Resilience, Sustainability, and the Change Imperative

 

 

 

 

 

"A change is as good as a holiday."

Change is one of those inevitable aspects of life. Some love it, some hate it. No matter how you feel about change, you are going to have to endure it sooner or later.

How an organisation and the people within it react to change has a lot of bearing on an organisation's future. Resilience in the face of inevitable and sometimes hostile change and sustainability within an ever changing environment are more than ever crucial factors for all organisations to tackle if they want to be relevant and remain relevant in our ever changing environment.

Change: Imperative and Inevitable

Organisations do not exist in a vacuum – they never have. Every organisation is exposed at some time or other to changing conditions. The rate of change and the required response time today however, is much accelerated compared to 100 or even 50 years ago. Synonymous with the changing world is the term ‘globalisation’. First used in 1944, ‘globalisation’ was popularised by Theodore Levitt in an article in the Harvard Business Review in the mid 1980s. The premise of globalisation is that scientific advances are accelerating the interconnectivity and interdependence of people, institutions, governments and organisations around the world. The increasing rate in which change has been taking place in all aspects of human life is also a feature of the phenomenon of globalisation, and is both a symptom as well as a cause of globalisation.

A Quick History Lesson

Let’s take a look back in time to illustrate just how change as we experience it has hastened over time. As far back as the dawn of Homo sapiens in present day Africa, humans have been migrating to virtually all corners of the globe. Sophisticated trading systems spanning significant parts of the world go back thousands of years. Among the better known trading routes were the Silk Route, a land based trading route connecting Germanic, Celtic and other European traders with counterparts in China. Other routes facilitated trade between North African states and Babylonia and Assyria as far back as 4000 years.

By the Middle Ages, trade had resulted in the creation of enormous wealth in Genoa, Venice and Florence in Italy. Many of the international commerce and banking terms in use today were invented in Italy during that time. Occupying a strategic location in the Mediterranean, these Italian city states were able to act as trading markets for goods between Europe, and China and India. Trade did not only increase the wealth of trading cities, it also changed the lifestyles of the population. New technologies, medicines, herbs and spices, and new foods gradually became staples of the European population.

These lucrative trading routes were disrupted and eventually severed during the Turkish invasion of Mediterranean Europe. By 1453, Constantinople had fallen to the Ottoman Turks. Apart from being an imperial expansion, the Ottoman invasions were also took the form of Islamic holy war. The resulting hostility between Christian Europe and the invading Muslims spurred European exploration to find a route to India.

European leaders including the King of Spain, the King of Portugal, and the Pope were all interested in finding an alternate sea route to India. The prevailing belief throughout several hundred years in Europe was that Prester John, a descendent of one of the three magi, and his Christian kingdom somewhere in Asia (and then later in Africa), as well as the St Thomas Christians in Asia, would help Europe break through the Islamic blockade. Unfortunately for Europe, Prester John was a mythical figure, so none of the diplomatic letters sent by the Kings and the Pope reached him.

Within a few decades, European efforts began to pay-off. By 1488 Bartholomew Diaz sailed around the Cape of Good Hope at the southern tip of the African continent. In 1492, Christopher Columbus, with Spanish backing, set off to find a sea route to India. Instead he discovered the West Indies, and helped to open up a new world to European powers.

By 1498 Vasco da Gama became the first European explorer to land in India, when he arrived at the port of Calicut. Vasco da Gama had used several African slaves to help him to communicate and obtain assistance to navigate African waters. Language difficulties meant that some Muslim traders mistook him to be a Muslim European, and so they helped guide his small fleet to Ormuz in the Persian Gulf, and eventually to India.

By 1509, the first Portuguese traders arrived at the most important port of the spice trade, Malacca. 1511, the Portuguese had captured the port city of Malacca in Southeast Asia, and imposed a naval blockade of the Straits of Malacca to force all trading vessels to dock at Malacca, thereby gaining a monopoly over the spice trade, and much of the trade between India and China.

As European colonisation of the new world, Asia and Africa began, so emerged the first instances of foreign direct investment, and multinational corporations such as the Dutch East Indies Company (VOC) in 1600, the British East India Company in 1602, and the Hudson Bay Company in 1670. Global business empires were created, that traded in all manner of commodities such as rubber, natural oils, spices, jute, sugar, tin, copper etc. Global trading houses such as Jardine Matheson Holdings established offices all over the world and were the forerunners of modern global corporations such as IBM, Unilever, and ABB.

