
Below, we’ll look at two strategic imperatives that should top the corporate agenda in 2020 and beyond: resilience and organizational change.
Organizational Resilience: A Stable Foundation in Unstable Times
Organizational resilience aims to build business structures, processes, and strategies that can withstand disruptive events and circumstances.
One common approach to weathering business disruptions is to create business continuity plans, which is certainly one of the best tactics.
Business continuity, however, represents reactive measures to take during a disruption, such as:
- Disaster recovery
- Emergency response
- Crisis management
Restoring normal operations in the event of a crisis should naturally be a top priority.
However, there are proactive approaches that can help prevent, mitigate, or avoid potential losses – namely, companies can build resilience into the organization before a disruption ever occurs.
Organizational resilience frameworks vary from source to source, but often include the application of business disciplines such as:
- Business continuity
- Financial health
- Human resources
- Data and information security
- Legal and compliance
- Organizational behavior
- Risk management
A well-rounded, proactive approach to risk mitigation, in other words, can help organizations maintain operations during difficult and volatile environments.
However, to actually maintain or accelerate growth during a crisis such as the COVID-19 pandemic, it is necessary to go one step further.
Organizational Change and Agility: The Opportunity for Growth
Organizational agility refers to an organization’s ability to adapt, change, and stay flexible.
This quality is especially important during volatile economic conditions and crises, which often require innovation, speed, and flexibility.
On the one hand, that flexibility improves organizational resilience. On the other, it enables businesses to capitalize on new opportunities – if not in the short-term, then in the long-term.
In the coming months and years, for instance, the companies that profit the most will be:
- Those who can transition to digital-first business models
- Organizations that can redesign processes and practices for a technology-driven world
- Businesses with the most flexible and agile workforces
- Enterprises with advanced change models and strategies
Organizational agility goes hand-in-hand with every item on this list.
The ability to successfully implement organizational transformation, for instance, directly impacts how quickly and how well a company can pursue new growth opportunities.
Likewise, employees who are digitally skilled and open to change will be able to drive new business initiatives more effectively.
Agility can be applied in a variety of business contexts, from business processes to organizational structure to product development. Rather than viewing it as a practice or a process, it is useful to view agile as a principle, then apply that throughout the organization.
In a cultural context, Gartner advises adhering to tenets such as:
- People over processes
- Dynamics over documents
- Collaboration over cascading
- Adaptive over prescriptive
- Leadership over management
It should be noted, however, that these principles can be applied in many contexts, not just in agile organizational culture change.
In fact, Gartner’s axioms closely mirror those in the Manifesto for Agile Software Development:
- Individuals and interactions over processes and tools
- Working software over comprehensive documentation
- Customer collaboration over contract negotiation
- Responding to change over following a plan
The same underlying ideas, in other words, can be used throughout a business to enable change, improve adaptability, and help a company move forward – even during times of disruptive, radical change.