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Can business resilience create business performance?

Following our instinct

People have increasingly been trying to link resilience to performance in the business world over the last 10 years. Common reasons for trying to find a link between resilience and performance include:

  • The need to identify a return on investment (ROI) for resilience
  • Gaining and maintaining Board level interest by demonstrating the link
  • Identifying additional business as usual benefits of resilience on top of the usual crisis ones
  • Recognition of the similarities between definitions of resilience and competitiveness
  • ….and of course businesses are always looking for new ways to boost performance

Many business continuity and resilience practitioners are confident that there is a link between resilience and organisational performance, however proving it has remained difficult. In his blog, Ken Simpson discusses a Continuity Magazine article by Rick Cudworth and Chris Apps and agrees that resilience can deliver benefits to day-to-day operations. While this does not specifically address performance, Ken notes,

“They position resilience as something that has to be driven top-down and embedded into the organization, not an extra bolt-on piece. As a result resilience can deliver some benefits for day-to-day operations. I would certainly agree with that view!”

What about evidence?

Until recently evidence for a link between resilience and performance was mainly drawn from personal experience and intuition; however research is now beginning to find quantitative evidence. Researchers at the Resilient Organisations Research Programme have found a measurable link between resilience and cash flow, return on investment and profitability. This makes for very interesting thinking because although they have not yet identified a causal link, they can show that more resilient organisations have better cash flow, return on investment and profitability. It is entirely possible that in these organisations, there is a third factor which affects resilience and performance – I imagine it might be ‘Adaptive Leadership’, the ability of organisational leaders to constantly readdress and adjust the balance and investment between resilience and efficiency.

Resilience and competitiveness

Many popular definitions of organisational resilience include some notions of being more adaptive, flexible and responsive to changing conditions in the business environment. It would seem then that resilience and competitiveness certainly have plenty in common. Dr John Vargo and Dr Erica Seville at the Resilient Organisations Research Programme at the University of Canterbury in New Zealand have provided the table below. It shows the direct similarities in the relationship between resilience and world class competitiveness.

Feature of Resilience Features of Competitive Excellence
20/20 Situation awareness and effective vulnerability management Knowing your competition and environment
Agile adaptive capacity Being quick to respond when things change
World class organizational leadership and culture Having outstanding leadership
20/20 Situation awareness and effective vulnerability management A robust capital structure
World class organizational leadership and culture A commitment to your customer that is extraordinary
World class organizational leadership and culture A cohesive culture of quality, responsibility and service

 

Vargo, J. and Seville, E. (2010) Resilient Organizations: Trying to Thrive When You Are Struggling to Survive, a Paper Presented at the 4th Annual Business Continuity Summit 2010 Resilience over Uncertainty, 24-25th March 2010, Sydney, Australia.

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