Learn How to Easily Achieve Resilient Business Design

What exactly does it mean to be resilient? In physics, it is the ability of an elastic material that will take its original shape after being forcefully deformed. This principle was adapted to psychology and is the mental skill to meet setbacks and change with an inner strength and therefore recover quickly from difficult situations. You as a company leader can actively make an impact on how well your business is prepared for such crises.

Never let a good crisis go to waste.

Winston Churchill

Seize the Crisis as a Momentum for Change

Crises are not usually situations to appreciate but you can learn to deal with them effectively. Winston Churchill already understood about the opportunities that a crisis brings with. It operates in the extremes, casting a magnifying glass on the inefficient elements of all operations that need improvement. Hence, such a situation always offers the opportunity for self-awareness, to get to know one’s weaknesses just as well as one’s strengths. Turning the data gained from this into action and monitoring regularly is what resilient businesses do right.

It is crucial to conduct a precise assessment, analysis, and root cause analysis and then to create a proactive plan for recovery and optimization. The fact that many companies have understood this can also be seen when looking at the figures from a survey conducted last year regarding the lessons learned from the pandemic: At 59%, almost two-thirds of companies put the expansion of crisis response teams, task forces and scenario analyses for exceptional situations on their agenda as a high priority (source: Future Readiness Index 2020)

This increased focus on risk management aspects are essential and exactly the right step in this situation. However, it would be much more efficient and less risky if these scenarios and task forces were given sufficient attention in advance and a resilient corporate design was considered right from the start.

What Resilient Businesses Do Different

We’re going to outline what the main steps of becoming a resilient business entail. There is the question however, of how to combine the pursuit of efficiency with increased resilience? The magic word for this is flexibility and a creative approach in order to be able to adapt to every situation anew. To do this, of course, these situations and scenarios must be thoroughly examined beforehand, which then supports efficiency in the event of an actual crisis: The options for action that have been devised are clearly outlined and there is no need to make difficult decisions under high pressure. This sweet spot of flexibly planned options for action is where resilience and efficiency meet.

Four steps for a resilient business design

The following four-step method, created by Dr. Tobias Naujoks, shows you the different tasks that are to be completed by resilient businesses.

  • Understanding the dimensions of risk: evaluating expected change on a local, national and global scale → recognizing interdependencies
  • Developing scenarios for your industry: assessing key aspects of one’s own industry in risk scenarios and evaluate the results
  • Creation of medium-term resilience: developing a plan of action based on the gained insights
  • Changing perspectives: considering the opportunities as well as the risks → opening up markets, acting with an eye to the future (source: KPMG)

Another key point is the integration of digital transformation into your operating model and its future-oriented optimization. This means that there are areas of action, particularly in the areas of production, supply chain, marketing and IT. Digitalizing these helps your business to achieve flexibility, for example through cloud-based services, agile supply chains and web presences on suitable channels. In addition, the personnel area must not be ignored when it comes to digitalization – employees should have the option of working in a home office without creating security gaps or communication shortfalls. Cyber security and strong as well as trustworthy leadership are therefore also key topics. Read more about that specific subject in our article How to Master the Digital Transformation Successfully.

Food for thought: How can your company be resilient if the management does not transmit this inner strength? It is worthwhile for leaders to exemplify resilience. Essentially, this involves acting self-responsibly; taking ownership of your own character development, and gaining an awareness of your power over your personal attitude.

Establish an agile supply chain

An important part of making your business more resilient is supply chain optimization. Global trends have a major influence in this regard. These include demographic change, increased sustainability awareness, or the general shortage of resources. A mere risk assessment based on statistical calculations and empirical values is often not sufficient to absorb supply chain interruptions. For this reason, we present you the 5 factors for resilience in the supply chain, created by KPMG Director Dr. Sylvia Trage:

  1. Making organizational structures more agile: Agility through alternative plans and early warning systems, regular review of customer expectations
  2. Decentralizing the setup of supply chains: making individual locations more independent and more capable of innovation, creating (global) options for evasion
  3. Utilizing structural duplications: Standardize processes, create norms (in infrastructure, technology, production, etc.), bridging gaps by switching to other locations, minimize variants.
  4. Designing a New Work environment: outside of qualification & motivation, also pay attention to personal qualities of employees: Interdisciplinary, diverse, intercultural teams bring benefits of different perspectives, innovative solution strategies, using group efforts
  5. Stimulating continuous learning processes: Seize opportunities of constant change, steadily monitor and adapt scenarios, train employees, establish emergency processes for crises → avoiding negative impacts to the market

The 7 Factors of Inner Strength for Leadership in Times of Crisis

How can your company be resilient if the management does not transmit this inner strength? Especially now, but also with a view to the future, it is worthwhile for leaders to exemplify resilience.

