Agility-Resilience: The Post-Pandemic Model

There is a new organizational model in town: the agility-resilience construct. Agility is active, resilience is reactive.  And when you combine them, you’ve got an organizational performance that is highly competitive. How do you do that? It requires quick decision-making and critical thinking.  It also requires a culture that can adapt to change in a nurturing way, accept bad news, and reinforce cross-functional collaboration and feedback.

Resilience + Agility

Agile is a process used by the tech world of continuous iteration in solution development as opposed to a waterfall, streamed approach. Agile has been morphed into agility in the non-tech business culture, which is basically the ability to pivot and change in response to new opportunities and challenges.  Not to overly complicate the matter, agility encompasses agile!

Agility makes most organizations better able to compete in today’s disruptive, fragmented, always changing markets and work cultures.  We include the work environment because it follows the same flow as marketplaces with new challenges given an increasingly multi-generational workforce, the digital and technical prowess of next-gen staff and leaders, and the emergence from a sustained and game-changing pandemic. Add to this, the pressures of ESG (Environmental, Social and Governance) and DEI (Diversity, Equity, and Inclusion), and you have a perfect multiple storm front.

Agility demands foresight, planning, and the ability to make decisions quickly.  By definition, agility requires critical thinking that taps into specific management skills and responses from stakeholders. Both the organization and its employees need to be ready to accept change, not have change imposed on them…anticipate the future, not catch up to it.

Resilience was popularized by Warren Bennis iconic scholar, organizational consultant, author, and Professor of Business Administration and Founding Chairman of The Leadership Institute at the University of Southern California in 2002 as a crucible of leadership, examining the different ways that leaders deal with adversity. According to Bennis, “One of the most reliable indicators and predictors of true leadership is an individual’s ability to find meaning in negative events and to learn from even the most trying circumstances.”

Simply speaking, resilience is the ability to learn from failure and recover quickly from setbacks. Resilience in business characterizes how quickly, and actionably organizational systems can bounce back to a positive state and resume normal operations following a disruption.  In today’s marketplace, disruption is in full force as the result of several different, simultaneous variables including Covid, social unrest, financial pressures, compromised supply chains and the demands of managing a diverse workforce and customer base.

Bennis’s studies on resilience spawned an entire industry on resilient leadership skills and strategies. Practicing resiliency is critically important, but there is an important nuance to factor in. Resilience in 2021 and beyond must recognize that although variables at play may seem similar to the past, today’s environment is radically different as digital continues to fundamentally change society.

Living in a Post-Covid World

A recent Deloitte study for Davos reports, “Most global business leaders believe 2020 may not be an outlier.” We agree with Deloitte’s findings. 2020 is not an outlier and should really be viewed as a year filled with events that have fundamentally changed the environment that we live and work in. Historically, events tend to create immediate societal changes and greatly impact the next generations. Consider the Long Depression in 1873-1879 when the run on banks resulted in people hiding their money in mattresses, spending less, and making the most of what little they had. Children of this Depression learned behaviors and values from their parents and grandparents that then informed their own lives emotionally, psychologically, and financially. The Roaring 20s is documented as a fun, high-flying time across society. Come 1929, everything changed with the Great Depression. Let’s face it, 2020 is going to be similar to 1929 in so many ways.

We are a resilient species and we quickly adapt. That being said, we often overlook the levels of post-traumatic stress that become embedded in our thought processes which then affect both our personal and professional decision making. We are already starting to experience PTSD, and we’re not even through the pandemic yet.

A variety of recent headlines describe CEO leaders that recognize much has changed and how they are adapting to new conditions and circumstances and planning to move their workforces physically back in the office. Anyone trying to return to normal and believes everything is going to go back to what it was is living in an illusion. Fear, desire not to change, or the simple inability to grasp what has really happened will inevitably impact decision making, and we can guarantee this unrealistic approach will not power agility or resilient organizational practices.

