Organisational Resilience through constant change
Organisational Resilience is not a new concept, but disruption caused by COVID, rising energy costs, inflation, competition for talent and the increased demand on services are reminders of its importance.
In an increasingly disrupted world, risk and insurance managers, and senior leaders, need to have a plan to achieve or maintain organisational resilience.
What is Organisational Resilience and why is it important?
Being resilient sets you apart from your peers and builds confidence for stakeholders. The British Standards Institute defines organisational resilience as: “the ability of an organisation to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper”. Achieving resilience is not easy but organisations that are resilient are more likely to prevent shocks and recover quicker than peers when risks or incidents happen. They are also more likely to perform better in the long run to the benefit of communities, service users and the public.
Managing sudden and gradual change effectively requires a deliberate approach to organisational resilience. Zurich has re-examined the elements of organisational resilience and developed a framework to achieve or maintain it. This means risk management needs to move from a once-a-year task to a dynamic, continuous effort. In the current environment this is a basic prerequisite for emerging with your reputation intact and your organisation fully behind you.
How do we implement it?
Zurich’s organisational resilience framework has three interconnected layers:
- Managing the need to stretch between seemingly paradoxical states of being agile and innovative, and consistent and stable at the same time
- Confidence in assessing the external environment, people, and services and processes
- Embedding the disruption management cycle
Stretching to fulfil obligations and achieve objectives
Delivering core services, while innovating and managing disruption requires organisations to exhibit certain characteristics that often stretch behaviours and priorities by going in opposite directions. To thrive in both the current and future risk landscape, public sector organisations need to manage that ambiguity and the uncertainty that follows. The stretch layer describes the organisation’s ability to
- consistently deliver services to the expected standards while also innovating, and transforming to permanently improve and realise opportunities
- provide stable service delivery while also showing the agility to adopt alternative ways of working in response to changing circumstances.
Resilience requires organisations to identify the requirements of their situation and deliberately choose which state is needed at each moment depending on the situation. For example, local authorities asked to reduce costs in times of austerity were also expected to be able to quickly scale up resources to deal with sudden disruptions. There is a stretch between the need for innovation without risking the funds needed to deliver statutory services.
Navigating this requires organisations to identify how much to consolidate current services and strengthen consistency, and how much to seek change and innovate. Although the dimensions may seem mutually exclusive, organisations are required to satisfy both simultaneously. To manage this stretch, a resilient organisation requires the leadership skills and culture to seek stability when possible and be agile when needed. It also requires awareness of where the organisation is being stretched, and the ability to adapt and execute strategic and operational plans as circumstances change.
Environment
To build or maintain resilience organisations must have a deep understanding of the external environment, the strengths and weaknesses of its operational environment, people and culture. Changes in customer or service user behaviour or expectations, demographics, and the resilience of strategic partners need to be monitored and understood. Risk leadership and culture, clear risk appetite, horizon scanning, and strategic planning all influence how effectively this layer is managed.
Disruption Management
The framework’s third layer deals with the need to anticipate, prepare, respond, and adapt to disruption. Disruptions can be sudden and unexpected or gradual and happen over time.
Effective disruption management requires the disciplines that support the achievement of core objectives, such as strategic and operational risk management, disaster recovery, emergency management, and business continuity.
With thorough planning and effective implementation these can reduce the effect of disruption and organisations will speed up their bounce back or even bounce forward to thrive after the event. Disruption management describes the organisation’s ability to
- manage risks and anticipate future disruptions and its impacts,
- reduce vulnerability via planning, training, and exercising to prepare for the disruption,
- respond and keep functioning in a period of high stress and ambiguity
- return to a functional state by adapting and improving through change.
Summary
Resilient organisations are more likely to be successful in the long term. They are more likely to respond effectively to change, shocks and opportunities. Organisational resilience can be assessed, measured, and improved. Resilience is a result of an integrated and dynamic relationship between the environment, effective disruption management and stretching between stability, agility, consistency, and innovation. Resilient organisations maintain continuous effort to build resilience and have skilled leaders suited for business as usual and crisis situations. They have a culture that accepts ambiguity and is willing to learn and adapt to changing circumstances. Uncertainty is uncomfortable, but resilience requires embracing discomfort and being willing to continuously change. The way forward is to embrace the uncomfortable uncertainty knowing it holds resilience.
Our team of Risk & Resilience specialists work with organisations in the public sector, housing, education, and charity sectors to implement solutions that improve organisational resilience. Speak to your Zurich Municipal contact or email zrs.enquiries@uk.zurich.com
