A balancing act between stability and flexibility: resilient companies

The mid market is in permanent crisis mode. That is why many mid sized companies face a more pressing question than ever: how can we set up our organisation so that it is immune to external disruption and comes through crises unharmed? How can the company grow and develop even in a volatile environment? That takes resilience.

Resilience as an elementary building block of company strategy

Resilience in organisations is a complex field and reaches into every area of the business. What characterises a resilient company? On the one hand it is stable and robust enough to withstand and survive crises. On the other it is flexible enough to react quickly to change and adapt accordingly. Where necessary it carries out the transformation processes needed to overcome the crisis or the shock, without giving up its identity. A resilient company is able to recognise both the risks and the opportunities in latent and abrupt crises and in the face of danger, and at best to emerge from the crisis stronger. And of course a company's resilience also allows it to seize opportunities purposefully in normal times.

What does an individual resilience profile look like?

First of all: there is no blanket resilience profile for mid sized companies. There are very different academic approaches to developing one. Resilience is also the subject of industry standards, such as ISO 22316:2017. It defines key components so that resilience can be identified, implemented and monitored in the organisation, and sets out guidelines for improving resilience in companies. But everything is always a question of time, staff and cost as well. What a company needs in order to become more resilient depends on many individual factors. Resilient companies are not only about fending off crisis and standing firm in dynamic times. Above all it is about the ability to adapt and the power to innovate. That requires future ready processes and secure, transparent structures at various levels of the business. In principle, successful resilience management is characterised by a mix of stability and flexibility adapted to the company. While stability plays an outstanding role in larger companies, smaller ones show their strengths in a crisis above all through flat hierarchies, great agility, fast reactions and a high degree of adaptability and capacity to change.

How is resilience management put into practice?

Securing stability in the company:

• A reliable network of partners and suppliers and well maintained relationships make a company more robust.
• Strong company leadership that acts confidently and effectively has a positive effect on the entire ecosystem and brings the conditions needed to lead the company successfully through crises.
• Transparency in all areas of the business is a basic requirement, so that the company can see where it stands at any time and react in good time to inconsistencies, deviations or disruptions, whether in liquidity, in supply chains or in HR.
• Focusing on the commercial success of the company secures earnings and liquidity. Both are essential elements of a resilient business, because they open up alternative courses of action.
• A focused strategic direction for the organisation and its business models.
• To assess correctly and to know where your own company stands on the resilience scale, a clear, unfiltered reflection on your own strengths and weaknesses is needed. The company should be able to look at its ecosystem reflectively in order to recognise potential opportunities and crises.
• A positive corporate culture that conveys guiding principles and company goals in an understandable way creates trust, team spirit, engagement and commitment.
• With sufficient financial and material resources, lean periods can be bridged.
• Structures and processes should be adjusted so that calm returns to the organisation.
• Professional compliance management with internal standards and the establishment of an internal control mechanism prevents unlawful behaviour in the company and ensures adherence to rules and regulations. That protects a company from avoidable risks and damage to its image.

Securing flexibility in the company:

• The digital transformation of the working world and the digitalisation of production and supply chains secure speed, efficiency and transparency, all important elements of resilient companies. Digitalisation strengthens robustness at various levels, as the coronavirus crisis also showed. Automated, future ready processes, for instance in HR or liquidity management, make developments transparent, make workflows faster, more efficient and more flexible, and provide an up to date overview. Companies can therefore identify negative developments early and react to them in good time.
• Diversification makes a company more resilient. Setting itself up more broadly, not focusing on a single core business and having several irons in the fire can be a major advantage in disruptive developments. A forward looking company strategy helps to keep the focus on the company goals despite diversification.
• People development can aim specifically at encouraging important qualities such as independence or agility. Decentralising decision processes and authority can also make a company more resilient. A forward looking HR management helps here, using important analytical instruments such as staffing plans, age structure analyses or people development concepts.
• Knowledge management ensures that knowledge and competences are encouraged, deepened and connected.
• Employees' cognitive resources are valuable to a company and strengthen its resilience. Knowledge and competences can be mobilised in times of crisis to develop creative and innovative solutions quickly that lead the company through it.
• Agility in the company is important for staying nimble. When new rules of the game appear, an agile company can adapt quickly, for instance to develop new business models rapidly. Agile companies are characterised by a friendly attitude to mistakes, a drive to transform and a fundamental openness to what is new. They are able to push forward and manage changes in their own markets successfully, to make improvements and to develop areas of management continuously.

Setting up resilience management professionally with experts

With an experienced, interdisciplinary team, THE MAK'ED TEAM accompanies mid sized companies in implementing a tailored resilience management concept. Which stabilising and flexibility enhancing elements are focused on depends entirely on the company's individual starting conditions. Whether liquidity management, a compliance system or people development: we have the professional expertise to develop a precisely fitting resilience solution for mid sized companies. Implemented successfully, resilience management gives the company not only the basis to stay robust and master crises, but also the best conditions for carrying out its transformation processes purposefully.

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