The resilience of an ecosystem is its long-term ability to deal with expected and unexpected changes. It concerns not only the successful adaptation and transformation before and during a situation of stress, or even in a disaster, but also maintaining a critical level to survive. Resilient ecosystems are hence able to recover faster and emerge stronger and healthier from such disturbances.
In today’s fast changing world, it is crucial for every organisation to be adaptive and transformable with regard to all aspects of the ecosystem in which it is embedded. Such aspects include the economy, globalisation, people, market, competitors, environment, natural disasters, technology, government and the political landscape, and many more. An organisation has to be resilient to continue successfully.
We could think about a fire in a high-tech production plant, for example, where the smoke particles in the air-conditioning system cause a production breakdown for several months, the consequences of hurricane Katrina in 2005, the floods in Central and Eastern Europe in 2002, or even the impact of a cyber-attack on a systemically important financial institution which causes a massive loss of client data.
The question is: how resilient is your organisation in such a critical situation?
Most organisations have an enterprise risk management framework, which is well designed to handle all natural or man-made risks. However, in complex dynamic systems, hindsight and error prevention are far from sufficient just as it is unrealistic to think that a few people alone can manage a disaster situation at an organisation. Fast adaptability and transformation before and during an incident − paired with distributed intelligence − are needed to cope with such situations of stress.
But how do you transform your current organisation from a reactive one into a proactive one?
What Is Resilience Engineering?
Resilience engineering is often called the ‘new way of thinking’ about safety and risk. But what exactly is new and different about it?
Risk management and enterprise risk management are based on hindsight. They focus on cause detection and error prevention, respectively. This approach reacts to exogenous causes, like natural disasters, or endogenous sources, like a technology breakdown or (very often) human error. Based on the information available, an organisation can introduce measures − risk controls, risk prevention and risk budgeting − to optimise the risk-return profile and achieve the organisation’s strategic financial goals. These measures, however, are often not as effective as expected because the planned and trained reactions are unable to cope with real-life events.
The more complex and the more dynamic a company’s ecosystem is, the more difficult or even impossible it is to manage the risks and changes in the traditional way. Thus, instead of administrating risks and changes reactively, resilience engineering aims to improve the ability of an organisation and individuals within it to create foresight and to anticipate the changing nature of risks, before a failure and its harmful consequences actually occur (David D. Woods 2005). In other words, resilience engineering is a paradigm for risk and safety management which focuses on how to help people cope with complexity under pressure by bearing one question in mind: why do things go right rather than going wrong?
Similar to the enterprise risk management approach, resilience engineering concentrates on both threats and opportunities as well as unstable situations. In a resilience engineering sense, irregular variations, disruptions and a degradation of the expected working conditions are not a breakdown, a malfunction or a human error. Instead, such events mean that an organisation has failed to demonstrate the readiness and ability to cope appropriately with an anticipated change in a complex and dynamic ecosystem. Change can either be negative or positive. Each organisation has to adjust its performance in advance to adapt to the current situation and conditions, and to anticipate the impact of change in order to achieve its expected goals in full.
Hence, resilience engineering analyses no less than the performance variability within the ecosystem in question, and how we can measure and improve an organisation’s resilience.
How to Transform your Organisation into a Resilient Organisation
Resilience engineering focuses on the states and behaviours of the ecosystem and its connected systems, and especially on its dynamics and performance variability. This means that we do not look at a system in terms of when and where an incident happened, and ask what was missing or why it went wrong. Rather, we look at the system to see when it performed well. We analyse what was present in order for the actions to have functioned correctly.
In order to make a smooth and successful transformation, we first have to understand how an organisation is expected to work (the ‘work as imagined’), i.e. its performance and its performance variability. Traditional risk or failure/error management counts failures and incidents and, afterwards, sets up the quantitative statistics and models needed to try and define preventive actions. In the resilience engineering concept, we have to describe and understand what is really going on (the ‘work as done’) in an organisation.
Because the performance of an organisation and its ability to anticipate changes is neither static nor simply an indicator, we have to start by outlining the abilities that make resilience performance possible. Erik Hollnagel et al. (2006) set out the four basic abilities:
1) the ability to respond appropriately to a changing environment
2) the ability to monitor the right thing
3) the ability to learn the right lessons
4) the ability to anticipate the right developments.
Based on these four abilities and four corresponding sets of questions (see Hollnagel, 2009:117 in Resilience Engineering Perspectives, Volume 2), we can start setting up a resilience profile and learning about the organisation’s resilience performance.
Monitoring this analysis over time shows where changes occur (work as done) and where changes should occur. The results can be compared using a spider diagram for each of the four abilities, which is then summarised on a star diagram for all four abilities.
Overall, resilience engineering can serve as a valuable instrument to measure resilience performance and, therefore, help to shape an organisation into a more agile, anticipative and stable organisation.
If you have any questions, do not hesitate to contact me.