Can We Make Our Organizations Resilient? And Make Society Resilient As A Result?
One of the biggest surprises of the pandemic is how “brittle” our society has become. A single tiny virus has managed to upset our lives, our economies, and our society. Not only are we worried about our personal health, but our financial system is threatened and we are arguing about state vs. federal, voting practices, and the unequal burden the virus places on the poor.
One of The Big Reset issues we now understand is that resilience, the ability to “adapt” and bounce back, is perhaps one of the most important things in our organizations.
It’s funny. If you look back only a few months, we weren’t even discussing this issue. Yes, we worried about global warming and a potential recession, but nobody was designing their companies, organizations, or societies for resilience. Well, now we are.
I’ve been sitting on Zoom calls non-stop for four weeks talking with HR and business leaders from around the world, hearing story after story about how the company “reacted” and implemented various forms of crisis management to respond. And all are inspiring and educational.
But what occurred to me the most, is that we have to “design” our organizations for resilience. And so I’m going to spend quite a bit of time in the coming weeks talking about this topic, leading to some important research on HR. And along the way, we’re going to learn about how we can make society more resilient as well.
Let me give you some things to consider.
First, Black Swan events are common and may grow in frequency.
We used to think of Black Swan events as things that happen once or twice a lifetime. Well as I look back, that isn’t really true.
I experienced the 1987 market crash, the 1989 Loma Prieta earthquake (in my neighborhood), the 1991 Oakland Hills fire (evacuated), the 2000 dot-bomb recession (I was laid off), 9/11, the war in Iraq, Katrina, 2008 meltdown, Brexit, and many more. And if you think about all the company-specific crises that happen, this is far more frequent than you think.
I’d suggest that in business they happen quite often, and likely to become more frequent in the future. (Cyber events, global climate events, and political instability are all looming).
When Boeing discovered its 737 problem, that was a Black Swan event. When Wells Fargo discovered its sales cheating problem, that was a Black Swan Event. Every time a company suffers a cybersecurity attack, a sexual harassment claim at the C-level, or a massive fire or explosion (PG&E for example), it’s a Black Swan event.
How do we design for this? Here are four things to consider.
1/ Resilience demands “distributed control with centralized coordination,” not “centralized control with distributed execution.”
After many conversations with HR leaders this last month, I realize we have to organize for this. And it brings me to the military.
Many Army and Air Force’s recent studies also agree that surprising, non-linear attacks will become more frequent and more violent. So they’ve studied response in detail.
Without getting into all the details, one of the biggest lessons (Stanley McChrystal describes this well), what they promote is a model of highly trained, experienced, distributed teams – enabled and empowered by coordination and data. We need to consider this in HR.
Historically we designed HR to be a “low cost, high value service function:” one that understands employee needs, responds quickly, and delivers services at scale. This is not the optimum model in a crisis. We need to distribute authority fast, make sure responsible owners have strong capabilities and experience, and coordinate the response. A very different design.
Let me give you an example. This last week I talked with a global retailer who has stores all over Italy. The headquarters organization heard from their HR leaders in Italy that nobody was coming to the stores several months ago and that people were being sent home. They sent a “red alert” to headquarters that a problem was coming. Similar signals came in from China.
If the company waited for all this signal to make sense, they may have done nothing. But this is a smart company: they empowered the local teams to shut down operations and quickly shared information (what is often called “shared awareness”) so others could act.
This entire idea: the strategy for “distributed control with centralized coordination” applies to every HR, leadership, and business issue you have. In many cases the “frame of control” is different, but as the military has learned, we only win wars then the people on the front line are well trained, experienced, coordinated, and supported with ammunition, backup, and data.
Think about this in the context of your HR transformation. Are your business partners skilled, empowered, and coordinated?
Consider the results of our COVID-19 Pulse last week. Most of the problems have to do with coordination and access to high quality data.
As far as society goes, we’re watching this play out in real time. The US Federal Government is intended to “coordinate and support” the States, not fight with them and pick favorites (the situation we appear to be in).
2/ Resilience demands high quality, real-time data.
A second lesson we’re learning is that truth, detail, and real-time data really matter. We can’t respond to a crisis like a fire, accident, or virus if we don’t know where it is, how fast it’s spreading, and what to believe as accurate.
In the public sphere we have a federal government that seems to obfuscate the truth about the virus. So we feel uncertain and unable to respond.
In a company you can’t afford to operate this way. In order for the “coordinated attack and response” to take place, we need accurate, real-time data.
I talked with a set of People Analytics experts a week ago and they told me they had immediately wired up virus infection data, travel data, employee location data, and all their other HR data into real-time dashboards. This gives them an immense sense of shared awareness, as the military puts it.
For example, these companies immediately know what employees are located where the virus is growing, who will be impacted when it fades, and where travel is blocked or prohibited.
On a personal level, they know who is working from home, who is living alone, and which of their employees have high-risk medical situations. So they can tailor programs to each employee as needed.
They are pulse-surveying employees and managers daily, producing hot-spot dashboards and dozens of reports on what the company can do to help people stay safe and work from home.
This type of infrastructure is critical to resilience. You don’t know what you can’t see. The journey to building great people analytics infrastructure has been long – but now we’ve arrived. If you haven’t invested in this infrastructure yet, please do it now.
The US Army, by the way, has studied resilience for years. Right now they’re focused heavily on providing accurate information, guidance, and rules to all Army personnel and contractors, so COVID-19 incidents are communicated well and all contractors engage in the process.
