Small businesses in particular have been badly hit by the drop in trade associated with coronavirus pandemic, especially in the service sectors. Nonetheless, some have been agile enough to adapt, transform and thrive. Much has been written by psychologists about what constitutes resilience at a personal level. But what about resilience at an organisation level?
Why is it that some organisations sink without trace when the going gets tough? Any why is it that some survive and thrive? There are three key ways in which a management team can build resilience in the face of external and internal threats to the organisation.
1. Standard work. Each area of the business needs to understand the ‘one best way’ of running processes. The one best way is developed by the team that runs the process. This means knowing what best practice actually is, even if the best practice exists outside the organisation and even outside the sector. It may seem counterintuitive that standardising processes actually builds resilience. Surely that restricts options for creativity? Not at all. The approach to standard work guarantees lower variability, higher and consistent quality of output, and a lower cost of operation over time. This enables margin growth and thus resilience to price fluctuations in the marketplace.
2. Cross training. In parallel with the idea of standard work implementation is the practice of cross training team members. All team members have a career development path that enables them to become proficient in process management in a number of different areas. This builds organisation resilience in the event of staff shortages due to planned absence on holiday leave, or unplanned absence due to illness etc. It also enables the organisation to re-deploy team members when catering for market fluctuations in product or service demand. And by ‘team members’ I don’t mean just operators and entry level staff. I mean all levels of the organisation. A strong and resilient management team is built with people who have both deep and broad knowledge of the business.
3. Teamwork. Standard work and cross training are two parallel pillars to building resilience in the organisation. They are deliberate planned interventions by management to build not only resilience, but also a well trained and motivated work force. All of this requires teamwork. Too often in traditional organisations, managers believe the team is made up of the group of people who report to them e.g. operators on the shop floor, or nurses on a ward. This is true, but only a small part of team profiling. Managers themselves are also part of the team, in more than just name, and they serve the team that reports to them. This is beautifully illustrated in the response of the Toyota motor company to the worldwide recession from 2008 onwards.
‘In 2007-2008 car sales in the USA plummeted by almost 40%. However that did not stop Toyota from taking care of its team of employees. In a 2011 interview with Will James, President of the Georgetown plant in Kentucky, had this to say.
“During the worst economic downturn since the Great Depression, we kept every one of our regular U.S. manufacturing team members employed, even as global auto sales plummeted,” James said. “Instead of layoffs, we protected employees by adjusting production.”
And during production lulls, Toyota kept employees busy by offering additional training, devoting time to continuous-improvement projects and providing them paid time off to volunteer in the community, James said.
“We also used the downtime for environmental, OSHA [Occupational Safety and Health Administration] and diversity training as well as improving problem-solving skills and standardized work,” James said.
….. James asserted that Toyota offers “unprecedented job security, even in difficult times.” ‘
Source: James, W., Staying True to the Toyota Way During the Recession, (The Economy) 2011
At the same time, General Motors and Chrysler, who were teetering on the brink of bankruptcy, were saved by a bailout form the USA government. Since 2008 Toyota has been in the top 3 automotive sales worldwide. In 2020 it overtook the Volkswagen group top spot in worldwide vehicle sales. That in a time of car sales drop due to the pandemic. Now that’s resilience!
If you would like information on building organisation resilience, please feel free to contact me.
Bernie Rushe, BSc, CPIM, Dip SA, MSc, Black Belt