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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
Resilience Resilience 4 Resilience
What does Resilience look like?
Resilience Resilience 5 Resilience
What is being written about Resilience?
Resilience Resilience 6 Resilience
What do we mean when we talk about Resilience?
FROM
Persistence through disruption, damage or change
Rooted in an physical sciences view of the world
Business continuity “Bouncebackability”
Resilience Resilience 7 Resilience
„Traditional‟ Perspectives on Resilience
The “Rubber Onion” Model
(Elliott & Johnson, 2010)
Resilience Resilience 8 Resilience
Responding to Mode Shifts?
Resilience Resilience 9 Resilience
The Adaptation Challenge?
Resilience Resilience 10 Resilience
What do we mean when we talk about Resilience?
FROM
Persistence through disruption, damage or change
Rooted in an physical sciences view of the world
Business continuity “Bouncebackability”
TO
Successful entities deal with and adapt to change
Resilience as continuity and adaptability
“Bounceforward”
Resilience Resilience 11 Resilience
What does “good” look like?
Goldman Sachs, Lower Manhattan, Hurricane Sandy, October 2012
Resilience Resilience 12 Resilience
What does “good” look like?
• It appears to be easier to identify organizations that dramatically fail to
demonstrate resilience than quietly do demonstrate resilience
Resilience Resilience 13 Resilience
What does “good” look like?
• 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
Resilience Resilience 14 Resilience
But resilient against what?
Resilience Resilience 15 Resilience
UK National Risk Register
Business Resilience
Planning Assumptions
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Most of these are „outside-in‟ risks
So, what‟s missing?
Resilience Resilience 17 Resilience
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 Resilience 18 Resilience
Resilience: thinking as well as building…
New Jersey Transit NYC Transit
Hurricane Sandy, 2012
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(Why) Do you want more Resilience?
Oxford Metrica (2012). The impact of reputation crises on shareholder value
Resilience Resilience 20 Resilience
Really? But we do all
these
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
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Lots of ideas, disciplines and activities
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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
Resilience Resilience 23 Resilience
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
BCM
We‟ve
eliminated the
risk
What was the
question
again?
Resilience Resilience 24 Resilience
• 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?
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Is Resilience an End in itself?
Values (london.gov.uk)
Value (N Rock, 2007) Strategy Reputation
Resilience
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Models and Metaphors for Resilience: “soft inner, hard shell”
AIRMIC PwC Wolin & Wolin
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Resilience Resilience 28 Resilience
Resilience Resilience 29 Resilience
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Models and Metaphors for Resilience: “rolling wheel”
BS65000 EPC
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Models and Metaphors for Resilience: “overarching”
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Models and Metaphors for Resilience: “integration strength”
Courtesy of Aaron Gracey, Squared Apple
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Models and Metaphors for Resilience: “DNA”
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Models and Metaphors for Resilience: “process / creativity”
Resilience Resilience 35 Resilience
Damian Ortega, Cosmic Thing, 2002
Resilience Resilience 36 Resilience
Protection
Resistance
Reliability
Redundancy
Preparation
Re
co
ve
ry
Re
sp
on
se
Resilience Resilience 37 Resilience
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)
Resilience Resilience 38 Resilience
Culture, Attitude, Behaviour and Resilience
• 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”
Resilience Resilience 39 Resilience
Culture, Attitude, Behaviour and Resilience
R A G R A G B
“The normalisation of deviance”
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40 Resilience
How are we doing?
Source: BS65000
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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.
Resilience Resilience 42 Resilience
Operational risk
Strategic risk
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43 Resilience
How are we doing? Metrics and measures?
Maturity models?
Benchmarking?
Certification?
Audit?
ROI?
Reliability?
Validation?
Gut feel and intuition?
Risk appetite?
Resilience Resilience 44 Resilience
• 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?
Resilience Resilience 45 Resilience
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
Recap
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