Resilience is a Crucial Focus Now
Randy Wolken, President & CEO

Now more than ever, resilience is crucial for all organizations, especially given the uncertainty in which most companies, teams, and individuals operate. However, a recent study from McKinsey indicated that a majority of leaders and organizations aren’t spending enough time building resilience. 84 percent of leaders reported feeling underprepared for future disruptions, and 60 percent of board members feel their companies aren’t equipped for the next major event.

This study’s conversations with global CEOs revealed that most remain focused on addressing acute and unexpected situations affecting their businesses, rather than building resilience. These situations include major crises such as changes in global trade policy, conflicts in Europe and the Middle East, and other ideological and geopolitical disruptions that have downstream financial and operational consequences, but they also include smaller disruptions, such as stock price fluctuations or product flaws.

While time is always a constraint for leaders, they must find space to be intentional about investing in and building resilience. Resilience is best defined as “the ability to prepare for, respond to, and take advantage of disruption.” CEOs and leadership teams need to spend more time responding to current disruptions. McKinsey research shows that nearly half of a company’s performance is tied to the leadership of its CEO. This is because only the CEO has the holistic perspective to assess the organization’s resilience level, act to increase it, and integrate resilience into the company’s DNA.

There are at least four core types of resilience: financial, operational, organizational, and external. To effectively strengthen their resilience, CEOs and their teams must understand all of them. According to McKinsey research, by having a greater understanding of these different dimensions of resilience, leadership teams can take five actions toward improving their institutions and making them less susceptible to future shocks. These suggested actions are based on over a decade of engagement and conversation with CEOs from across the globe:

1. Embed resilience in the company’s vision: Create a vital link between the organization’s strategy and its levels of resilience.
2. Build full-body resilience: Pay attention to all the resilience dimensions in an organization, then assess how and where they compensate for and reinforce one another.
3. Force decisions with senior leaders when resilience is needed: In the most critical moments, intervene directly to emphasize the importance of resilience in daily decisions and strategic initiatives.
4. Create a determined team and invest in individual resilience: Hire and develop people who show adaptable traits and behaviors, are open to challenges, and commit to growing in these characteristics and practices. As a leader, serve as their role model for these behaviors.
5. Create deeper relationships with a diverse set of external stakeholders: Anticipate future disruption and build strong partnerships that allow the organization to rely on external stakeholders for support when change occurs. These alliances can be particularly critical when companies explore bold strategy shifts in response to internal or external events.

MACNY can assist you as you build greater resiliency within your organizations. We remain focused on our own resilience as your member association. As always, please share your successes and needs with me at [email protected]. We can work toward building tomorrow, together while weathering an increasingly uncertain and challenging future.