Securing organisational resilience
Julian Lockett, technical safety specialist at Frazer-Nash Consultancy, considers how developing a systems-based resilience strategy, could reduce short-term loss and deliver long-term competitive advantage.
A healthy organisation is fundamentally resilient. It has the leadership, the people, the communication style, the business processes, the infrastructure, and the enabling technology to allow it to deal with and recover from disruption or disaster.
By adopting a systems approach to resilience, which takes a more holistic view, these organisations are able to identify and map the complex inter-relationship between these organisational attributes that enable rapid adaptation and recovery following a disaster.
People working within a resilience culture are also more likely to be motivated to implement solutions when they need to deal with unexpected events - a strategy that a major airline failed to follow, which as we’ll see had disastrous consequences.
As Charles Darwin once wrote, “It is not the strongest or wisest who will survive, but rather those that can survive change”.
Adapt, recover and capitalise
Adapting to change and anticipating disruption is critical within any industry where increasingly complex automated controls and new technologies are being implemented. For a wide variety of higher risk sectors such as the nuclear industry, the oil and gas industry and airport operators, meeting regulations and being commercially profitable is not enough to ensure long-term commercial success. The unexpected can and does happen, and being equipped and able to recover from this is key.
In my experience commercial advantage can be gained, over the long-term by those organisations that are not only equipped to adapt, and capitalise upon, anticipated changes, but identify and implement approaches such that they are able to resist and recover most rapidly from unexpected events.
This is particularly true for the higher risk I referred to earlier, where safety, competence, and accountability are key. Organisations that will benefit are those that understand and actively manage the characteristics they will need to depend upon in times of adversity. The ability to resist and recover quickly from disruption will not only minimise immediate losses, but also deliver significant benefits enabling organisations to thrive and survive ahead of the competition. It is clear then that there is a very positive business case for airport operators to go beyond simply demonstrating compliance and making a profit. They need to consider how they can be better prepared for disruption by adopting approaches where they actively manage their resilience. This makes good business sense and is an approach that could save a business from financial ruin.
A better understanding of what delivers organisational resilience also helps organisations to make the most effective changes. One of the significant challenges organisations face is that a decision to replace equipment, which can be made based on one particular driver, for instance a new regulation, can significantly impact on other aspects such as maintenance, supportability, system performance, or training. A successful enterprise must perform well in all of these, and the complex inter-relationship between these different, but related, characteristics supports both its business performance and resilience. In every case when reacting to change or new requirements, it is only when these inter-relationships are completely understood that the right decisions can be made.
Learning from the past, the importance of leadership and communication
Aviation accident inquiries support the assertion that by improving leadership, communications, and culture, accident risk can be reduced. Organisational culture should promote communication in all respects related to loss avoidance, and so how well people in a role of less authority in an organisation feel able to challenge other people about change or an unusual event is one indication of how resilient that organisation is.
For instance, in the 2013 Asiana air crash, pilot mismanagement, and poor communication were both cited as causes. The investigation concluded that a lack of organisational resilience was a major contributing factor in the crash. Documents and testimony from the National Transportation Safety Board showed that confusion and poor communication in the cockpit as it approached San Francisco International Airport in July 2013 directly contributed to the incident. Two of the pilots told investigators they opted against voicing critical concerns or grabbing the controls because they were subordinate to the instructor; few would argue that an effective safety culture, in areas such as leadership and communication, is a critical characteristic for a resilient organisation that operates in aviation.
Continuing with the Asiana air crash example, it’s also possible to demonstrate the importance of swift and well-executed external communication in order to mitigate reputational damage, something commentators agree the airline failed to do.
Commentary at the time revealed that many felt Asiana Airlines failed to address the needs and concerns of its stakeholders in the United States. In short, Asiana Airlines compounded the reputational damage done through poorly executed communication, so their loss was more broadly and more deeply felt than might have been the case.
So what tools and approaches can help?
A number of tools have been proposed to assess ‘organisational resilience’, such as the application of generally-applicable assessments that are based on extensive research by organisational psychologists. These are well founded in research and can give valuable insight but they are not specific or easily tailored to individual organisations.
Some organisations’ risks and opportunities are of a highly technical nature, and it is possible to go further than applying generic approaches. The most significant advantage can be gained by the use of additional, complementary tools and approaches whose application assist organisations in identifying and actively managing their vulnerabilities. These approaches signpost the best ways to go beyond the basic compliance management and risk-based approaches required by regulators in safety-related industries.
Whatever decisions are taken, they will be most effective when aligned with preserving and developing the ‘capital’ of the business, what it is that really makes the business work and continue to work. In the engineering industries, these decisions are to do with the effective management of opportunities and risks associated with people, technology and systems.
In conclusion then, a resilient organisation is one that consciously improves its organisational culture and communications, and that understands and actively manages those organisational characteristics and assets upon which its particular success depends. Such an approach can help to reduce accidents and aid quick recovery from unexpected events – however these are caused – and deliver real commercial advantage.