Five Ways CEOs Can Upgrade Organizational Resilience

CEOs are, largely, more pessimistic about the global economy than they have been at any point during the last decade, due to a combination of influences such as high inflation, rising interest rates and market volatility, according to a January 2023 PwC report. This, of course, was even before recent bank failures increased economic jitters. At the same time, this report shows that nearly 40% of CEOs believe their own organization will not be economically viable in 10 years if they don’t transform. While concerns about the economic outlook may prompt some CEOs to tap the brakes on major initiatives, continuing to put emphasis on transformation will, according to the same PwC report, lead to more success in the long-term.  

Among the lessons from the pandemic’s fallout and the ongoing financial turmoil is that organizational resilience is the key to weathering economic storms. As Gartner defines it, organizational resilience is the ability of a business “to resist, absorb, recover and adapt to business disruption in an ever-changing and increasingly complex environment to deliver its objectives, rebound and prosper.”

The stakes are incredibly high because companies which embrace change and adapt to challenges are proven to perform better on a number of key metrics, including better workplace digitalization (80%), improved wellbeing (74%), stronger team collaboration (73%) and an enhanced customer/end-user experience (72%). 

Organizational resilience essentially comes down to making investments in three pillars: people, processes and technology, so that business leaders can support a stronger, more adaptable organization in the following ways:

1. Focus on company culture: Phenomena like the Great Resignation and “quiet quitting” demonstrated that there is more to employee retention than just monetary factors. With a new set of economic headwinds having the potential to limit a company’s ability to increase compensation and pay bonuses for current employees or offer above-market salaries to attract new talent, more needs to be done to enhance the people experience. Resilience requires an engaged, skilled workforce who can deliver on the brand promise for customers and maintain positive relationships with vendors. CEOs and CHROs need to get creative with incentives to find and retain the talent they need, such as offering unique career development opportunities and flexible schedules.
2. Plan for post-downturn success: Economic doldrums can actually give organizations the breathing space needed to create positive change. If there’s a slowdown, it’s important for teams to take the time to assess process efficiency, identify needed investments and create plans to emerge stronger when economic activity picks up again. In good times, it’s easy to lose focus on internal operations since managing relationships with customers, partners, vendors and other external stakeholders to drive revenue and growth are typically top priorities. It’s vital to attend to daily operations too and, when the heat is off, there’s more time to give internal stakeholders, policies and technology the attention they deserve. 
3. Take positive action: Economic uncertainty is unsettling, and it can be tempting for companies to put plans on hold to avoid risk. But playing it safe and doing nothing due to fear is a choice that can end up exposing an organization to more risk than taking action to move forward. While it’s essential to reinforce the financial position of the business by ensuring there are adequate reserves in place, it’s also important to consider continued investments in people, processes and technologies that can help the organization thrive in the months and years to come. 
4. Leverage technology and automation: Related to the point above, an investment in technology and automation can make organizations more resilient by minimizing the time people have to spend on repetitive tasks. This also gives them the space to focus on strategic work, including innovation and relationship management. Flexibility is a core component of resilience, but so is dependability.  Automating as many processes as possible to take care of routine tasks means colleagues will have more time to devote to completing meaningful projects and driving business transformation. 
5. Improve personalization and communication: A downturn can also provide space to assess opportunities for personalization in areas like pricing and to examine the accuracy and success of customer communication. When companies are operating at maximum capacity, it can be difficult to identify changes in customer expectations or subtle variations in the ideal customer profile. A slowdown is the perfect time to do this research. It’s also the ideal opportunity to communicate the value the company provides in a way that resonates with customers. 

As noted by BCG, an organization’s ability to withstand shocks in tough economic times accounts for nearly 30% of long-term outperformance, so the implications are far reaching. Unit4’s recent Business Future Index research demonstrates the nearer term effects, showing that more than half of companies who have focused on driving growth since the pandemic outperformed 2021 targets, compared to just 28% of peers who didn’t. 

The message is clear for all CEOs who are navigating their organizations through uncertain times: Hunkering down and maintaining the status quo is riskier than acting. Improving company culture, planning for growth, making smart investments and using downtime effectively can help to improve organizational resilience so the organization can emerge stronger on the other side.

Written by Mike Ettling.
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