organizational resilience · 6 resilience resilience what do we mean when we talk about resilience?...

Organizational Resilience: what, why, how and how much?

Dr Robert MacFarlane

Civil Contingencies Secretariat

EPC, 8th April 2015

Resilience

National Security and Resilience

2 Resilience

Resilience Resilience 3 Resilience

What does Resilience look like?

What is being written about Resilience?

What do we mean when we talk about Resilience?

Persistence through disruption, damage or change

Rooted in an physical sciences view of the world

Business continuity “Bouncebackability”

„Traditional‟ Perspectives on Resilience

The “Rubber Onion” Model

(Elliott & Johnson, 2010)

Responding to Mode Shifts?

The Adaptation Challenge?

What do we mean when we talk about Resilience?

Persistence through disruption, damage or change

Rooted in an physical sciences view of the world

Business continuity “Bouncebackability”

Successful entities deal with and adapt to change

Resilience as continuity and adaptability

“Bounceforward”

What does “good” look like?

Goldman Sachs, Lower Manhattan, Hurricane Sandy, October 2012

• It appears to be easier to identify organizations that dramatically fail to

demonstrate resilience than quietly do demonstrate resilience

• It appears to be easier to identify organizations that dramatically fail to

demonstrate resilience than quietly do demonstrate resilience

Why does resilience matter?

• To organizations: human and physical loss, sullied reputations, crash in value,

failure to live up to the things that customers, stakeholders and competitors take

for granted about you, takeover or close-down

• To all of us: risk to life and property, loss of assets, cascading supply-chain and

infrastructure failure, loss of credibility and confidence in national institutions,

psycho-social impacts

• To government: resilience as an intrinsic element of national security

But resilient against what?

UK National Risk Register

Business Resilience

Planning Assumptions

Most of these are „outside-in‟ risks

So, what‟s missing?

Most of these are „outside-in‟ risks

So, what‟s missing?

Source: adapted from AIRMIC (2011) Roads to Ruin

• Board knowledge and skills

• Risk blindness at most senior levels

• Defective communication / „glass ceilings‟

• Risks arising from excessive complexity

• Risks arising from inappropriate incentives

• Poor leadership on ethos and culture

• A wandering moral compass

• Good, old fashioned over-confidence

Resilience: thinking as well as building…

New Jersey Transit NYC Transit

Hurricane Sandy, 2012

(Why) Do you want more Resilience?

Oxford Metrica (2012). The impact of reputation crises on shareholder value

Really? But we do all

already…

asset management

risk management

stakeholder and collaboration management

reputation management

horizon scanning

environmental management

health and safety fraud control

business continuity

change management ICT continuity

information security

physical security facilities management emergency management

crisis management

supply chain

quality management

human resource planning

financial control

Lots of ideas, disciplines and activities

Resilience: a set of ideas, and activities, that

are „nested‟ within one another

ORGANIZATIONAL RESILIENCE: ability

of an organization to anticipate,

prepare for, and respond and

adapt to incremental change and

sudden disruptions in order to

survive and prosper

We‟ve got absolutely

nothing to do with the

risk management

department, we never

speak to them

The incident management

arrangements are not

linked in any way to the

crisis management

arrangements

It‟ll never happen

to me (NIMPOO)

We don‟t “do”

crises – everything

is swept up by

We‟ve

eliminated the

What was the

question

again?

• It is a pervasive quality/attribute/ability of an organization

• It is rooted in a series of capabilities

• It is not a fixed activity or state

• More than getting through the bad times

• Elements of continuity (survive) and adaptability (thrive)

• Effective leadership is a must, but OR is everyone‟s business

• Structure and process required, but „soft‟ factors are essential

• Organizations are embedded within networks, and so is OR

What are the fundamentals of OR?

Is Resilience an End in itself?

Values (london.gov.uk)

Value (N Rock, 2007) Strategy Reputation

Resilience

Models and Metaphors for Resilience: “soft inner, hard shell”

AIRMIC PwC Wolin & Wolin

Models and Metaphors for Resilience: “rolling wheel”

BS65000 EPC

Models and Metaphors for Resilience: “overarching”

Models and Metaphors for Resilience: “integration strength”

Courtesy of Aaron Gracey, Squared Apple

Models and Metaphors for Resilience: “DNA”

Models and Metaphors for Resilience: “process / creativity”

Damian Ortega, Cosmic Thing, 2002

Protection

Resistance

Reliability

Redundancy

Preparation

Culture, Attitude, Behaviour and Resilience

If you have a bunch of people in a room all agreeing with each other

then at least one of them isn’t thinking (attributed to Eisenhower)

• Winston Churchill‟s knowledge

audit, developed following the

fall of Singapore in 1942:

• Why didn’t I know?

• Why didn’t my advisers know?

• Why wasn’t I told?

• Why didn’t I ask?

“From Boardroom to Storeroom”

R A G R A G B

“The normalisation of deviance”

Resilience Resilience

40 Resilience

How are we doing?

Source: BS65000

41 Resilience

How are we doing?

People do what you inspect, not what you expect

(IBM CEO Lou Gerstner)

If you can‟t measure it, you can‟t manage it

(W. Edwards Deming)

Or did he…?

Deming is often quoted as saying, "You can't manage what you

can't measure.” Whether this is true or not, he also stated that

one of the seven deadly diseases of management is

running a company on visible figures alone.

Operational risk

Strategic risk

43 Resilience

How are we doing? Metrics and measures?

Maturity models?

Benchmarking?

Certification?

Audit?

Reliability?

Validation?

Gut feel and intuition?

Risk appetite?

• As leaders, do we have a clear vision of where we as an organization

should go, and what we should avoid?

• Does resilience form a part of our Board agenda for regular consideration?

• Have we established which strategic and operational responsibilities

support us to become more resilient?

• Are we confident that our approach to resilience will stand up to external

scrutiny?

• Are we satisfied that our approach to resilience is truly coherent?

• Are those responsible for delivering greater organizational resilience

empowered to work across boundaries and able to speak to top

management easily?

Are these tough, or easy questions to answer?

Key issues:

• Understanding the value that

resilience has for your organisation

• Coherence: resilience as a coming

together of ideas, practices,

strategic-operational levels,

frameworks and ways of working

• Culture: people make it / break it

• Persistence: you never get “there”

• Validation: a good hard look

ORGANIZATIONAL RESILIENCE: ability of an

organization to anticipate, prepare for, and respond

and adapt to incremental change and sudden

disruptions in order to survive and prosper

Challenges:

• Narrow compliance mindset

• Overconfidence: “we‟re sorted”

• Flawed assumptions

• Org Res EQ sum of parts

• Complete delegation

• Failure to learn

Thank you

robert.macfarlane@cabinet-office.x.gsi.gov.uk

organizational resilience · 6 resilience resilience what do we mean when we talk about resilience?...

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