Oliver Balch tackles key topics in academic thinking and research on sustainability

If 2016 has taught us anything, it’s the illusionary nature of permanence. Jobs for life, lifetime guarantees, five-year plans: forget it. Tomorrow will not be like today. Business managers, it’s a topsy-turvy world out there. Best believe it, expect it, prepare for it.

Step forward resilience theorists. “Not a month goes by that we don’t see some kind of disturbance to the normal flow of life somewhere,” writes Judith Rodin, a leading light of the movement. Behind her list of immediate surprises (think cyber-attacks, Zika, Trump) lie three unsettling mega-trends: rapid urbanisation, climate change, and globalisation. No doubt others could be added, but the point remains the same: the world feels out of kilter.

First proposed in the 1970s (Holling, 1973), resilience theory has enjoyed a renaissance over recent years. The social science research network boasts more than 200 academic papers on the theme over the last year alone – and that’s just in the fields of economics and sustainability.

Looking back on the year just gone, it’s little wonder. Here is a theory that focuses squarely on the “ability of a system to absorb disturbances and still retain its basic function and structure” (Walker and Salt, 2006). In short, exactly what everyone – from chief executives down to share-price dependent pensioners – wants from the corporate sector right now.

Resilience is not about reinvention or revolution, two common responses to change. It’s about systems thinking, and it’s about persistence. Firstly, systems. Resilience theory owes its origins to scholars of ecology, a fundamental tenet of which is the interdependence of the human and biophysical domains. To cite Folke and friends (2002), sensu amplo, modern man doesn’t run the show. Natural and social systems respond of their own accord, in ways neither linear nor controllable. (Note: don’t mistake uncontrollable for uncontrolled; systems have their own logic and inter-relations; complex and difficult to decipher though these might be).

 John Elkington says resilience theory is how to cope when things go wrong (credit: JP Renaut)

Flexibility endures

Hence, point two: the need to persist. Think of corporations as ships on the choppy waves of an ever-changing, constantly evolving socio-ecological sea. Doomed are managerial efforts to either calm the sea or battle against it. Far better to design your ship and set a course in light of the prevailing conditions. Short-term flexibility (or “absorptive capacity”, as Resistance Theory puts it) is the surest route to a long-term destination.

The greater the capacity of a corporation to self-organise (and thereby shift trajectory when required), the more likely it is to persist and succeed. Self-organisation, in turn, requires businesses to be polycentric (ie not command-and-control) and multi-layered. A second key attribute of the resilient company is its capacity to learn and adapt. The watchwords here are participation and collaboration: to be networked is to be not-caught-out.

The difference between resilient and non-resilient institutions is evident in their respective governance systems. As Umberto Pisano (2014) elucidates, the latter are characterised by, amongst other facets: a focus on fixed targets, model-based management plans, institutional homogeneity and multilevel governance for legitimacy’s sake alone. The resilient company, in contrast, views policies as hypotheses and management as experimentation; promotes diversity as a means to innovation; and orientates its strategies first and foremost with uncertainty and complexity.

   Rapid urbanisation is an unsettling mega-trend (credit: ESB Professionals)

Re-thinking behaviour

So how does resilience theory feed into corporate sustainability management? Two contributions stand out. First is its open-ended nature. Achieving resilience is a never-ending process of adaptation and transformation. To find order in a disordered world requires a constant (yet consistently managed) reordering of thinking and behaviour, policy and practice. Second is the theory’s open-armed essence. To cite a recent PwC report on the subject, “because these [non-financial] risks are difficult to predict, resilience can’t be achieved if risk is managed in silos.”

The two are not synonyms, however. John Elkington, business guru says: sustainability is about wider system conditions; resilience is about how to cope when those conditions go awry. Put differently, resilience is less about fixing the world’s problems and more about learning to live with them. Part of that learning is around visualisation. Whether it is sophisticated data modelling or scenario planning, a resilience mindset can and should make risk management more creative and more robust.

In every crisis hides an opportunity, the saying goes. Resilience theorists have done much to show companies how to keep from sinking beneath the sea or crashing against the rocks. The next challenge is to demonstrate how to ride the crest of the waves, not just survive the storm. To do so will require some flexible thinking. But who better to ask than the prophets of adaptability?

Further Reading

Borsa, L., Frank, P. & H. Doran. 2015. How can resilience prepare companies for environmental and social change? in Resilience: A Journal of Strategy and Risk. London: PWC.

Folke, C., et al. 2002. Resilience and Sustainable Development: Building Adaptive Capacity in a World of Transformations. Ambio. Vol 31 (5): 437-440.

Holling, C.S. 1973. Resilience and Stability of Ecological Systems. Annual Review of Ecology and Systematics. Vol. 4: 1-23.

Pisano, U. 2012. Resilience and Sustainable Development: Theory of resilience, systems thinking and adaptive governance. ESDN Quarterly Report N°26

Rodin, j. 2014. The resilience dividend: Being strong in a world where things go wrong. New York, Public Affairs.

Walker, B. and D. Salt. 2006. Resilience thinking: sustaining ecosystems and people in a changing world. Washington: Island Press.


Oliver Balch  CSR 

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