Resilience – the key to riding waves of uncertainty

Resilience - riding the waves of uncertainty

Kaylene Sampson, Senior Research Consultant, Resilient Organisations
August 2018

My home town has been rebuilding from crisis for almost eight years.  September 2018 marks the eight-year anniversary of the first of a series of devastating earthquakes to hit Christchurch, New Zealand. Since the first earthquake on 4 September 2010, thousands of aftershocks have rocked my city, including the 22nd February 2011quake which caused 185 fatalities and countless injuries alongside substantial damage to the city.

As I was adjusting to this new post-disaster city, the government began counting up the cost. The physical rebuild of the commercial sector was estimated at $16 NZD billion on top of the significant individual losses experienced through changes to the business environment. Media reports suggested that around two-thirds of New Zealand businesses were impacted. Loss of premises, supply chain problems, destruction of necessary infrastructure, low staff morale, changes in demand and diminished talent pools were among the challenges facing businesses up and down New Zealand.

A creative approach

In the new post-disaster environment, I saw the efforts of Christchurch businesses taking creative steps to adjust to their changed metaphorical and physical landscape. Some hospitality businesses reinvented themselves as mobile food outlets while others simply closed their doors, cognisant of the need to wait. Brightly coloured and modified shipping containers began to pop up all over the city. Serving everything from fast food to fashion, these relocatable retail outlets were a quick and agile solution to damaged buildings.

Some businesses increased their online presence in an attempt to address the dilemma and maintain turnover. As some residents exited and others migrated inwards, diversification of products or services was yet another solution to changing local circumstance. Parts of the construction industry partnered with the demolition industry, recognising the growth in demand for their new business partner as well as the likely halt on their own core business, at least in the short term. It seems creativity has become the new normal in much of recent Christchurch business activity.

Ensuring you can ‘hang out your shingle’

During business as usual most businesses sit in an approximate equilibrium; that is the demand for goods and services approximates the ability to meet it. However, what about a non-BAU environment? How does this equilibrium shift and how do businesses respond?

After a major disruption perhaps the most immediate and traditional concern focusses on ensuring you can continue to open your doors, ‘hang out your shingle’ and proceed. 

Much of standard BCP efforts focus on ensuring that your operation will still be able to meet the needs of your customers. Being certain you have back up for critical infrastructure and having potential alternative locations are among the kinds of well thought out actions that address this concern.  However, while maintaining operability is critical, the nature of impact can be unpredictable and complex, meaning that accounting for every likely scenario can be exhausting and costly. Additionally, focusing on operability is only half of the story; the other part relates to managing demand – the bit customers bring to the table. 

Winners and losers

In the years following the Christchurch quakes customer demand was simply not uniform across all businesses. Around one fifth of the businesses we engaged with told us that initial decreases in demand were followed by a rapid and sustained call for their goods or services.  While some owners reported that immediate demand was strong but short-lived, a small number of businesses experienced slow and gradual decline or perpetual volatility that preceded closing their doors permanently. It is perhaps unsurprising that a few as one in ten reported “no change” in the patterns of demand they experienced.

It seems that the nature of the disaster itself became instrumental in the kinds of goods or services the population sought out. Damaged buildings need demolition before builders can swing a hammer, and the influx of trades staff improved the turnover of fast food outlets and temporary accommodation. In short, the quakes produced clear winners and loser on the new business landscape in which demand changed in one way or another for almost all businesses. So, if that is the case, how can you be sure you are on the winning team?

The agile approach to business continuity

Disruption events come with both opportunities and challenges, much of which are unpredictable. Though stable or growing demand is a critical part of business recovery, there is great uncertainty as to how demand may change in a post disaster environment. In addition, from a continuity planning perspective, accounting for every potential scenario can be exhaustive and costly. Resilience thinking, in contrast, employs a more agile approach that will make you simply more adaptable to respond to the impacts of unpredictable events.

But what characterises resilient thinking? What enabled those businesses in Christchurch to get operational and to match their ability to operate with the level to demand that existed?  Local businesses employed creativity in the solutions applied to unknown problems, built and utilised connections with people and resources, and engaged in leadership styles that created high levels of staff engagement where solutions to business problems were generated by team members who worked together to get the business through. In short, bringing resilience principles into the proactive management of your day to day operations, will position you well to ride the waves of uncertainty during times of crisis.

Shakeout Preparedness Tips for Business

Shakeout Preparedness Tips for Business

New Zealand ShakeOut, our national earthquake drill and tsunami hīkoi, is taking place on Thursday 18 October 2018 at 9:30 am.

ShakeOut is held across the world to remind people of the right action to take during an earthquake, Drop, Cover and Hold - and to practise a tsunami hīkoi (evacuation) if in a coastal area.

With the ShakeOut exercise coming up, it is a good reminder for businesses to improve their preparedness.

Resilient Organisations have put together a few tips and simple actions organisations can do to significantly improve their resilience and preparedness.

Download the ShakeOut Preparedness Tips

If you are a New Zealand organisation and want to find out more about ShakeOut and how to participate, go to the ShakeOut website, www.shakeout.govt.nz.

ISCRAM Conference, Wellington, November 2018

The inaugural ISCRAM (International Association for Information Systems for Crisis Response and Management) Asia Pacific regional conference is being held in Wellington from the 4th to 7th November 2018, and Resilient Organisations is excited to be supporting the conference.