Essentially, this involves acting self-responsibly; taking ownership of your own character development; and gaining an awareness of your power over your personal attitude. All of this helps you to master smaller and larger, short- and long-term crises – in brief, to react resiliently to failures, defeats and crises. This is not something that can be learned in the blink of an eye or in passing, but requires an in-depth, continuous engagement with the subject. After all, today, there is no such thing as the one job for life – every day we are asked to be aware of the new requirements that are imposed on us and to ask ourselves whether we have the necessary skills to meet them. This lifelong learning has become the norm, and it goes without saying that we need to look inward. The future-oriented, self-confident, but critically-thinking mindset is the key to success.

For that purpose, we have listed seven different factors, adapted from Micheline Rampe’s work The R-Factor (orig. Der R-Faktor), that help you to build and strengthen this mindset and thus resilience.

  1. Optimism: Difficulties exist now and will pass. It won’t stay this critical forever, and there are certainly things you can do to bring about positive change.
  2. Acceptance: It is what it is. Getting bogged down in the supposed hopelessness of a situation doesn’t help. It is better to accept it and try a change of perspective: There is always an upside to the downside.
  3. Focus on solutions: With acceptance comes openness to new ways of thinking, because there is a solution for everything. Sometimes you just have to look for it a little longer.
  4. Take initiative: We ought to discover courage and self-efficacy. Only when we take active steps, we can make a difference. Every freedom also costs the courage to grow a little beyond oneself.
  5. Take responsibility: In the case of crises caused by others as well as those of our own doing, it is not a matter of dwelling on casting blame for a long time, but of taking responsibility. After analyzing the error, we must move quickly in the direction of finding a solution.
  6. Community orientation: Solidarity makes us strong. Trust in your fellow human beings is an excellent source for sharing experience, strength and gaining new energy and ideas.
  7. Plan for the future: True to the motto After planning is before planning, we have to think with an eye to the future. Play out visions of upcoming difficult situations and develop strategies, because the next cold winter is sure to come.

It is becoming clear: Not only in your company should constant growth be a priority, but also in your personal development. The one cannot be separated from the other in the long run – professional coaching with an eye to optimization can be a catalyst for this process.

This is How You Succeed in the VUCA World

Welcome to the VUCA World! Things are turbulent and unsteady here. That sounds exhausting? It only is if you don’t know how to deal with it. In this article, we will take a closer look at what exactly it is all about and which strategies are helpful. Roughly speaking, it’s about the fast pace and unpredictability of the business world in all its areas. These circumstances impose completely new demands on managers and companies.

Why you should get to know the VUCA World

The acronym VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity and originated at the Army War College in 1987 in reference to leadership in volatile, uncertain, complex, and ambiguous situations, which was then adopted by the business world. The continuous changes, uncertainties and new challenges, which have become the norm in the VUCA World, mean that mistakes can have much more serious consequences than they did 15 years ago.

  • Volatility in this context means that companies and their markets are subject to constant change, which happens rapidly and can also take on large dimensions. It is a fast rise and fall of the economy, and constantly new trends that change direction more often.
  • Uncertainty is relatively easy to explain. No one can say with 100 percent certainty which opportunities and challenges the future will bring. Take, for example, the Corona crisis, which suddenly made everything uncertain overnight.
  • With increased Complexity arise new challenges for companies. Nowadays, there are many more different and interdependent factors that influence performance, so that the expert knowledge of a single person is hardly sufficient.
  • Ambiguity is similar to Uncertainty but it is important not to confuse the two. While Uncertainty means that no one can anticipate the important information because it is not known, Ambiguity means that one has this information but does not know how to interpret it because different interpretations exist depending on the change of perspective. This can lead to prejudiced, one-sided assessments of the situation.

It is therefore clear that in the age of the VUCA World, companies have to make a greater effort to achieve their corporate goals. The effects of the VUCA world not only influence the market, but also the internal structures of your company; employees may be worried about the future, feel demotivated and unstable, which in turn reflects on your company. Decision-making processes become more difficult, especially when it comes to long-term projects and innovations. If management does not take the initiative in this matter, there is a possibility that a VUCA world will emerge within your own company, characterized by unpredictability, rapid changes, complexity and opaque areas of tension.

The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.

Peter F. Drucker

How Does Your Business Survive in the VUCA World?

In the following, we will show you the important and promising strategies. These include, on the one hand, the ‘Build, Measure, Learn’ scheme and, on the other, the steps of lean management.

