 My book Natural Enterprise
says the way to take the risk and stress out of your business is to do
research up-front to ensure you find that 'sweet spot' where an
untapped need intersects with something you and your partners do well
and love doing. When you do that, you know that when you start up,
there will be a demand that you will be well equipped to supply.
But what happens when that situation changes? What happens
- when the needs and wants of your current customers change, so that you can no longer satisfy them as well as others can,
- when
disaster strikes, or the economy just shifts so that customers are no
longer able or no longer willing to pay you for what you provide, or
- when, due to demographic shifts, the new customers moving into your 'market space' no longer need or want what you offer.
I have suggested four ways that Natural Enterprises can deal with such changes:
- discover new unmet needs that replace
products and services that are no longer needed (or have been obviated
by other companies' disruptive innovations) -- and do some disruptive innovating yourself,
- discover new applications and markets for the products and services
you already offer,
- continuously improve your products and
services as you understand more deeply both the customer's needs and
the solution alternatives, and
- organize
and operate the enterprise improvisationally, where decisions are open
to and built on a continuous flow and exchange of information, ideas,
and collaboration, rather than based on pre-determined directives.
Some
new research indicates there is a lot more that Natural Enterprises can
do to stay resilient in the face of changing markets, economics, needs
and demographics. Not surprisingly, much of this new research
recognizes that business environments are complex, not just complicated, and that resilience is not about predicting what will happen, but having the capability to adapt positively
(not react defensively) to the changes as they occur. This research
also suggests that the best subject for study of resilience is nature,
the definitive adaptive and enduring complex environment.
This
OSU site defines resilient enterprise as one that "adapts successfully
to disruptive changes by anticipating risks, recognizing opportunities,
and designing robust products and processes". The authors lay out this
model of the resilient enterprise:
| Functional (Sense, Respond) | Structural (Organize, Build) | | Strategic (Robustness) | Adapt, Innovate, Transform | Fortify, Centralize, Diversify | | Tactical/Operational (Continuity) | Recognize, Resist, Recover | Build in Redundancy, Be Flexible, Add Security |
I
have some reservations about this model, but it's a good starting
point. I'm not sure the strategic/tactical distinction is as important
as a distinction between actions that can be taken in advance and those
that must be improvised. And some of these actions (fortify,
centralize, add security, resist) seem to me defensive rather than
resilient.
What's missing from this model? Scanning, to see what's on the horizon.
Observing, paying attention to what's happening. Imagining, asking What
If questions and dreaming of what is possible. Designing, intentional
thinking. Disrupting, changing the rules. Collaborating. Learning,
acquiring new capabilities.. Exploring, letting ideas take you where
they go. Brainstorming. Experimenting, trying lots of things and
failing fast and early. Thinking Ahead, and helping customers and
co-workers do this too. Simplifying. Canvassing the crowd, customers,
co-workers and the community at large.
Adding
them into the mix and eliminating the defensive (rather than
anticipatory) actions produces an organizational resilience model that
looks like this:
| Disruptive (Proactive) | Sustaining (Reactive) | | In Advance (Planned) | Innovate: Think Ahead, Collaborate, Explore, Disruptively Innovate, Diversify, Acquire Capabilities, Canvass | Anticipate: Build in Redundancy, Sustainably Innovate, Be Flexibly Organized, Simplify | | On the Fly (Improvisational) | Imagine: Imagine Possibilities, Brainstorm, Design, Collaborate, Learn, Experiment, Canvass | Adapt: Scan, Observe, Recognize, Adapt |
In
complex environments, there is only so much we can do in advance. We
can anticipate broad classes of challenges (such as competitive threats
and disasters) and organize so that, if and when they occur we can cope
with them. And we can 'be the change' ourselves, innovating to
challenge competitors and developing capabilities that let us expand
our offerings.
Improvisationally, we can scan for and adapt to
changes that challenge our competitive position and viability, and more
proactively we can imagine, design and introduce changes and new
offerings on a continuous basis.
All of these resilience
elements recognize that in complex environments, you can't plan for or
protect against what you can't predict. But what about the stuff big
companies do to be 'resilient' -- disaster and contingency plans,
vulnerability assessments, risk management departments, recovery
plans? These really aren't resiliency actions at all, they're steps
that rigid, unresilient organizations take to get back to their
unresilient state after unexpected occurrences.
But shouldn't
resilient organizations have IT disaster recovery plans and contingency
plans in case of pandemics or other disasters? I would suggest that a
resilient organization wouldn't have such a complicated computer system
that it is dependent on continuity of the power supply and the
integrity of its systems (and freedom from computer hackers) in the
first place. Plans for natural disasters, pandemics and hostile attacks
on your city, at the organizational
level, tend to be generic and bottom-up. They are a good idea, for the
welfare of your co-workers and (if you are in an essential service) for
those who depend on you, but as we have been finding out more and more
often of late, they only go so far -- it is what you do to adapt
improvisationally, more than how you prepare for what you can
anticipate, that will determine your success at continuity and
resumption of services.
This is still a new field, and a lot of
what little has been written on the subject of enterprise resiliency
isn't about resiliency at all, but rather continuity and recovery. It's
a subject that merits further exploration, and an added chapter to Natural Enterprise. What are your thoughts on this, and what can and should organizations do to become, and be, more resilient?
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