Developing for resilience: Four key practices
What are the practices and processes that allow leaders and organisations to develop businesses, products, services and an economy that will respect the living world and will be resilient into the future?
What do we mean by resilience you may ask?
A socio-ecological definition of resilience is the capacity of a system to absorb disturbance and re-organize while undergoing change in order to still retain essentially the same function. Many organisations are working harder and harder to innovate and adapt to large market changes, but with a sense of becoming busier and less resilient. Resource scarcity, climate change, urbanisation, financial crisis and changing demographics make it difficult for organisations to maintain the status quo; however, they also provide opportunities for developing strategic advantage. Emerging trends like digitisation, collaborative and circular economies are enabling system change, where previously there was not enough momentum.
On our Masters programme in Sustainability and Responsibility, we look at how organisations are responding to these changes in the external landscape. We explore many of the new successful business models such as closed loop design, product as a service, inclusive sourcing and alternative marketplaces, and look at the conditions that enable organisations to re-organise and adapt more successfully. We also explore how discourses or mental models help keep incumbents locked into traditional ways of operating. These mental models may have previously been useful, but they are now hindering attempts to develop for resilience. As Einstein said: "We cannot solve our problems with the same level of thinking that created them."
For this article, I will focus attention on four key practices that are critical for organisations developing for resilience.
1) Start by developing more resilient employees and the capability to host conversations for change
It is not just the number of ‘fail safe’ experiments that matters but the quality of the experiments, who you partner with and how organisations respond to emergent opportunities they had not previously imagined. Closer study of effective innovation in complex environments shows it occurs well when teams are a) actively seeking different views and capabilities, both inside and outside their organisation, b) focusing experiments in small local contexts rather than rushing too quickly into scale, and c) getting really good at hosting conversations for change. This requires leaders to be more present and supported by a solid practice of self-care and collaborative learning. It also requires leaders to foster a sense of meaning or purpose in their work, so that employees have a sense of belonging to a community that is genuinely clear about how they create value for society.
2) Make ‘developing for resilience’ part of your strategic purpose and key competitive advantage
It is strange that the communicated ‘strategic intent’ of many organisations are generic, such as being ‘material’ or ‘relevant’ or ‘world class’ which does not describe how the organisation creates value for stakeholders. What would it be like if most organisations were genuinely focused on increasing the social and environmental resilience of their communities?
What is your compass in these complex and emergent markets? A resilient strategic purpose is also increasingly necessary to attract talented employees, quality business partners and customers.
As Michael Porter said late last year when addressing business leaders in New York: "The old models of corporate strategy and capitalism are dead. We are witnessing a paradigm shift from hurting to helping."
We see in the news that the large corporates such as Unilever, Puma, Interface, Triodos, Patagonia, Ikea and Marks & Spencer are moving their sustainability agenda from being a ‘risk management or cost reduction’ exercise to being an integrated part of their ‘strategic purpose and competitive advantage’. However, many new organisations are leading the way in not taking the traditional ‘make and sell’ approach to development, and practising a ‘sense, respond and co-create’ approach. We are also seeing increasing numbers of new entrants from developing countries where this approach is shaped by the context of considerable scarcity. Incumbents who try to seek strategic advantage from being greener without investing in human resilience tend to fall back to short-term risk management when they run into difficult times. Human and environmental resilience are interdependent.
3) Approach internal change and external innovation from a socio-technological system perspective
Seeing innovation not just as an in-house technology or product development field but also as system-wide socio-technological field is at the heart of developing for resilience. As Bob Dunham (founder of the Institute for Generative Leadership) says: ‘Innovation is adoption of new practice in a community‘. On the Ashridge programme we use models such as Geel’s ‘multi-level perspective’ to understand how socio-technological systems (transport, energy, banking etc.) get locked into certain ways of operating. If you were designing services today, you would replace parts of these ‘locked-in systems’ with more resilient solutions. Caught between defensive and developmental strategies incumbents are increasingly under threat from new entrants and we can see a big rise in corporate venturing as companies try to respond.
A key factor in enabling system change is understanding how the different types of stories that we tell each other in our communities, challenge or maintain our status quo: in other words, ‘words make worlds’ as the saying goes. We use a model from Dryzek to explore how these stories can help us envision greater resilience. Taking stands that unite stakeholders across different paradigms, rather than entrenching ourselves in positions and oppositions is fundamental. As leaders in organisations increasingly becoming the stewards of social movements, models such as those of Geels and Dryzek, enable us to develop a new common language and talk more effectively about new innovation pathways and next steps in these transformational journeys. Designing and hosting conversations for change across interdependent systems is critical in developing for resilience.
4) Trusting the customer and bringing ‘sustainability to life’
A recent Boston Consulting report found the US responsible consumption segment to be over 15% of the market and growing at 9% a year. Keith Weed from Unilever recently said that Unilever is seeing this phenomenon in developing markets too. Leading companies are harnessing the power of social networks and the ‘pull’ media; using crowd sourcing, co-creation, open source collaboration platforms and transparent branding to differentiate themselves. More importantly companies are realising that they need to trust their customers in order to be trusted. In the end trust is gained by focusing on mainstreaming sustainability through their business and suppliers, while being open about the progress, successes and failures. In a world of instant communications, open data and total transparency, this is the closest one can get to convincing consumers that sustainable consumption is not one big fib. Fortunately, in this increasingly connected world, we have the opportunity to bring sustainability to life and in a more resilient way.
Conclusion – practise, practise, practise
This is not easy. Balancing revenues and costs in the short and long term are constant challenges and often there are no easy answers. Leaders need to support each other develop resilience for a long and demanding journey. Above all we need to practise hosting these conversations for change. How do we practise building connection between ourselves and also with nature? How do we practise seeing diversity as the ‘difference that makes the difference’? How do we practise releasing the energy that flows between us? How do we practise supporting a social movement and let it change us? How do we help each other practice? These questions require a rigorous look at our own practice and how we align our intent and actions. These questions are at the heart of our Masters in Sustainability and Responsibility and an increasing number of other communities that are developing for resilience.
Stefan Cousquer is a member of faculty for the Masters in Sustainability and Responsibility programme at Ashridge Business School. Working at board and senior leadership level, Cousquer supports a number of clients in the areas of behavioural and cultural change and strategic engagement projects.
edie has partnered with Ashridge Business School for this series of articles focused on growing international debate and practice around sustainability. The next part is titled 'Intervening in systems', exploring how we can go beyond simple mechanical models of change to be influential in a complex systems world.
Read all parts of the series so far here.
*On Friday, 10 July, Ashridge Business School is hoilding an online event for potential students to find out more about the MSc in Sustainability & Responsibility course; the faculty and the programme team. Click here to register.