Organisational Resilience
The concept of organisational resilience was first used to describe the need for companies to respond to a rapidly changing business environment. Gary Hamel and Liisa Välikangas showed great foresight in their paper on The Quest for Resilience published in the Harvard Business Review in September 2003 by predicting a global economic crisis later in the decade that would lead to the collapse of a number of iconic US companies. They argued that successful organisations were those who understood the dynamic nature of their business environment (competitors, technology, the availability and cost of finance, taxation, government policy, and their customers’ needs and expectations) and who were able and willing to adapt to sudden and large changes to the environment. In this regard, Hamel and Välikangas argued that successful organisations should evolve like resilient eco-systems, constantly adapting to reflect the changing external environment.
Resilient organisations should have: flexible staff and adaptable supply chains; a range of products which satisfy a range of customers; and agile organisational structures. Hamel and Välikangas and others argue that large companies which rely on legacy products and traditional customers are not resilient and will suffer most in an economic downturn. As with failing eco-systems, organisations which do not adapt will collapse, to be replaced later with new and more efficient organisations which are better suited to the new environment.
Over the past two years the concept of organisational resilience has changed its focus as organisations in the private and public sectors have redefined the extent and scope of the threats facing them. As our society becomes more complex and interdependent we are becoming more vulnerable to disruptive events from a broad range of threats and hazards. If not properly managed, a disruptive event can escalate into an emergency, crisis, or even a disaster. It can taint an organisation’s image, reputation or brand in addition to resulting in significant physical or environmental damage, injury or loss of life.
The need for resilience is particularly important for organisations providing utilities and transportation and those operating in the financial sector. The availability of essential services during and following an emergency, crisis or disaster is dependent on the ability of organisations providing utilities and transportation to survive through a disruptive event. Therefore, enhancing organisational resilience is a critical step towards creating more resilient communities.
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