The Organizational Resilience Handbook

A Practical Guide to Achieving Greater Resilience

Graham Bell

• Publisher: Kogan Page
• Year: 2020
• ISBN:
  9781789661859
• Edition: 1
• Topic: Business
• Subtopic: Insurance
• Index: Business

For businesses to grow and be successful their approach to resilience must be defined by a holistic and risk-focused outlook, rather than one which is narrow and dominated by event-oriented continuity practices. The Organizational Resilience Handbook shows that success is as much to do with innovation and the speed with which new products are brought to market as it is with organizations having to deal with unexpected crisis situations. It comprehensively covers the full breadth and depth of the field and introduces related topics such as security, safety, e-commerce, emerging technologies and customer experience.Through adopting a strategic and progressive approach, practitioners can apply the book's methodology to develop an in-depth understanding of resilience within their own organization and use it to effectively engage with the board and senior management in developing strategies for achieving greater resilience capability. A range of high-profile case studies, such as Mercedes, the UK's National Health Service, Alibaba and BP, help to illustrate the concept of resilience by detailing characteristics and behaviours which confirm its meaning. The Organizational Resilience Handbook is a practical guide to self-assessment, benchmarking performance and implementing resilience frameworks in any organization.

4

Case studies

Within the context of organizational resilience, and indeed any subject for which there is such a volume of emerging knowledge and range of interpretations, the use of case study material can be particularly relevant and informative. Case studies are useful in illustrating different aspects of resilience theory and help us to explore and reinforce different aspects of our accepted definition. Importantly, they also help us to gain an understanding of what a resilient organization looks like without having to gain access to organization-specific information through some form of assessment, or through having worked with the organization in some capacity.

This chapter introduces a number of international case studies, which include the influential role of Chinese e-commerce giant Alibaba, the continued success of Mercedes Motorsport in Formula One, and the collapse of the UK retailer House of Fraser in 2018. Several of our case study examples make reference to specific crisis events and whilst I am always very careful to emphasize that resilience is not an event-focused concept, I am also the first to acknow­ledge that how an organization responds to a crisis can have a significant impact on its long-term success and growth potential. The reason for using crisis events can also be explained as it is not the management of the crisis which is our primary focus, but rather what this tells us about resilience capability and the gaps or weaknesses which might be exposed in respect of how the organization manages its strategic risks.

Case studies should create an engaging and informative story for the reader and their value in providing a reference to real-world situations is widely recognized in academia and in management studies. However, the challenges of promoting a particular organization or situation for illustrative purposes are perhaps similar to those associated with volunteering a definition for resilience: that is, they present easy targets for anyone who may be adopting a different perspective or who may be seeking to promote an alternative view. The other main challenge is perhaps that of currency: that is, whether the example is able to stand the test of time. With some care this particular risk can be mitigated away, and even if a once successful organization were to subsequently fail, this should not matter. In fact, we should actually find their fall from grace after the passage of time that much more informative, if we bother to understand the reasons why it happened.

There will always be people who, by virtue of their access, position or other experience, are extremely well informed about a particular event or an individual organization. This is inevitable and not something to be feared when writing or considering material for a case study. In recognition of this, what I can do here is to endeavour to draw references from different sources and reflect alternative perspectives where they are apparent. I will also aim to be clear and consistent with my focus, ensuring that I highlight as many aspects of the organization’s resilience landscape as possible and not paying too much attention, as mentioned above, to individual crisis events or how successfully they are managed.

Organizations which are presented as case studies do not have to be the most resilient, and in fact they can appear to be in terminal decline and still exhibit some fascinating and highly relevant traits and characteristics worthy of further examination and discussion. One only has to think about some established religious or faith-based organizations to understand this particular point. The thing which defines case study organizations both collectively and individually is that they speak to resilience in some way and can be positioned by reference to our definition and resilience maturity scale. For example, Mercedes Motorsport speaks to growth and competitiveness more perhaps than the example of BP, which in this context at least speaks specifically to re-shaping and strength.

Before beginning to examine the case studies themselves and touching immediately on the holistic definitions we now have available to us, the BP example is a particularly good one to use as an illustration. It is worth remembering that resilience for many commentators remains little more than the ability to recover from shock or the capacity to cope, and for others reference to resilience is reserved exclusively for considerations of climate risks at a community or societal level. Interestingly, the marine ecosystem in the Gulf of Mexico has proven itself to be remarkably resilient, if only using the rather outdated ‘bounce back’ definition of the term. That is not to dismiss the concerns raised about longer-term damage; after all, 2010 is not that long ago, but the level of recovery exhibited by the marine environment must be at the higher end of many expectations back then. Incidentally, the internet contains plenty of well-informed commentary which charts the recovery in these natural marine habitats, and also continues to highlight ongoing concerns and long-term impact on wildlife and coastal communities.

