Companies need to become more resilient and embrace change as a business capability, says Johannes Stock, our Global Head of Design. We sat down with him to learn more about this idea and to discuss what companies need to do to build their resilient future.
The concept of resilience has lately gained a lot of traction in the business world. Where does this come from?
The term itself has been adopted from the field of psychology and describes the ability of an organization to adapt to rapidly changing (market) situations. More and more companies start to understand its strong impact on the viability and sustainability of their business. However, it’s far beyond simply recovering from crises or taking actions to better weather the next storm. Focusing on a resilient future means to proactively prepare for change. This enables companies to shape their future and remain relevant in an ever faster changing world.
You mentioned the term resilient future. What is the difference to resilience as it’s commonly understood?
What is new and far-reaching here is the introduction of resilience as criteria for securing and shaping the future. For us, it’s not only about bouncing back from adversity, but also bouncing forward. If you want to strengthen the future viability of your company, you have to increase the resilience of the entire organization. Looking behind the soft factor, resilience entails learnable and measurable practices that leaders can actively promote in their organizations. This begins with the insight that the future cannot be planned but shaped, which means that we must not only allow but actively promote change.
What can companies do to build their resilient future?
When we support clients on their journey to a resilient future, there is of course no one size fits it all solution. However, we discovered five principles to be highly effective:
1. Reframe Reality
Neither a pure internal, nor an external view is sufficient to develop a company in the right direction. What works better is to take up weak and informal internal signals and systematically reinforce them from the outside. You need to check if your internal assumptions about the world can survive in the face of reality.
For example, the innovative strength of a leading commercial vehicle manufacturer in Europe was sustainably increased through a development program that focused on the co-creation of content from the very start. Ideas that were favored internally at first but did not address customer needs were discarded through the cooperation of internal experts and external coaches, later being replaced by ideas with real market potential. Employees were thus allowed to draw their own conclusion instead of having it dictated. When solutions like this are grounded in the corporate culture, you can leverage the potential of your organization and engage employees, which will lead to better results overall.
2. Connect the Collective
Many larger companies miss alignment between individual decision-makers and/or departments. Although they want to drive changes forward, there is no agreement or no one wants to make a decision. What’s often missing is a whole-system perspective that helps everybody to support the greater goals of the organisation.
In our work, we often see that project owners separate themselves too much from others in similar roles, focusing solely on the success of their own project. While this hyper-focus helps them to get results, it can easily lead to a fragmented landscape. This can be countered by placing the individual projects in a more systemic context through programs that aim for joint value creation. Each project then makes its contribution to the shared goal, creating a common interest in the overall success instead of pursuing particular interests. As a side effect, the implementation capacity of the department increases.
3. Expand Expectations
Adapting to change is not only about new tools or copying best practices. You have to actively stimulate and support curiosity within the organization. Encourage employees to new and unfamiliar ways of thinking and working, and ask your managers to lead by example. For example, you can run an Opportunity Workshop to explicitly ask the team for emerging options in the market. Bringing in new and uncommon impulses from artists, scientists, or unconventional thinkers might invite discussion and encourage employees to join in. We often see how great ideas emerge when domain experts are confronted with external inspiration.
However, a lack of guidance results in random experimentation, where everyone follows individual objectives and resources are spread too thin for promising experiments to succeed. So look at what innovation experiments can be done and select carefully. Aim for a healthy mix of iteration and leapfrog innovation.
Lastly, and this is one of my all-time favorites: You need to kill your darlings! In many projects the level of scrutiny when it comes to testing ideas, e.g. in the form of a prototype, is not good enough. As creators and developers of new services and business models, we become very fond of our own ideas. By applying what I call Kill your Darling Testing, we can overcome this strong confirmation bias.
4. Bring value to all
Value creation is about more than generating success for shareholders and management, and it should never be about serving internal politics. The goal is to involve the entire system, so think about value for employees, partners, your community and society at large – especially in the long term.
For instance, we can make it a goal that everybody working for and with us ends up a little bit better prepared for the future. We can invest in our employees’ development to an extent that goes beyond what is necessary to do their current job. As a consequence, unforeseen crises can be better dealt with, the employee becomes more valuable for the job market and partners and clients can benefit from a better transfer of know-how.
It makes sense to consider multiple kinds of value creation beyond the economical. As a business, you have the power to create value related to regional development, social cohesion, tolerance, equality and fairness. Using it not only makes you a force of good, it also improves your resilience as it creates trust. Others will be more inclined to help you when they see you contributing to what’s important to them.
5. Build change capacity
The whole company - and by this I mean the senior management together with all employees - should prepare for change as well as possible. Change will increasingly become a reality in our professional and personal life. If you want to be able to proactively design the future of your organisation, it is essential to be prepared for it.
This means to not only think along the lines of current (business) reality but to make room for future thinking, e.g. through future scenarios. Practice thinking about different possible futures and their consequences, and try them out together. Stay aware of employees' fears and take care of them as best as you can to draw positive energy from hesitations. Finally, think about change as a journey. Identify the smallest meaningful next step you can take and get started. You can call it your Minimum Viable Change. Creating momentum is the most important thing to build better resilience over time.
What are typical concerns when employees are faced with change? And what can companies do to solve them?
A common fear that comes with change and progress is to not being able to keep up with constantly accelerating technology or being replaced by younger employees or automation and AI. It is important to recognize the underlying fear patterns early and to fully address them to actively reduce the worrying.
It helps to openly speak about what makes people valuable to the company and also to invest in their future. Strengthen their self-confidence in their effectiveness, but also draw attention to gaps and challenges. Work together to stay relevant, and create a future for your company that is meaningful for everyone. You will be surprised what ideas come up when you start asking for them.
What actions would you recommend to actively promote change?
Managers have to understand that change is nothing that happens to us. We do not have to stand by and be passive. Change always happens from and through us. When managers exemplify this attitude and communicate it to their employees, they strengthen the confidence of each individual to successfully master change. My personal learning from change programs over the last years is that management needs to lead the way. They need to visibly change their own behavior in order to inspire change in others.
Some practical steps I would recommend to managers:
Establish and strengthen relationships beyond departmental boundaries. Show that the value of networking is seen and rewarded in the company. Make examples of cross-border teamwork visible. Implement tools for a whole-system perspective and share it with everybody (not just the management team).
Make the expertise of employees visible and celebrate beyond positions and roles. At the same time, make the discussion about gaps in know-how a regular, normal thing. Talk about weaknesses to find ways to compensate for them.
Underline things that work well and emphasise challenges that have been mastered. Celebrate successes and strengths instead of chalking up failures (using insights from positive psychology).
To overcome bottlenecks and barriers that stand in the way of employees taking decisions, ensure a sufficient flow of information, and make data available. Informed employees think along and can develop solutions themselves. This is real empowerment beyond the buzz.
Ask questions instead of just giving answers. Practice to say: “I don’t know.” Develop a curiosity for the concerns and challenges of others and give them room to talk.
By demonstrating this sort of leadership, managers can actively promote the ability of their company to master resilience and embrace change as a business capability.