Kotinos MD James Bowen explores what high performance organisations do to build organisational resilience and avoid crises.
When discussing the topic of resilience, we often hear leaders speak with pride about how their organisations are at their best in times of crisis: heroes emerge from the shadows, everybody goes the extra mile, and coping actions are taken quickly to keep the show on the road. As a matter of fact, we have never heard a single leader suggest the opposite of his or her team and, human nature being what it is, we are sure that crisis usually does bring out the best in organisations. However, judging resilience based on crisis performance is an example of not seeing the wood for the trees. High performance organisations, while they usually do perform well in a crisis, tend to have considerably fewer crises in the first place.
High performance organisations, while they usually do perform well in a crisis, tend to have considerably fewer crises in the first place.
Effective risk management is at the core of minimising the incidence of crisis. In practice, however, we find too often that risk management is a peripheral, bureaucratic activity focused on cataloguing the list of things that might go wrong, and then reducing the length of the list by addressing those that are easiest, first. Furthermore, identification and evaluation of risks tends to be in the context of what the organisation is doing today rather than what it aspires to do tomorrow – avoiding obstacles rather than enabling growth.
High performance risk management is fundamentally different. Its focus is much more strategic and it is managed in the context of what the organisation aspires to achieve. The job of high performance risk managers is about identifying the biggest obstacles to winning and facilitating leadership teams in proactively addressing these ahead of time. It is also about identifying and tracking leading indicators – both internal and external to the organisation – that give early warning as to potential setbacks that might arise in the business’ journey, and finally it is about designing and practicing strategies for avoiding (in the first instance) or coping (in the second) with these setbacks that minimise their impact.
The best organisations in the world tend also to be the most resilient, however their capability is often understated and difficult for outsiders to discern. Building high performance risk management as a strategic capability is vital to building resilience and a must-do for leaders who want their organisations to win.