Why Resilience Matters

More than six in 10 of those Deloitte surveyed said they think we’re likely to see either occasional or regular disruptions of this scale going forward, and three-quarters of CXOs said they believe the climate change crisis is of similar or greater magnitude than the pandemic. Assuming they’re right, organizational resiliency is more critical than ever.” The report adds, “Taking early action matters and resilience is as much about thinking ahead as it is about doing what it takes to respond and recover from a crisis.”

At 2040, we work with our clients to master the skills required for agility and resilience. Both require quick decision-making and critical thinking.  Both also require a culture that can adapt to change in a nurturing way, accept bad news, and reinforce cross-functional collaboration and feedback.

This is especially important since the industries our clients serve are grappling with how to transform their businesses and workplace cultures to remain relevant to their customers, subscribers, and members. Although you may think an agility-resilience model may not relate to your own organization, it definitely frames the strategies and operations of the industry you serve. And what better time is there to master agility-resilience than responding to the fallout of a global pandemic?

Two Are Better Than One: The Agility-Resilience Construct

What is the agility-resilience model?  According to Elaine D. Pulakos, Tracy Kantrowitz and Benjamin Schneider cited in The American Psychological Association, “Three organizational characteristics—stability, rightsized teamwork, and relentless course-correction—were all shown to have significant direct effects on agility-resilience, which in turn, served to mediate relationships to organizational financial performance.”  In fact, they find that the combination of agility and resilience has proven results, “The agility-resilience construct was shown to be significantly related to measures of corporate financial performance, with companies high on agility-resilience showing 150% higher return on investment (ROI) and 500% higher return on equity (ROE).”

Deloitte adds, “Across the board, organizations that had implemented key actions prior to 2020 surfaced as leaders in resiliency. Typically, agility-resilient organizations had already invested in workforce initiatives like reskilling their employees or redesigning work. They had diversified operations and developed technological capabilities to drive new business models. They adapted to remote working, kept employees safe and maintained trust between leaders and employees. Their organizations valued diversity, equity and inclusion and they were committed to improving the environment and strengthening communities.”

The organizations that practice agility-resiliency have been adept at navigating 2020 and focused on the long game. They are highly oriented on making lasting strategic decisions, not knee-jerk tactical decisions that ran counter to the organization’s abilities, performance and contribution to ROI and ROE.

Conducting business today to deliver beyond expectations has become a dance of science, art, and courage. That being said, an agility-resilience model addresses what companies need to do differently to compete and survive. According to Pulakos, Kantrowitz and Schneider, “Creating new knowledge quickly, innovating, and launching new strategies to beat the competition have become priorities in the business environment. To succeed, companies need to solve ambiguous problems; respond quickly to complex, evolving situations; and recover quickly from jolts. These challenges have given rise to a belief that agility is essential for business success and survival today.”  Authors Worley, Williams, and Lawler add, “Organizational agility entails proactively sensing and redirecting to chart a competitive path by rapidly reallocating resources, building new capabilities, and jettisoning assets and activities that no longer create value.”

At 2040 we suggest individuals and teams demonstrate agility, but often the results can be compromised by siloed operations that are short-lived and rarely if ever permeated throughout the entire organization. Yes, some ROI and ROE can be gained from the silo approach, but it is limited and results in an organization that remains rooted in past practices.

Worley, Williams and Lawler further state that organizational agility is likely to be most important for overall competitive success, and it requires a holistic and coordinated approach across products, technology, operations, structures, systems, and talent.”

A holistic approach allows for the necessary understanding as well as the ability to form the foundation for organizational transformation. Let’s take a look at a shortlist of organizations that fall in one or both practices.

AGILE	RESILIENT
Alphabet Amazon Apple Facebook LVMH Moderna Nike Pfizer Tesla Walt Disney Co. Zoom	Airbnb Conde Nast CVS GM IBM Microsoft Netflix Starbucks Target Uber Walmart

 

Have all these organizations been successful in their adaptations and practices? No! Some like IBM are still struggling to find their new place in the market and environment, but they continue to try new things and are oriented towards new business lines and offerings.