The theme for the conference is Innovating for Resilience, and the programme will cover all of the major topics in information systems for crisis response and management, ranging from the technical to the social and including data, applications, social media and alerting and monitoring systems.

Visit the ISCRAM Conference website for more information and to register online

Improving resilience to natural disasters: West Coast lifelines vulnerability and interdependency

Improving Resilience to Natural Disasters: West Coast Lifelines Vulnerability and Interdependency

David Elms, Ian McCahon and Rob Dewhirst have been taking a fresh approach to evaluating infrastructure resilience investment priorities for West Coast communities.

By looking at the West Coast’s infrastructure as a system, they identify vulnerabilities that prevent ‘flow’ through that system and the importance of each critical pipeline of flow to the West Coast economy and community. Investment priorities are ranked according to their contribution to community resilience; thus infrastructure resilience and community resilience both contribute to the final results.

It is a really interesting approach, which takes a systemic view of resilience investment priorities.

The report is available below, along with the 12 supplementary documents.

John Vargo speaking on resilience and social enterprises

John Vargo spoke about organisational resilience with Steve Moe on his podcast series, seeds. In this series of podcasts Steve talks with people making a positive impact, particularly relating to social enterprises and entrepreneurs.  

Listen to the podcast on iTunes or access it via Castbox App on android phones.  It is also available at www.seeds.libsyn.com.

Incentivising organisational resilience

Incentivising organisational resilience

Businesses need to believe they are going to be impacted, that they can reduce this impact through their own actions, and that it is an essential part of business to do so.  Those who believe these things invest in resilience.  However, it is not enough to rely on the ‘enlightenment’ of businesses to act in their own self-interest.   Businesses must be actively nudged and supported.

In June 2017, the National Emergency Management Conference was held in Wellington, with presentations addressing the future of emergency management in New Zealand.  Bryce Davies, the General Manager Corporate Relations at IAG (Insurance Australia Group Ltd.), spoke about resilience as a national issue, where public, private, and civil society organisations must be able to thrive in times of crisis.  But how do we incentivise organisations to be more resilient?

In his presentation, Davies begins by outlining the benefits and limitations of insurance products to support organisational resilience.  Insurance plays a part in building resilience in organisations, yet only 20-30% of businesses have business interruption insurance.  Resilience requires a broad consideration of risks and impacts and how they are managed.  Ultimately, insurance can provide a backstop for organisations in the form of financial assistance, but cannot stop things from going wrong.

What is needed, Davies says, is belief.

Businesses need to believe they are going to be impacted, that they can reduce this impact through their own actions, and that it is an essential part of business to do so.  Those who believe these things invest in resilience.  However, it is not enough to rely on the ‘enlightenment’ of businesses to act in their own self-interest.

Davies provides three suggestions to get organisations to react, and invest in building resilience.

  1.  LEADERSHIP
    Resilience needs led by organisations like MBIE, Business NZ, Resilient Organisations, and local government.  By promoting resilience and providing supporting information, resilience becomes a normal part of business and everyday conversation.
  2. INCENTIVES
    Incentivise organisational resilience is through positive pressure.  A range of public and private sector mechanisms already exist, but they're not used for this purpose.  Regulators and industry groups need to think about how to use the levers at their disposal to drive resilience.
  3.  SEEDING ACTION
    The final suggestion is seeding action.  Here the example given was Government could require the development of sector-wide plans to ensure that services are still provided in times of crisis.  The alignment this would require across agencies and between public and private organisations would draw businesses in and move people away from a traditional focus on response.

The key takeaway from the presentation is that we cannot rely on enlightened businesses to act on resilience.  Businesses must be actively nudged and supported.

Watch full presentation

Learning new creative strategies for designing and facilitating learning experiences

Learning new creative strategies for designing and facilitating learning experiences

How much time do we spend ‘perfecting’ a report, or a proposal, or any of our outputs only to find we were answering the wrong question? Or that our solution did not gel with those meant to be served?

Design Thinking offers a new way of approaching problems that can help us to avoid these issues and ensure that our work is making a meaningful difference.  Although often thought of as ‘product’ related, design thinking concepts can be used to aid better practice in education, research and consulting.

Tracy Hatton has just returned from an intensive 4-day boot camp at the Hasso Plattner School of Design at Stanford University.  This program inspires new ways of understanding and tackling challenges with a core focus on ensuring a human centric approach to problem definition and solution ideation.

We are excited to see how some of the concepts might help in building more resilient organisations.

Creating future ready farm businesses

Creating future ready farm businesses

Earlier this month, the North Canterbury Drought Response Committee, in collaboration with Resilient Organisations and Fraser Pastoral, held a workshop for a group of farmers in the Hurunui District of Canterbury.

The workshop focused on how farmers could build their capacity now to navigate future turbulence.

Farmers in North Canterbury have recently faced serious adversity with a three-year drought, earthquakes, and shifting public perceptions of farming. The workshop was a chance for farmers to take time out from their day-to day operations and focus on big picture strategy. It gave them tools to change their approach to future disruptions from setbacks to opportunities for innovation and growth. The attendees came with open minds, generated thoughtful discussion, and demonstrated a clear readiness and growing capacity to lead their businesses into the future.

Read the report from the workshop