The BP story is also capable of supporting multiple areas of focus simultaneously, each of which speaks in some way to the broad perspective of organizational resilience introduced in these pages. Delving into the detail of safety, environmental, commercial and societal aspects of the Gulf of Mexico explosion therefore allows the reader to consider not only how the example supports our definition of resilience, but also how it points to specifics such as crisis management communications, organizational re-design, political engagement and the impact of regulatory change.

Referring back to the definitions provides an extremely valuable way of considering the value and relevance of individual case studies, and can also highlight specific aspects from within the ORCM and the following chapter as a way of introducing their significance. My definition of organizational resilience is deliberately strategic in nature and intentionally broad, characterizing capability in respect of strength, competitiveness, re-shaping and growth. Any organization which could be considered as offering examples or learning relating to resilience will inevitably be unique in terms of its maturity and the context within which it operates. Some will have a long and high-profile history, perhaps synonymous with a particular sector or product, whilst others will be less well known but will have experience which can be still shared.

Finally, it is worth emphasizing that other examples or approaches to case study material should be actively considered by practitioners and scholars of the subject – those case studies offered here are certainly not intended as an exhaustive or definitive list. Some of the most fertile areas for case study material are those experiencing the most change, such as retail and technology, and there are numerous articles and indeed books devoted to the science of business success (and failure). For example, a quick internet search will highlight a number of articles charting the rise, dominance and ultimate decline of Nokia – a firm which helped to define the mobile telecommunications market, and which once boasted a market share of well over 40 per cent.¹ Oxfam, an international aid charity, found itself at the centre of a historical sexual abuse scandal in 2018, the full impact of which has yet to become clear not just for the organization in question but for the voluntary and aid sectors more generally.²

Case study material need not necessarily be that which is headline news. The Eastman Kodak Company (Kodak) sought bankruptcy protection in the United States in 2012, having struggled for a number of years with a decline in the use of photographic film and an uptake in digital imaging which it was slow to embrace. Still describing itself as a ‘technology company focused on imaging’ and despite some residual brand loyalty, rather like Nokia it has fallen from view and continues to restructure and re-shape its business.³ Practitioners in search of case study examples should also consider how some long-established direct-selling companies have sought to manage the transition from traditional pre-digital selling techniques, such as door-to-door, that would doubtless uncover numerous examples of good practice or informative approaches.

Case study 1: The collapse of UK retailer House of Fraser in 2018

Our first case study is provided by a retailer which had featured prominently on the UK high street for many years. However, it was a business increasingly ill-equipped to compete in a fast-changing environment which was being shaped by growth in new technology and the constant interruption provided by new market entrants. It was also operating in an environment in which traditional customer behaviours could no longer be relied upon. Using business failure as a route to identifying case studies is particularly important with regard to resilience, as this is precisely what defines the organization’s persistence and which synchronizes with the labels we use in the ORCM maturity scale, outlined in Chapter 5. Importantly, and whilst success or failure provides our basic parameters, this is not a case study which describes a business being undone by a singular crisis event. In fact, far from it.

The collapse of House of Fraser (HoF) was one of the more memor­able events within what were generally harsh trading conditions for UK retailers in 2018. HoF began life as Arthur and Fraser in Glasgow in 1849 and had grown into a large, well-known business with a brand immediately recognized across the country. As widely reported in the news media at the time, when it collapsed into administration it had already posted significant losses for the previous year and had debts of over £1 billion.⁴ HoF was viewed as a brand-driven retailer, something which was evidenced by the numerous brands owed money when it went into administration – the detail of what was owed being published in the annual accounts of companies such as Oasis and Mulberry in 2019.^5,6 However, it was not recognized by analysts as a digitally-led company and had only launched its online store in 2007. Its product mix, by virtue of the famous brands which it presented, was often identical to that which could be found elsewhere online, but often more expensive. Another charge commonly levelled at HoF related to a lack of innovation in its store estate and an approach to attracting customers into the stores which wasn’t aligned within its core retail offering.

In 2004, the chain was being described by the Interactive Media in Retail Group, a trade body, as one of the UK’s ‘online laggards’ that had ‘failed to embrace internet trading opportunities’.⁷ In addition, HoF’s stores lacked the attraction of many others on the high street and its own brand offering was increasingly viewed as secondary to the large number of concession owners which presented their products in-store. It was also widely acknowledged that HoF simply had too many stores, and instead of slimming or streamlining its estate, more stor...