Let’s look back at those timeframes: It took European powers 45 years from the time of the Islamic invasion and conquest of Constantinople to reach India, and a further 11 years to reach Malacca. In the 1500s, travel by sea relied on seasonal winds, such that it would take months to travel from China to India.

With the industrial revolution in the 18th century, and the advent of steam transportation, travel time between Europe and Asia was cut from months to a matter of weeks.

By the 1850s and 60s, the opening up of the wild West was given a major boost by the building of vast networks of rail in the US. Again, transportation time and costs decreased significantly. The advent of the telegraph meant that information could be sent almost instantly anywhere there were wires.

In 1903, the Wright brothers made history with the first official and successful controlled human flight in ‘the Jefferson Airplane’. The advent of flight further reduced transportation and communication time, such that travel between Europe and Asia could now be undertaken in a matter of days.

Notice that a major impact of technological advances throughout history resulted in more changes and faster changes

Consider other phenomena and events that had global impact:

The Great War, the fall of Tsarist power and the rise of Bolshevism, the creation of the League of Nations, WWII, the creation of the UN, the Suez crisis, the end of colonialism, the failure of many new states in Africa and Asia, the Cuban missile crisis, the space race, the economic rise of post-war Germany and Japan, the cold war, the nuclear arms race, the rise of the Asian tiger economies, the Asian financial meltdown, glasnost, perestroika, and the fall of the Berlin Wall, the emergence of the information economy, global Islamic terror.

The environment has always changed, and will continue to change at an increasing rate. Technological developments such as nanotechnology and web2.0 will further spur on changes.

Organisational Resilience

Organisations that are managed well are more likely to be resilient to any turbulence in the environment, and are also more likely to be sustainable, such that the organisation maintains its relevance into the future, with minimal adverse impact on the environment.

Resilience is a term that is used to mean the ability to resist or recover from some form of disturbance, shock, or trauma. It is used differently in different fields. In physics and engineering, resilience refers to the capacity of a material to absorb energy, and then to have the energy recovered once it is unloaded. In information technology, resilience is the ability of the IT network to maintain an acceptable level of service given faults and difficulties to normal operational conditions. From an organisational perspective, resilience refers to the ability of the organisation to sustain the impact of an interruption and to recover from the interruption so as to continue its operation to at least a certain minimal level.

Organisational Sustainability

Sustainability is a term that was first used in 1712 by a German forestry and timber worker, to describe the capacity to which an ecological system can withstand exploitation by humans. In a contemporary context, sustainability is usually used to discuss practices that minimise the adverse impact of any human activity on the world’s environment. A central idea in the concept of sustainability is the idea of parallel care and respect for people as well as the ecosystem. Sustainability aims to achieve success both for people as well as the environment, so that a ‘win’ for people is also a ‘win’ for the ecosystem. From a business or organisational perspective, sustainability thus also infers the ethical value of corporate social responsibility. It can also be argued that sustainability also entails seeking out wins for both the organisation as well as the external environment in which it operates.

According to the Sustainable Business Institute, sustainability is the ability to meet today's global economic, environmental and social needs without compromising the same opportunity for future generations. The institute defines business sustainability as the opportunity for business to improve its profitability, competitiveness, and market share without compromising resources for future generations.

From a somewhat less altruistic perspective, and from the viewpoint of maintaining organisational relevance into the future, sustainability can be viewed differently but in parallel to its common meaning. In order for organisations and business units to remain relevant to their constituents, the thinking, values and actions of its people, as well as its systems and policies and procedures, need to be considered in relation to the environment in which the organisation operates in. This paradigm shift needs to be led by managers who have a responsibility to develop, lead and manager the internal dynamics of the organisation so that it is in-line with the external environment. Managers need to take into account the following:

• Monitoring and anticipating short and long-term changes
• Researching and analysing the impact of environmental changes on the organisation or individual work unit
• Adopt good professional development and knowledge management practices to strengthen the strategic capacity and resilience of the organisation or work unit
• Periodically review the practices and systems used to ensure relevance

Written by Wai Kiong Chan

Material from this article is taken from Paradigm Infinitum's Strategy Workshops.