By now, most New Year’s resolutions have been forgotten, but the ability to “re-solve” and respond to changing conditions is imperative for your business in these uncertain times. For the remainder of 2011, these columns will form a 10-part series using the acronym RESOLUTION. Let’s begin with the concept of resilience.
The Merriam-Webster Dictionary first defines resilience as “the capability of a strained body to recover its size and shape after deformation caused especially by compressive stress” and secondly as “an ability to recover from or adjust easily to misfortune or change.” A few years ago, I began to think of organizations as organic. Like living organisms, they grow, need nutrients and must be nurtured as they mature and develop an individual identity. Eventually, all organizations cease to exist.
Living things have a predisposition to maintain homeostasis, the condition of reverting to the “same state.” For example, the human body strives to maintain a constant temperature of 98°F. Though it can temporarily tolerate fevers or even hypothermia, it must re-establish the original target temperature or die. A healthy immune system creates this resilience.
Organizations such as the Resilience Alliance (www.resalliance.org) have discovered that similar factors contribute to the resilience of natural, social and organizational systems. To build resilience into your business so that it can withstand the effects of change, you must understand the forces at work.
The water strider is an insect that walks across the surface of a pond by creating small depressions in the water with its legs. The force of each step is returned in the same way a gymnast jumping on a trampoline is propelled back up after each jump. Opposing forces counteract each other, and balance is maintained. It dips below the surface, springs up and returns to its original position. Your business must also be able to rebound and maintain its target state.
The factors contributing to building internal strength and the capacity to rebound can be related to your financial picture and corporate culture. The first is a strong sense of purpose. You must have a mission statement, a strategy to accomplish it, along with a vision for the future, and be able to communicate it through a network of strong connections. Everyone in your company should understand your mission, how you plan to achieve it, and that they are welcome to contribute solutions.
Next, you must have a way to track lessons learned from experience. Debriefing sessions help identify patterns. Knowing why some jobs are highly profitable and others lose money, you can improve the precision of your estimating and job costing. Matching the skills of your people with the needs of preferred customers helps you refine the scope of your marketing. Every company should write its own “book of knowledge” and use lessons learned to shape future strategies. Knowing why you succeed is just as important as knowing why you fail.
Maintaining health is also important. Your business has a level of immunity that helps it rebound from the stresses and negative impacts of the marketplace as well as internal conflicts. Having a cash cushion to cover at least two months of operating costs or an available line of credit builds immunity to slow payment or unclaimed retainage. Balancing your investment in fixed assets with future growth projections helps you prevent bottlenecks and wasted capacity. You avoid bloat and excess weight without running too lean.
A hopeful attitude, sprinkled liberally with humor, contributes to resilience as well. Laughter produces positive effects in the human body and strengthens the immune system. The emotional state of your company affects the productivity of your people and their ability to deal with the stress of change. Remarkably, your own ability to anticipate and embrace change sets the emotional tone for everyone else and creates a problem-solving attitude that can prevent small obstacles from obstructing the whole organization.
The ability to take decisive action is also a reflection of your ability to maintain perspective. When my husband came to work with me in the family construction business, he often tempered my tendency to overreact with a simple, “Nobody died.” Establishing such a code word or phrase helps break patterns that perpetuate conflict and breed negativity. Remarkably, clearing the environment of pessimism also improves productivity.
Sometimes, adaptation is not enough to ensure survival. A forest fire devastates the landscape, but it also clears away the dead wood that blocks sunlight and eventually would turn a mature forest into a swamp. It is amazing how fast new, healthy growth is established on soil enriched by the ashes. If your business must undergo such a sweeping transformation, it is much more likely to survive if the seeds of new life are sown in the soil of resilience. In 2011, make sure your company will be able to bend, but not break.
NORBERG-JOHNSON is a former subcontractor and past president of two national construction associations. She may be reached at email@example.com.