Resilience and Operating in Complex Contexts – (Part 1) Strategy and Resilience

In today’s world, the business environment is evolving and organisations need to develop resilience to survive and succeed, writes Pia Horttanainen Croxford & Matthew Croxford, Myelin LLC.

The concept of resilience refers to the ability of an organisation to adapt to changes and recover from setbacks. The word resilience is used in various contexts with different implications.

For those of us working in some of the most challenging operational environments in the world, resilience has a specific and significant meaning and it holds very operational and even individual-level implications.

It is not just a decorative word on top of a company strategy or a ribbon in the organisation’s marketing materials. Rather, it is a crucial aspect that impacts all levels of an organisation, its activities and relations with stakeholders, placing resilience at the core of business.

Resilience is like a ship which requires a command bridge (strategy) to keep the horizon and direction, the engine room (operations) to make sure the ship is advancing in its course and skilled people (individual level) to make sure that the ship is built properly let alone leaving the harbour.

Therefore, sailing troubled waters with a fully functional command bridge, engine room and skilled individuals makes the journey more pleasant and predictable.

In partnership with ISJ, we are presenting a trilogy of three articles that will discuss resilience at different levels of an organisation and their interaction specifically when operating in volatile and complex contexts.

We are starting from the strategic level first and then moving closer to the operational surface.

We will end our journey at the individual level, where the true test of resilience is conducted.

This trilogy will explore the layers of resilience, present the unique aspects related to resilience in complex and volatile contexts and connect them together creating a snapshot of matters relevant to consider.

Specific features of resilience in volatile contexts

Building and maintaining resilience in a stable environment is one thing, but it becomes an entirely different challenge in volatile and complex contexts.

Businesses face unique challenges in fragile environments like those found, for example, in parts of Eastern Africa. The fragile environments that are characterised by economic, political and security instabilities, make them susceptible to internal or external shocks.

Moreover, weak state institutions and missing structures such as a comprehensive legislative framework make predictability, consistency and stability even harder to achieve.

Companies need to lean toward taking proactive measures to build resilience, not only to adapt to the fluctuation in dire circumstances but also to meet the increasing requirements for compliance and due diligence.

However, the pitfall and challenge is that, often, the tools, frameworks and processes used in strategy and resilience work are designed for generic purposes and often reflect a standard and stable environment.

Business operations in difficult contexts require a targeted and tailored approach with specific planning, management and implementation needs. So, what should be done differently and what needs to be taken into consideration?

Strategy work and resilience in volatile contexts

When preparing to venture or already operating in volatile contexts, the unpredictable and rapid changes in the context set a high bar for the strategy work.

Certain aspects seem to hold a specific importance.

Companies that are able to adjust, tailor strategy work, dynamically use the most suitable and combine a variety of different strategic tools, get the most out of the exercise – optimisation and innovation.

Resilience cannot be achieved only through risk management exercises or business continuity planning.

It requires a comprehensive approach with a solid understanding of the organisation’s entire operational landscape. The specific needs apply also to the management and implementation of the strategy including decision making.

Strategy work has inspired dozens of different models and tools to be created for different phases such as planning, management, tracking etc.

Many of these are useful for unpredictable contexts too, such as scenario planning and PESTEL analyses.

However, due to the fascinatingly unique operational environments, tailoring and combining different models and tools is necessary.

Falling into a trap of applying one tool or using the same approaches, models and tools for standard and complex environments can set the strategy so far from reality that it serves hardly anyone’s interest.

A strategy that ends up being unfitting for its core purpose as an active leadership tool and disconnected from reality, generates endless needs for updates or ends up simply collecting dust in the drawer.

One of the most significant risks is the tendency to oversimplify the different phases and content of the strategy work.

This risk is particularly pronounced in unpredictable environments where factors such as political, security and economic turbulence can interact in complex and unexpected ways.

For instance, poorly conducted analytical work can lead to incomplete or inadequate resilience and adaptability plans. Neglecting factors such as demographics, historical events and megatrends may result in overlooking the impact these factors have on contemporary dynamics.

The impact of the poor background work and lack of contextualisation has been seen in some market ventures which have gone bad simply by not clearly understanding the regulatory compliance, trying to fit the standard approach to a completely far more complex surrounding or missing the signs of political instability and changes in government policies.

Of course, the main hazard lies if the strategy work is neglected completely considering the issues in the fast pace moving realm only being operational.

This can be the case where the business operates in areas where the focus is only on very targeted and narrow service functions. This situation ends up easily into a reactive and chaotic business mode.

This leaves a company internally in turmoil and drives the company potentially out of its main course when the horizon is lost without a long term view and the operations are only responding to the situations stemming from contextual fluctuation.

In the long run, this type of reactivity causes dissatisfaction in employees, thus contributing to increased turnover of personnel. In client relations, this hardly is left unnoticed.

Managing and implementing a strategy requires specific attention and flexibility to adjust to changes in a timely manner. In addition to monitoring business-specific events and data, it is crucial to pay attention to a broader range of domains.

Changes in the political sphere may trigger sudden changes in the security sector, particularly in fragile contexts. Geopolitical shifts, such as new global alliances, may have implications at both regional and national levels, including security and economics.

Therefore, it is essential to pick up on early subtle signs of potentially upcoming changes to be able to dynamically respond and make informed decisions.

In volatile environments, an important aspect that is often tested is an organisation’s ability to make quick and accurate decisions.

The question is whether the company has a suitable organisational structure and decision making process in place that enable both rapid and informed decision making.

These factors are closely related to the company’s hierarchy, decision making methods and information flow, all of which have distinct requirements.

In summary, to achieve success in building resilience at a strategic level, it is important to skilfully select and apply a variety of strategic tools and mechanisms, along with advanced analytical capabilities.

It is possible to detect subtle signs of emerging changes, but it requires a deep understanding of contextual details, macro-data and megatrends.

Management and implementation of the strategy put a real stress test on a company’s ability to adapt its functions and hierarchy to meet the requirements of rapid decision making and timely and accurate information flow.

When resilience is taken seriously, the strategy work becomes ambitious and forward-leaning.

Additionally, well conducted resilience work positively contributes to sustainability, integrity and compliance with regulatory frameworks, having a positive impact on reputation.

Myelin LLC

Myelin LLC is a consulting company that specialises in providing tailored services to businesses and organisations that operate in complex and unpredictable environments. The company’s expertise is in security, politics, law, governance and human rights domains as well as their interconnections.

Myelin LLC offers strategic and operational consultation, analysis, forecasting, advisory and planning services extending also to crisis management and conflict resolution, negotiation and mediation consultancy.

To find out more information, visit: www.myelin.fi