Last week, Finance Minister Heng Swee Keat unveiled the SG Resilience Budget - less than a month after Budget 2020. The economic stimulus package will pour in another $48.4 billion Singapore dollars to help Singapore businesses and individuals tide over the COVID-19 crisis. It is telling that DPM Heng Swee Keat called it the 'resilience budget'. Thus acknowledging the fact that this crisis has severe implications for everyone and that extra steps need to be taken to deal with it successfully. Consequently, this unprecedented situation reveals how crucial organisational resilience is in ensuring that organisations can weather this storm.
What is organisational resilience?
In a VUCA (volatile, uncertain, complex, ambiguous) world, organisations will need to continually adapt to different environments to remain competitive and ensure its longevity. Many organisations often deal with uncertainties by having contingency plans and succession strategies. However, these processes are recovery-based models. In other words, they are reactive rather than proactive. Current literature on organisational resilience suggests that it is not enough for organisations to just deal with the aftermath; they'd also need to have the ability to tackle the issue beforehand. In a crisis such as the COVID-19 pandemic, wherein change happens quickly, proactive organisations will be more effective in adapting to the challenges.
According to David Denyer, a professor at the Cranfield School of Management, organisational resilience is defined as the ability of an organisation to anticipate, prepare for and respond effectively to small changes and sudden disruptions. Not only is a resilient organisation able to weather disruptions effectively, but it can also foresee the issue beforehand and find opportunities for change.
As the economies and organisations become increasingly interdependent, problems become more complex. When one country faces a recession, it can affect other countries' economies as well. Contradictory information and various stakeholders' interests may further complicate these problems. As such, Denyer has proposed a model of organisational resilience that will help organisations understand the steps that can take to develop and sustain resilience. This model, called the 4Sight Model, is illustrated in the diagram below.
Organisations need to be aware of what they do not know before they can anticipate and predict future problems. This is done by encouraging employees to constantly monitor possible avenues of opportunities and threats to the organisation. Organisational structures should also be examined so that errors can be detected early. At this stage, multiple perspectives will work in the organisation's favour as they are better able to uncover unknown problems.
Leaders should encourage and lead employees to step back and see the bigger picture. This will allow the organisation to understand how different parts interact with one another and how one issue can affect the whole. At this stage, employees should look for patterns and formulate theories to gain clarity on a specific problem. One way an organisation can gain insights into a problem is to always keep an ear on the ground and constantly challenge assumptions about tried and tested solutions. This way, employees will be confident in finding novel solutions to problems.
After identifying problems and thinking up solutions, an organisation should develop a system for managing and monitoring risks. This is to ensure that the resilience process can be improved continuously as the environment changes. By monitoring the process, organisations can detect whenever there are any deviations and work quickly to resolve it. Beyond ensuring that the resilience system achieves organisational goals, there should also be indicators that focus on measuring future performance readiness and continuous improvements.
Future performance can only be enhanced if organisations are willing to learn from their experiences. Nonetheless, hindsight bias can often hinder learning and create a blame culture. The focus of having hindsight should shift from who is the cause for the problem to why did the problem warrant such a response? Evaluating the reactions will help organisations ascertain situational and organisational factors that led to such responses. Which will allow them to learn how they can improve their processes in the future. Furthermore, successes should also be studied. That way, organisations can gauge how they can replicate good outcomes in other situations on top of improving processes.
Persistence and resilience only come from having been given the chance to work through difficult problems. - Gever Tulley
One important element to note is that organisational resilience looks different for every organisation. As such, spaces should be created where employees can experiment with different solutions and perspectives without fear of heavy penalisation. That way, organisations can determine the most effective way to be resilient. Organisations should also understand that failures are always possible but they should be approached as opportunities for learning.