Lean Start-Ups: Build, Measure, Learn

When it comes to founding a new company in the VUCA world, startups with limited budgets have a particularly hard time factoring the many risk factors into their planning so as not to fail right at the starting gate. To do so, it is worthwhile to embrace the principles of Build, Measure and Learn.

First, the minimum version of the product is launched (build), then it is continuously evaluated on the basis of previously defined parameters and customer feedback (measure), and finally, conclusions are drawn on the basis of this data for the next adaptation steps (learn). This is to be understood as a cycle that is run through again and again in order to guarantee optimal adaptation to the customer and to be able to react agilely to upheavals.

Food for thought: Effective strategies for success in the VUCA World always involve foresight and continuous learning through calculated experimentation around new initiatives as well as adaptation to change processes. Thus, the strength lies in agility to seize opportunities and to proactively plan for a change of circumstance. The journey is the goal.

The three stages of lean management

Lean Management is based on the principles of Logical Incrementalism. At first, this sounds like another empty ‘ism’, but it brings both safety and progress to the VUCA world. An increment is the size of a step-by-step change and that is also the heart of this strategy; it is a deliberately chosen, small-step approach characterized by calculated experimentation and learning from the results obtained.

The first step is to collect and analyze data. This should be done with foresight, which, in addition to learning from past experience, also takes into account trends, different scenarios and coexistences. This is particularly important when it comes to the uncertainty and fast-moving nature of the VUCA world. The scenarios should not be neglected because they prevent ambiguity and allow a flexible view as well as action possibilities depending on the potential outcome. In doing so, you should ask yourself the questions of what could happen and which effects it might have.

The second step is strategy creation which is a very subjective process that often involves various action steps. These are based on a set of goals and objectives. Young companies in particular will initially see a kind of black box here, which will only gradually be filled with more experience and insights. So-called road-mapping should be taken into consideration. It answers the questions of where the company currently stands, which goal it wants to achieve at which point in time, and the ultimate plan of action. Dynamics is a key factor; if the strategy is designed with this in mind, implementation will succeed all the better.

Which leads to the third step: an implementation of the planned strategy based on logical incrementalism and dynamic road-mapping. It allows a flexible approach for achieving the strategic goals. Road-mapping is more than just strategy definition and implementation. It includes the immensely important factor of successful communication of this strategy, because without the pervasive understanding of all involved, the implementation cannot unfold its full potential.

Gain Strength from Continuous Learning

No matter where you are with your company at the moment – effective strategies for growing in the VUCA world always include foresight and, above all, continuous learning from controlled testing of new measures and the appropriate adaptation for change processes. Thus, the strength lies not in a rigid organization but in the agility to take advantage of opportunities and proactively plan for changes in circumstances. The path is the goal.

It is worthwhile for the creation of this strategy, to bring experts on board, who are characterized by great networks and experience in management. Contact us – we are happy to be your sparring partner and always have an open ear for your ideas.

Are You a Resilient Business Manager?

Efficiently communicating the right decision at the right time and always being in close contact with employees – today’s demands on managers are numerous and high. Leaders have to understand and manage a broad spectrum of tasks while maintaining an appropriate manner and setting a good example. The bulk of the responsibility rests on their shoulders, especially during turbulent times of crisis. But there are approaches that make it easier to master major difficulties as well as the little things in everyday life.

Five characteristics of good leadership

According to the Gallup Engagement Index, many employees are dissatisfied with the way their superiors manage their companies. It is therefore not surprising that experts have been calling for a change in leadership style for corporations, organizations and companies in recent years. What does a good leader bring to the table and how can a modern leadership style build resilience?

1. Engage in critical self-reflection

Start by questioning your own leadership behavior – if you make demands, you should be aware of how they may be perceived. This also requires a comparison of your self-perception with that of others and, if in doubt, adapting your behavior by learning new skills and ways of communicating. Openness to supervision in resolving conflicts is indispensable. Admitting your own mistakes is no longer a sign of weakness if you deal with them honestly and self-confidently and make your insights accessible to everyone.

2. Act with self-confidence

This point is essential: a confident manner paired with personable openness. However, be aware of the risk that great self-confidence can quickly be perceived as complacency, an inability to accept criticism and arrogance. Steering a middle course means to strengthen the team spirit and to express appreciation for your colleagues. Confidence is especially important for young managers. If the trust of older, more experienced employees is lacking, you should openly express your interest for their concerns. These conflicts should not be allowed to smolder in the undergrowth – clear up where doubts are not appropriate and where they may be, create a space for discussion and mutual learning. This way, you demonstrate your leadership qualities even to skeptics.

