Marc L. Goldberg
Question: People constantly say, “You have to be resilient in order to run a sustainable small business.” What does that mean?
Answer: Resilience is the ability for a business to absorb stress and uncertainty, recover critical functionality and riseabove the chaos, and adapt its systems and processes to new circumstances. With a more dynamic and unpredictable business environment, resilience as a business value is almost mandatory. What was considered foundational in the past can no longer be counted on in the present and near future.
Organizations that adopt resiliency as a value have common characteristics:
Redundancy: Unexpected situations can be buffered by having redundant functions. Instead of having one main manufacturing or assembly location, having two or more avoids the shock of unexpected occurrences.
Diversity: Having an organization that employs people from different backgrounds and cognitive profiles fosters multiple ways of thinking, reacting and acting in rapidly changing environments.
Modularity: Create an organization with modularity where individual units can fail to perform without taking the entire organization down. This may not be the most efficient way of organizing but modularity creates options when environments become uncertain. With small organizational units and well-defined interfaces, the larger organization can be refocused more quickly and easily than traditionally organized businesses.
Adaptability: Trial and error philosophies allow organizations to evolve via experimentation. Having the ability to rapidly change, yet absorbing the consequences of quick directional modification makes an organization resilient. Rigidity won’t last long if an organization is expected to be resilient.
Prudence: When organizations think that if something can plausibly happen it will, then it operates applying precautionary principles in deciding on actions. What this means is that contingency plans are central to the strategic thinking and acting of resilient organizations. When potential risks can be assessed and planned for, then organizations have the ability to pivot successfully when situations like the COVID-19 pandemic hit.
Migration strategies: Organizations need to have structural options for shifting its business portfolio across products, services, channels, geographies or business models to maximize opportunities and minimize the impact of unforeseen environmental catastrophes. It might mean redeploying or spreading resources across different functions to survive. It takes mental agility and flexibility to re-imagine what a business might become in order to sustain it.
We have seen restaurants in our communities that were 95% eat-in before the pandemic create imaginative carry-out business models, outside eating environments to meet different levels of pandemic caution — from patio and porch dining to “igloo” protected eating locations. We have seen call-ahead and online ordering become the norm until regulations allowed dining normalcy.
Environmental Shaping: Resilient organizations can shape the business environment in which they work by reimagining their enterprise. Buy online with drop-shipping became a norm over the past 15 months, but buy online, pick-up in-store is becoming the norm. Retail establishments can reduce their inventory by accessing larger stocks from central locations, while buyers can access their needs within 24 hours — reducing the instant gratification model under which we have been operating in the near past.
Collaboration: There is no better way to increase an organization’s ability to become more resilient than to collaborate with other players. By sharing resources or platforms an enterprise can increase productivity, efficiency and flexibility.
Abiola and Udofia report that resilience is associated with inner strength, competence, optimism, flexibility and the ability to stay “cool” in the face of adversity. It is all about reducing the impact of stressful life events and coping during recovery. (personal or business). It is not innate, but a learned behavior. One way to develop resilience is to draw upon lessons learned from past similar situations. McDonald, et al., developed four Ss of creating resilience: social supports, strategies, sagacity and solution-seeking behaviors.
Tips from SCORE:Knowing your business’s value
What supportive individuals, organizations, associations or social institutions can help you remain standing vs. falling down in times of adversity? What strategies did you employ to help you cope? Did you meditate, keep a journal, listen to motivational/instructional tapes or even get a massage to relieve the stress? How did you employ sagacity? Did you draw upon lessons from prior situations where you recovered from stressful situations? And, what solution-seeking behaviors did you employ to actively deal with the environmental upset?
Resiliency decreases unanticipated stress and creates a competitive advantage. When an organization can recognize unanticipated threats and more quickly react to them, they are able to bounce back and become more sustainable.
Contributed by Marc L. Goldberg, Certified Mentor SCORE Cape Cod & the Islands. Sources: Abiola, T & Udofia, O.(2011) Psychometric assessment of Wignald & Young’s resilience scale, McDonald, G, Jackson,D., Vickery H.M. (2012) Nurse Education Today, 32, 378-384.
For Free and confidential mentoring contact SCORE Cape Cod & the Islands www.capecod.score.org, email@example.com. Tips from SCORE Vol II eBook is available for free download – http://www.amazon.com/db/B08QPR7G35.