In the political sphere, this brings up a lot of complex problems. Do left-wing think-tanks and right-wing think-tanks interpret unemployment data differently? You bet they do. It’s a noisy, crowded, complex problem, but without a Federal “office of truth” it’s hard to respond and recover.
3/ Resilience requires leadership who care.
The third thing you find in resilient organizations is leadership who people want to follow. As Colin Powell put it, you know you’re a good leader when people want to follow you.
During times of crisis, people get worried. We just finished our weekly pulse on the crisis and the #1 issue on employees’ minds today is their financial security. Health is right behind, but for the most part they’re worried about their families. If your CEO and top leadership don’t empathize and relate to this, you won’t adapt well. (Take our pulse now.)
(I call this “CEO as Chief Empathy Officer.”)
A good example here are the California fires which PG&E was blamed for. I have no idea whether PG&E actually caused the fires we endured last year, but the #1 issue on people’s minds was “Does PG&E Care?” I believe PG&E is a highly responsible company that may have lost its way and stopped maintaining its infrastructure. Today the company is doing the right thing, but it paid a big price for appearing not to care.
Just in the last few weeks an Amazon employee protested virus-threatening work conditions in a distribution center. It took a while for the company to respond, but now they’re acting vigorously to create safe working conditions. Again this is a story of empathy.
Boeing just suffered a CEO replacement for much of the same reason. I’m sure Dennis Muilenburg was a fantastic leader, but his inabilty to “empathize” with the problem held him back.
If you want to build resilience, you have to build on a basis of trust. And this means leaders who listen, care, and respond.
Companies like Unilever, Salesforce, Wegman’s, Novartis, Nextdoor, IBM, and many others understand this. These companies’ entire business model is built around empathy. So their CEOs “walk the walk.”
I would suggest that whatever your business, if you aren’t big on “empathy” you’re probably falling behind. Empathy for your customers, communities, employees, and their families goes a long way. Yes it’s a more “emotional” way to think about business leadership (Jamil Zaki discusses this in HBR in some detail), but in a crisis it’s a top priority.
One more thought here. You cant “invent empathy” in a heartbeat. It builds over time.
As Warren Buffet famously stated, only when the tide goes out do you see who’s been swimming naked. The same applies here. Companies who “care” will respond faster than those who don’t.
By the way, the US Army has studied and developed quite an extensive program to promote resilience – and a lot of it is based on listening. Read Marty Seligman’s article if you want to learn more.
4/ Resilience thrives in a community, not just an organization.
The final lesson in resilience is something else we learn from the military. The most resilient, adaptive, and high performing companies are made up of people who know each other, like each other, and support each other.
In the military there is “mission,” the concept that “nobody will be left behind,” and a sense that “your team-mate is your responsibility.” The US Army trains every recruit to “take care of your Battle Buddy.” How many of us have a Battle Buddy at work?
Unfortunately, decades of management philosophy ignored this need. Remember the “forced rankings” and “up or out” and “peter principle” models of management? These ideas pitted people against each other, creating a sense of competition at work. Now we need a sense of “oneness.”
In this world of resilience and crisis adaptability, we need to know each other, speak up and discuss problems, and have a “family-like” sense of belonging. Yes, I know companies aren’t families (we do lay people off), but when there is a sense of collective culture, the company adapts quickly.
Several years ago I met with the executive team from Ikea, and we discussed the idea of corporate citizenship. They told me that at Ikea all decisions are made collectively – and that if a store or manager wants to try something new, it goes to a committee and the committee gets feedback from all the stores in the network. I thought “that seems pretty awkward and slow.”
Their reaction was “yes it seems slow, but what it does is bring us together – when we make a decision we act and execute fast.” What they were essentially telling me is that “shared culture” and “community responsibility” is more important than raw speed. And that means people have to know each other and believe in the mission.
When I visit companies (and I meet hundreds of companies each year), I always observe how people behave. Are people nice to each other? Are they friendly? Do they talk or wait for the boss to talk first? Are they respectful of each other?
Well sure enough, in all the highest performing companies I meet I always sense a feeling of “we know each other” and “we all know how to work together.” This social bond, set of relationships, and sense of belonging is vital. This is not something you’re going to build in a week, but if you’ve done it over time, it pays off now.
Resilience Is Built Into Individuals
Let me finish with one more point, and this is something I”ll talk much more about in the coming months.
We as individuals are extremely resilient. It’s our organizations that get in the way.
Here’s my belief. When I walk down the street and I see homeless people or people who are disabled, and when I talk with friends who have been laid off or have problems at home — I always hear stories of heroic courage, grit, and determination. People who suffer accidents or get sick – they survive, learn to adapt, and grow. It’s built into our DNA.
But when you put us into groups, throw us into a hierarchy, and give us a bunch of rules and structures to follow, we often lose this adaptability.
Our goal in building resilience (in our companies and in our society) is to liberate this sense of resilience in each one of us. Give people enough money, healthcare, safety, and security so we can adapt and grow.
In the case of your company, this means creating an “employee experience” that fulfills all five levels of Maslow’s Hierarchy (from health and safety to financial security to career to fulfillment).
In the case of society it means “people first, economics second” – implementing policies that focus on individuals, not just companies and bureaucracies.
I believe that the pandemic will be rough for all of us. But once we create a sense of safety, trust in information, and feel empathy from our leaders, the economy will come roaring back. This is what we need to do in our companies, and it’s a new “muscle” we are all learning to strengthen.
I’ll be doing a lot more on this topic in the coming months, I look forward to your feedback.