Levers of Organizational Resilience
- PDF / 405,021 Bytes
- 12 Pages / 595.276 x 790.866 pts Page_size
- 100 Downloads / 178 Views
Levers of Organizational Resilience While organizational resilience seems to be in vogue, it is often unclear what com panies could actually do to become more resilient. I therefore set out a framework encompassing four levers that organizations can mobilize: strategic risk management, adaptive management, resource availability, and, lastly, robust and flexible operations. Utz Schäffer
8
Controlling & Management Review 6-7 | 2020
Schwerpunkt | Framework How can companies deal with low-probability, high-impact events? More importantly, what can they do to prepare for external shocks? For a long time neither of these questions were – to put it mildly – at the forefront of scholarly debate or boardroom discussion. However, awareness has grown sharply in the wake of shocks such as 9/11, the 2008/2009 Financial Crisis and – in particular – the current COVID-19 pandemic. Company leaders increasingly understand that this type of event may not be that rare after all and that they are unlikely to correctly anticipate the next disruptive shock. Consequently, companies need to invest in organizational resilience. What many had previously considered a buzzword suddenly seems to matter. At the same time, I often find the discussion and the underlying understanding of what organizational resilience really is to be rather vague. In the popular press, resilience tends to be reduced to the notion of financial slack, redundant supply chains, and maybe one or two other aspects of the overarching concept. However, such an approach seems to be too restrictive and once a crisis passes companies will likely struggle to justify seemingly inefficient practices like redundant suppliers and IT systems. What companies need is an indepth understanding of organizational resilience and a clear roadmap illustrating what managers and controllers can do to prepare their organization for the next crisis. With this in mind, I define resilience as the ability to respond and adapt to new challenges and sudden disruptions (Lee/Vargo/Seville 2013; Distel 2017; Kahn et al. 2018) and set out a framework encompassing four levers that companies can mobilize to enhance organizational resilience: strategic risk management, adaptive management, resource availability, and, lastly, robust and flexible operations. I explain what it takes to activate each of these levers before discussing why enhancing a company’s resilience is not as simple as it may initially appear and what CFOs and controllers need to do.
Utz Schäffer is a Director of the Institute of Management Accounting and Control (IMC) of WHU – Otto Beisheim School of Management and Co-Editor of the Controlling & Management Review E-Mail: [email protected]
Four levers of organizational resilience What do you need to do to prepare for an external shock? Let us first think about this from a more personal, common sense perspective. Having access to sufficient resources, be it money in your bank account, some gold under your pillow, or sufficient food and beverages in your storage room, will surel
Data Loading...
