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Disruption & The 4th Industrial Revolution

The complexity of today’s business world is increasing rapidly. This implies a more complex environment for today’s leaders as well. They face new business models, new competitors, faster business cycles & on top of that the biggest technological shift in human history.

On May 22nd 2018 Marks & Spencers announced that they would close over 100 stores in total by 2022. Alongside relocations, conversions, downsizes & the introduction of concessions. These stores will be larger, digitally enabled, better located & more inspirational for customers to shop. They will also be supported by a seamless online experience across all digital channels including mobile & social. Other retail brands are going through similar restructuring processes such as Tesco, John Lewis, Waitrose & House of Fraser.

Toys “R”Us Inc. operated across 1500+ stores in 37 countries with a revenue of over $11.5bn. The company was one of the first major retailers to adopt eCommerce in 1996. Despite the head start, Toys “R” Us soon got left behind by competitors Amazon & Walmart. In September 2017 Toys“R”Us Inc. filed for Chapter 11 Bankruptcy, the third-largest retail bankruptcy in U.S. history crumbling under a $5.5Bn debt burden. It was announced on March 14, 2018, that all Toys “R” Us stores in the United Kingdom would close. The next day, on March 15th 2018 the company announced that the US operations were going out of business & selling all 735 locations in the US.

Recent events teach us that disruption & even disaster occur far more frequently than previously anticipated. The key to not only surviving such events, but to prospering during such upheavals, we argue, is human resilience. While human resilience may be thought of as a personality trait, in the aggregate, groups & organisations can learn to develop a “culture of resilience” which manifests itself as a form of “psychological immunity” to, or the ability to rebound from, the untoward effects of adversity.

We would argue that a culture of organisational resilience is built largely upon leadership, what we refer to as “resilient leadership.” Consistent with the “Law of the Few” described in Malcom Gladwell’s book, The Tipping Point, we believe key leadership personnel, often frontline leadership, appear to have the ability to “tip” the organisation in the direction of resilience & to serve as a catalyst to increase group cohesion & dedication to the “mission.” They do this, we argue, by demonstrating four core attributes of optimism, decisiveness, integrity, & open communications while serving as conduits & gatekeepers of formal & informal information flows throughout the organisation & enjoying high source credibility (ethos).

All of these can be learned. Simply said, when a small number of high credibility individuals who serve as visible informational channels demonstrate, or “model” the behaviours associated with resilience, we believe they have the ability to change an entire culture of an organisation as others replicate the resilient characteristics that they have observed.

Using the insightful & well researched formulations of Albert Bandura, we employ the construct of “self-efficacy” as a framework to operationalise many of the aforementioned attributes of resilience. Self-efficacy may be thought of as the belief in one’s agency and the ability to be a catalyst for change. He argues that the perception of self-efficacy shapes key human behaviours:

  • The courses of action people choose to pursue
  • How much effort they put forth in given endeavours
  • How long they will persevere in the face of obstacles & failures
  • Their resilience to adversity
  • Whether their thought patterns are self-hindering or self-aiding
  • How much stress & depression they experience in coping with taxing environmental demands
  • The level of accomplishments they realise

All of the aforementioned behaviours we believe are not only essential in resisting (developing immunity to) or rebounding from adversity, they are the foundations of a resilient organisational culture & can be used to increase resilience throughout the organisation

Our evidence suggests that optimism & self-efficacy can be learned employing a simple yet powerful framework in the organisation:

First, understand that people prosper from success. Create an environment wherein they are successful, especially early in their career. Utilise a process of successive approximation wherein success is achieved in tasks of increasing difficulty & overall complexity.

Second, people learn while observing others. Assign new personnel to successful workgroups. Let them begin to experience “vicarious success.” Simply possessing membership in successful, or elite groups, may create a self-fulfilling prophecy. Elite colleges & occupational groups thrive upon this principle.

Thirdly, provide encouragement, support, & even mentoring. Research suggests that the single most powerful predictor of human resilience is interpersonal support.

Lastly, using the latest finding from the neurosciences, provide basic training in how to manage personal stress. In our training programmes, we refer to this as developing “psychological body armour”.

Resilient organisations invest in their client base. At a time when the travel industry was undergoing a dramatic decrease in demand, American Express Platinum Travel Services sent a gift to loyal customers as a way of saying “thank you.” Such frequent customers were given several hundred dollars worth of travel-related items including carry-on luggage, an iPod, earphones, & a digital video camera.

Resilient organisations are innovative in times of adversity. Innovation typifies Apple. At a time when the music player & phone industries were commoditising their products, Apple introduced radically simple & beautifully designed products that remade the company.

Resilient organisations invest in their leaders. In a time when government agencies are demanding more & more from their contractors, one government contractor gave 30 departmental managers two entire days off, at a location away from work, in order to attend a training programme that taught skills in resilient leadership as well as “psychological body armour” (the latest advances in how to manage personal stress).

Resilient organisations invest in all levels of their workforce.

A mindfulness programme offered by Google, called Search Inside Yourself (SIY), aimed to increase employees’ attention, focus, self-awareness, emotional intelligence & resilience. The intervention of both meditation awareness training (MAT) & SIY starts with an extensive needs assessment of the organisation, consisting of in-depth interviews & EQ (emotional intelligence quotient) assessments of individuals, to enable effective programme customisation. These mindfulness programmes typically comprise a two-day onsite workshop & follow-up exercises ranging from weekly virtual webinars, peer-led learning groups, one-on-one coaching to integrate mindfulness skills on the job & the nomination of internal champions.  SAP, the world’s leading software provider, started offering an SIY programme to its employees in 2012 and has continued to spread it throughout its branches in the “SAP Global Mindfulness Practice” programme. In a survey taken four weeks after the two-day workshop in 2017, 127 participants from eight countries reported significant improvements in stress & emotional drain due to work (14%); greater ability to focus & prioritise (22%), greater resilience & mental readiness to meet daily challenges (38%); & increased leadership ability to maintain poise in challenging situations (25%). One participant mentioned,”The content covers exactly what I have  been looking for to increase my own resilience & creativity.” Another feedback was,”SIY allowed me to gain additional clarity & calm which makes me better-performing in the work I do.”

To say we live in challenging times is an understatement, but crisis may also be understood as an opportunity. Those who cultivate a resilient organisational culture we argue will be better positioned to prosper when others falter.