Companies are increasingly vulnerable to high-impact and low-probability events. The problem is that many companies leave critical risk-management and business-continuity functions to staff and only check in periodically. Without a rigorous process to continuously monitor for threats, staff end up constantly fighting fires – which can flare up anywhere throughout the system – rather than preventing them.
Proactive risk mitigation requires a culture of trust, as well as structure, insight, and collaboration throughout the entire organization. Such an approach embodies robustness because it emphasizes continuous learning and improvement to better prepare the organization for future events.
The pandemic has emphasized the value of robustness. Some countries responded better or faster than others. Those that had recently experienced an outbreak, for example, quickly adopted safety measures like wearing masks, using non-contract greetings, and practicing social distancing, which helped them manage the spread of the virus. Although responses weren’t perfect (the pandemic still spread), these areas were better prepared to handle the health crisis because they used their experience addressing past events to build stronger incident responses for the future. It would be unwise to think that events like current pandemic or impending climate change are black swans. They are not!
Resilience is the ability to bounce back after disruption. Unlike robustness, which is proactive, resilience is reactive, following incidents in which system performance has already been affected. Resiliency is measured in terms of the time a system takes to recover to its original state of performance or better. A sustained or substantial impact, however, can prevent a system from returning to its original state.
Consider the reaction column of a control plan. This column documents practices like alert maintenance and part segregation, but root-cause analysis is not performed until later, through gemba sessions, often resulting in stagnant monthly yields. With resilient operations, an organization reduces the time needed to resolve non-conformances in system so it can bounce back faster.
But the impacts of the pandemic have been both significant and sustained. Business performance has plummeted for months due to the lockdowns. Whether it can return to original levels remains uncertain. Organizations with robust systems may have a better chance of recovery because the impacts they sustained were likely less significant.
Agility is the ability to adapt and implement changes quickly. These changes are often driven by external factors (regulations, customers, technology, mergers and acquisitions) or internal ones (initiatives to innovate, drive new products and services, gain competitive advantage). An enterprise’s agility needs to be balanced so that the system is stable enough to accommodate changes, otherwise it risks creating unnecessary waste, variation, or stressors in system.
In the case of pandemic response, agile organizations likely incorporated new safety measures or ways of working faster than less agile companies, making them more likely to bounce back from disruptions – more resilient.
To adequately prepare for the future, business leaders need strong and balanced approaches, which means prioritizing robustness. Robust systems are resilient systems, but not the other way around. Agility is an essential element of robustness, and should be built into every system so the organization can quickly orchestrate any necessary changes. As an example, knowing the risks of pandemic-type events, companies should have been easily able to deploy remote working arrangements for their employees.
Business leaders can also make digital transformations more sustainable and scalable by promoting a robust mindset in the workforce. Hands-on domain experience, a solid understanding of change-management practices, and digital expertise will bridge the large gap between business and technology. Practical strategies that simplify, clarify, and help people focus towards reaching the vision is the need of the hour.