Mike Ettling, CEO of Unit4, transforming the People Experience of enterprise software.
Out of personal interest, I have been researching microbiomes and how good gut health is essential to well-being. You might think it has nothing to do with organizational resilience, but it is a good analogy. If you look after the health of your organization, the team will perform better; a logical statement, but making it a reality is not that simple. Like the human anatomy, there are many moving pieces, making it a highly complex task to build and maintain resilience, which is perhaps why not many companies have been successful in achieving it.
Culture Must Be Cultivated
I would argue that the most important pillar of building resilience is company culture. Today, people are the most important “asset.” One recent article suggested that: “In 1975, 83% of S&P 500 assets were ‘tangible’: plants, property, equipment and other physical goods. But by 2015, 84% were ‘intangible’: the humans who power the knowledge economy.”
Strong leadership is key to creating the right culture. Leaders set the tone; they give employees the reassurance of clear direction and empower them to take action. This is not only an important framework for employees to understand and operate within, but it also creates shareholder value.
Navigating A Complex World
Leaders must understand the impact of many factors in the quest for resilience, such as technology and automation. It has played a large part in breaking down barriers, opening up opportunities and changing the dynamics within organizations, but it is evolving so rapidly that it can be difficult to keep up. Take ChatGPT, for example. Leaders must create the right environment to enable employees to adapt to new technologies like it.
In addition, flexible working is now a priority for many companies, but there is a great debate about whether employees should return to the office. Leaders must think carefully about these policies, as they have a significant impact on employee motivation, as well as talent acquisition and retention, which will ultimately affect the resiliency of an organization.
Understanding the vast array of geopolitical factors impacting market dynamics is also critical. I believe we are on the cusp of seeing a shift in how global markets operate, as BRICS become more self-sufficient and less dependent on trade with the G7, which will most likely lead to resilient organizations seizing opportunities to reach new markets.
Evolving global markets are also changing how companies operate. Among our professional services customers, we are seeing more organizations develop global delivery models, where remote staff contribute to projects. This model means that CEOs are not as focused on country-by-country P&Ls as they are on the global lines of business, which creates different dynamics for managing people and reporting lines.
Taking The Lead
There is now even more pressure on leaders to lead. As I wrote recently, CEOs need to demonstrate a path to break even in two years by focusing on key areas.
For example, if leaders want to create a culture of curiosity that inspires employees to be innovative, they must manage for success. One aspect of this involves ensuring leaders have an in-depth understanding of the changing market dynamics and regulatory requirements, which places more responsibility on the office of the CFO. Finance teams must work closely with CEOs to provide a single, complete view of the business including accurate, real-time data for agile decision-making.
When it comes to technology and automation, leaders need to be able to operate at the speed of technology, which is about helping employees develop technical and coping skills. By giving teams clarity around policy on generative AI, leaders can build a supportive, respectful culture. Embracing AI-infused tools can also automate repetitive or mundane tasks to release employees to focus on higher-value work that offers more fulfillment and job satisfaction.
The pandemic taught us that personalized communications impact organizational culture and resilience to ensure all stakeholders feel engaged and valued. This can be challenging for leaders, as it requires a willingness to set up a variety of face-to-face and virtual mechanisms. This may appear to add complexity, but it actually empowers colleagues to take responsibility.
During the lockdowns, Unit4 employees ran everything from personal training sessions to meditation and kids’ classes. I had a call every week with our people experience leads in every geography to hear feedback from their market. Having these insights is invaluable to ensuring leaders are communicating in the most effective way to different groups within an organization.
Leading Risk: Balancing Adversity And Risk
While a lot of the emphasis around leadership is understandably about how to help employees cope, there is also a somewhat counterintuitive point that stress can be a good thing. Indeed, BCG argues that “organizational resilience depends on personal resilience.”
It is true that during the pandemic we were all called upon to demonstrate resourcefulness and adaptability. Leaders should enable employees to take risks, but they also have a responsibility to set up guardrails and ensure the right balance between adversity and stability.
This does talk to the other pillar of organizational resilience, taking positive action. Take the example of Space X. Its rocket program has seen high-profile failures, but even when a recent launch resulted in a rocket exploding shortly after takeover, the message was one centered on a “learning experience.” Today, the Falcon 9 rocket is the market leader because, even when faced with extreme challenges, the leadership sets the tone to be focused on positive action.
Even if there are failures along the way, good leaders should not lose sight of long-term goals. During economic slowdowns, or when something appears to go wrong, it is easy to retreat. It may be necessary to drive cost efficiencies, but leaders must also invest in their people and empower them to take risks. Strong leaders who combine this emphasis on culture, people and strategy will be best placed to deliver a more resilient, sustainable organization.
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