Starbucks, known majorly as a highly successful company had its own challenges several years ago as its rapid growth and expansion were challenged and mitigated by several new competitors. Yet Starbucks was able to recognize the new variables at play and strategically and tactically adapted by practicing agility and resiliency. Although the road was bumpy for a few years, they came out on top and have stayed in their highly competitive position.

Roadmap to Agility-Resilience

Defining the virtues of an agility-resilience model is easier said than done.  Organizational behavior attributes including “nimble, fluid, and adaptable,” come to mind. But how do you execute these concepts? If you unpack agility-resilience there are several drivers to success, according to Pulakos, Arad, and Plamondon:

• Interpersonal
• Cultural
• Handling stress
• Embracing change
• Shifting gears

Keep in mind that it is easy to quickly define these factors according to our own values and beliefs. But remember, these drivers are situational and there is not a one-size-fits-all solution. Shared best practices can be insightful, but your approach is unique to your own organization.

Pulakos, Arad, and Plamondon add, “Work needs to be structured in more fluid and connected ways, with networked teams that flexibly bring together cross-functional skills. These will spark innovation, accelerate the speed of delivery, and enable entire organizational systems to be agile and change quickly. Most employees today participate in multiple cross-functional teams and work on multiple projects with different teams simultaneously.”

With this change in how work is structured come increasing requirements for communication, coordination, and collaboration across individuals and teams. What we often find is the communication, coordination and collaboration become significant work, quickly consuming a worker’s day-to-day at the expense of progress, and often misattributed as accomplishment without tangible outputs.

The key to agility-resilience success is to be sensitive to people, processes, and culture. It takes a lack of ego to recognize that previous plans may no longer be relevant or even useful and a course correction is in order.  It requires a lack of bias and genuine empathy to tap into the collective talents of a workforce to draw out meaningful contributions and innovations.  It also demands an understanding of the skills and perspectives of stakeholders to work together across functions to benefit from the “wisdom of crowds.”

Agility-Resilience by Design

The key characteristics of organizations who have adopted the agility-resilience model include the following:

• Deep data-oriented understanding of customer and member needs.
• Clearly stated short- and long-term goals with an emphasis on continuous learning.
• Key performance indicators are reviewed on a regular basis across functions.
• Open, honest, and regular dialogue about challenges and concerns.
• Regular cross-functional meetings and communication at all levels of the organization.
• Cross-functional teams focusing on impactful and responsive opportunities.
• Cancellation of programs, practices and products that do not produce value.
• Incentives that reward calculated risk-taking but do not promote individual competitiveness that compromises team and organizational function.

We often run into situations in organizations that throw up constant roadblocks in an effort to hold onto the past. If you build a resilient organizational culture that embraces agility, the outcomes will follow. Pulakos, Kantrowitz and Schneider state, “Command-and-control hierarchies that we’ve used for decades are not fit for today’s work environments. Instead, work needs to be structured in more fluid and connected ways, with networked teams that flexibly bring together cross-functional skills. The idea is that these will spark innovation, accelerate the speed of delivery, and enable entire organizational systems to be agile and change quickly.” Command and control hierarchies are remnants of the industrial age. We now operate in a digital economy that is predicated on collaboration.

When Is Too Much Too Much?

In closing, let’s circle back to the challenge of over-communicating, coordinating, and collaborating. As much as next-gens want to make organizational policy as peers and be respected and “heard” voices across the organization, there is a balance to ensure that communication, coordination, and collaboration don’t become distractions.  To reemphasize the point that one size doesn’t fit all, it is important to know and understand your organization’s culture and how to create and build a resilient organization that embeds agility.

• Being agile and resilient means practicing what you preach.
• Create a stable, open-minded workplace culture.
• Know that communications are always a challenge with different voices and perspectives that set the tone.
• Be disciplined; agility-resilience requires rigorous critical thinking.
• Set the course, empower your teams to work together to adhere to the plan, and enable them to deliver the innovations your organization needs to thrive in a complex, disruptive marketplace.

Remember, the environment has changed and much more change is coming. Where we are headed isn’t completely known, but by practicing resilience and agility, you and your organization will be ready to adapt and thrive.