3. Communicate effectively

This is such an incredibly important and too often neglected aspect. For a long time now, it has not only been the manager’s expertise in the field that counts, but also who communicates what and how. It is worth creating structures that enable interactive, clear and team-oriented collaboration. Everyone should have the opportunity to bring ideas, doubts and feedback to the attention of their superiors without long detours. Keep the lines of communication as short and effective as possible and grant more trust than was usual in the conservative style of constant control.

4. Be the compass for business goals

As a manager, you are a role model. You set the course for navigating through both gentle and rough waters. It is important to create a positive outlook for the future and to radiate optimism because it is incredibly motivating when everyone has the feeling that they are jointly working toward a promising future. This is especially true in times of crisis and for challenges associated with technical innovations such as digitalization. Exemplify the company mission.

5. Flexibility

A keyword that is currently heard in many areas of modern management. It requires the ability to decide on a course of action that is appropriate to the situation – both professionally between risk and safety and personally between strength and compassion. At the same time, it is important not to lose sight of the goal. The demanded range of competences has increased considerably which makes further training and adaptation necessary, rather than a complete upheaval of pre-existing structures.

Food for thought

Management:

  • Analyze change measures & provide a constructive explanation thereof
  • Conduct risk analyses
  • Set clear expectations
  • Repeatedly identify goals & adjust the strategy
  • Understand & advance digitalization
  • Openness to new technologies

Employee Relations:

  • 360 degree feedback culture
  • Appreciate & praise good performance
  • Give chances to improve
  • Honesty, openness & commitment
  • Listen to wishes, discuss & take them into account
  • Visualize task distribution & progress, check off goals

Beginning with your own mindset. This is what significantly influences the resilience of managers. With both a crisis management plan and a satisfied team that communicates well, overcoming tough challenges is much easier.

 

7 Things You Should Absolutely Avoid Doing

  1. Conservative leadership style: passiveness instead of progressiveness. Authoritarian control instead of trust and dialogue. Exerting pressure instead of motivating. Constant criticism instead of appreciation of achievements.
  2. No self-reflection: According to the Gallup Engagement Index, the vast majority of all managers are convinced that they have a good management style, while many employees criticize the lack thereof. This disparity must be closed.
  3. Indecisiveness and poor communication about decision-making
  4. Assumption that one coaching seminar on communication and leadership will do the job. Continuous learning through interaction is important.
  5. Avoiding uncomfortable conversations will not achieve anything, they will rather become an even bigger problem. No one wants a scaredy-cat as a team leader who cringes at every difficulty.
  6. Ineffective coping with failure: suppressing a defeat in the long run or even denying it and pushing it off on others is a big mistake. This leads to a poor error culture throughout the team. If you demand that your employees be honest about their misjudgments, you have to set an example yourself. Say goodbye to the idea of having to appear infallible.
  7. Arrogance: The potential thought that one’s higher degree is worth significantly more than years of experience is a fallacy. Ideally, practical experience and theoretical expertise complement each other in your company, without one being appreciated more than the other.

You will only get to know a good helmsman in stormy seas.

Seneca

Who can help managers navigate a crisis?

In addition to the Seven Pillars of Resilience, which are well-known from psychological research and which we have already highlighted in the article about Resilient Business Design, we would now like to include the role of HR here. A modern leadership style is currently more in demand than ever, especially due to the digital transformation and the pandemic, so that companies can continue to live up to their claim to success in the long term. Therefore, it is advisable for team leaders to seek support from HR management. When changes occur, it can be consulted for innovative ideas and solutions. It also creates a framework for the continuous personal development of managers through training and supervision.

After all, despite their prominent position, managers are not left to their own devices. All those leadership skills mentioned earlier can be honed and improved with the help of human resources or other networks. They help to turn defeats into learning effects, to improve the basic positive attitude and not to dwell on past mistakes for long. In the process, you will be guided to ask the important questions of failure: What do I take away from this experience? Does the defeat also have positive consequences and how can I maintain my reputation in times of crisis? What skills will now help me to regain fresh strength?

Reframing is a good key point for this. It refers to the ability to look at things in a new light, from a different angle, and thereby reevaluate them completely. If you constantly focus on how bad a situation is, it will not change. But with a new way of looking at things, completely new visions emerge. This is best achieved with guidance from experts.
HR departments are also familiar with innovative measures outside of mindset work that break up the routine, such as integrating a fixed sports break into the office routine or loosening up the work environment with purchases such as a darts set or the like.
Such networks provide support for getting to grips with new leadership situations and overall provide guidance for self-management. That way, things will work out on the grand scheme, too.

Take a step towards the future today and become an excellent manager. Do not hesitate to contact us – we will be happy to support you on your path.

Pin It on Pinterest