A balancing act between stability and flexibility: Resilient companies

Medium-sized enterprises are in a state of permanent crisis mode. This makes the question more urgent than ever for many of these companies: How can we structure our organization to be immune to external disruptions and emerge from crises unscathed? How can the company continue to grow and evolve in a volatile environment? This requires resilience.

Resilience as a fundamental building block of corporate strategy

Organizational resilience is a complex field that touches every area of a business. What characterizes a resilient company? On one hand, it is stable and robust enough to endure and survive crises. On the other, it is flexible enough to react quickly to changes and adapt accordingly. When necessary, it carries out the required transformation processes to overcome a crisis or shock—without losing its identity. A resilient company is capable of identifying both risks and opportunities during latent or abrupt crises and threats, and, in the best-case scenario, emerging from the crisis stronger. Naturally, corporate resilience also enables companies to purposefully seize opportunities during "normal" times.

What does an individual resilience profile look like?

First of all: there is no one-size-fits-all resilience profile for medium-sized enterprises. There are many different scientific approaches to developing a resilience profile. "Resilience" is also the subject of industry standards, such as ISO 22316:2017. It defines key components for identifying, implementing, and monitoring resilience within an organization and provides guidelines for improving corporate resilience. However, everything is always a matter of time, personnel, and cost. What a company needs to become more resilient depends on many individual factors. For resilient companies, it is not just about fending off crises and holding ground in dynamic times; it is primarily about adaptability and innovative strength. This requires future-proof processes and secure, transparent structures at various levels of the company. Fundamentally, successful resilience management is characterized by a mix of stability and flexibility tailored to the specific company. While stability plays a prominent role in larger companies, smaller companies demonstrate their strengths in a crisis primarily through flat hierarchies, high agility, rapid reactions, and a high degree of adaptability and versatility.

How is resilience management implemented in practice?

Ensuring stability in the company:

• A reliable network of partners and suppliers and well-maintained relationships make a company more robust.
• Strong leadership that acts confidently and effectively has a positive impact on the entire ecosystem and provides the necessary prerequisites for successfully guiding the company through crises.
• Transparency in all areas of the company is a fundamental requirement, allowing the business to see where it stands at all times and to react in a timely manner to inconsistencies, deviations, or disruptions—whether in liquidity, supply chains, or HR.
• Focusing on the company's economic success secures earnings and liquidity. Both are essential elements of a resilient company, as they provide alternatives for action.
• A focused strategic alignment of the organization and its business models.
• To accurately assess and understand where one's own company stands on the resilience scale, a clear, unfiltered reflection of its strengths and weaknesses is required. The company should be able to reflect on its ecosystem in order to recognize potential opportunities and crises.
• A positive corporate culture that clearly communicates guiding principles and company goals creates trust, team spirit, engagement, and commitment.
• With sufficient financial and material resources, lean periods can be bridged.
• Structures and processes should be adjusted to bring calm to the organization.
• Professional compliance management with internal standards and the establishment of an internal control mechanism prevents unlawful behavior within the company and ensures adherence to rules and regulations. This protects a company from avoidable risks and reputational damage.

Ensuring flexibility in the company:

• The digital transformation of the working world, along with the digitalization of production and supply chains, ensures speed, efficiency, and transparency—key elements of resilient companies. As the COVID-19 crisis demonstrated, digitalization fosters resilience on various levels. Automated and future-proof processes, for example in HR or liquidity management, make developments transparent, workflows faster, more efficient, and more flexible, while providing an up-to-date overview. This allows companies to identify negative trends early and respond in a timely manner.
• Diversification makes a company more resilient. By broadening its base, not focusing solely on one core business, and having "multiple irons in the fire," a company can gain a significant advantage during disruptive events. In this context, a forward-looking corporate strategy helps maintain focus on company goals despite diversification.
• Personnel development can be specifically targeted to foster key traits such as independence or agility. Decentralizing decision-making processes and authority can also make a company more resilient. A forward-looking HR management approach, utilizing essential analytical tools such as personnel plans, age structure analyses, or personnel development concepts, is instrumental here.
• Knowledge management ensures that knowledge and skills are fostered, deepened, and interconnected.
• The cognitive resources of employees are valuable to a company and strengthen its resilience. Knowledge and skills can be mobilized in times of crisis to quickly develop creative and innovative solutions that guide the company through the crisis.
• Agility is essential for a company to remain nimble. When new rules of the game emerge, an agile company can adapt quickly, for example, to rapidly develop new business models. Agile companies are characterized by a tolerance for failure, a drive for transformation, and a fundamental openness to new ideas. They are capable of driving and successfully managing changes in their own markets, making optimizations, and continuously developing management areas.

Establishing resilience management professionally with experts

THE MAK'ED TEAM supports medium-sized companies in implementing a customized resilience management concept with an experienced, interdisciplinary team. The specific stabilizing and flexibility-enhancing elements focused on depend entirely on the company's individual starting conditions. Whether it is liquidity management, compliance systems, or personnel development: we have the professional expertise to develop a tailored resilience solution for medium-sized companies. Once successfully implemented, resilience management provides the company not only with the foundation to remain resilient and master crises, but also with the best conditions to purposefully execute its transformation processes.

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