Strategy & Leadership

Organisational resilience

December 02, 2015

Global

December 02, 2015

Global
Victoria Tuomisto

Editor

Based in London, Victoria joined The Economist Group in 2013 and manages research projects across a range of topics including technology and education. She has previously worked within the company at The Economist Corporate Network in EMEA. Her responsibilities included researching, writing and editing business outlook reports and white papers on a range of business themes in emerging markets in Europe, Middle East and Africa.

Prior to joining The Economist Group, Victoria worked in consulting in France. She holds a Master of Science in Political Economy and a BSc in Economic History from the London School of Economics.

Building an enduring enterprise

Today’s headlines are filled with cautionary tales of world-class brands damaged by bad decisions and poor leadership. In 2015 alone, Volkswagen’s reputation was severely damaged by an emissions-rigging scandal, Toshiba dealt with US$1.2bn accounting irregularities that led to the resignation of its CEO, and Petrobras, Brazil’s state-run oil company, suffered multibillion-dollar losses in the wake of embarrassing disclosures about corruption and money-laundering. These incidents show how even strong organisations are vulnerable to upheaval—and not just from scandals. Shifting market demands, global competitors and major political or economic changes can unsettle, and even topple, established brands that are caught unprepared. 

An emerging concept for preparing to withstand such shocks, and even to benefit from future shifts by anticipating them, is organisational resilience. Resilience can be broadly understood as “staying power”—the ability to react to crises, but also the ability to structure and run a company in a way that minimises its exposure to disruptions, whether from internal or external causes.

This study, sponsored by BSI (the British Standards Institution), explores the gaps between intention and action in companies’ approach to promoting resilience. It also looks at how a sample of business executives perceives and prioritises resilience-promoting measures, what it takes to build and maintain a culture of resilience, and what best practices are being adopted to promote resilience.

Key findings include:

  • Business managers and executives agree that organisational resilience is important, but only a minority are moving in this direction.
  • Companies trust their ability to implement specific resilience-promoting practices, but their confidence in overall resilience may be exaggerated.
  • Good people and great service are key to achieving organisational resilience—today and in the future.
  • Lack of knowledge and skills, insufficient leadership commitment and the need to focus on immediate financial issues are the biggest obstacles to resilience measures.
  • Economic uncertainty, disruptive competitors and reputational harm are viewed as the leading business risks that drive the need to be more resilient.

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