Disruption seems to be everywhere these days – industries collapsing, storm surges shutting down major urban centers, financial markets imploding, and more. Preventing these calamities would be everyone’s first choice, of course. But in an increasingly complex world, it’s very difficult. “There’s a deepening appreciation that we’re living in a time of increased, intrinsic volatility,” says Andrew Zolli, the Executive Director and curator of PopTech and the co-author (with Ann Marie Healy) of Resilience: Why Things Bounce Back.
Today, says Zolli, it’s become essential for companies (and individuals) “to become more agile – not just in the face of the risks we know, but in the face of the ones we won’t see coming.” He recently shared his thoughts with me about how companies can improve their ability to withstand disruption.
Work on more than one time cycle. If resources are limited, it may seem like the right move to go “all in” on a new product or strategy. But as Karen Firestone recently discussed in the Harvard Business Review, a company without a Plan B puts itself at grave risk of failure. Instead, says Zolli, “work on more than one time cycle at a time – creating value for both the very short-term and long-term.”
Embrace cognitive diversity. The best companies, says Zolli, “have a lot of cognitive diversity – people with the same values, but with different thinking styles.” The goal is for employees to aim toward the same goal, but bring unique insights and ways of looking at problems.
Don’t forget middle management. In our culture, middle managers get a bad rap (indeed, it’s the entire premise of the Dilbert cartoons). But Zolli says to think twice about piling on. “We’ve gutted most institutional middle management,” he says, “but when things go wrong, it’s often people in the middle who determine an organization’s resilience. It’s rarely the square-jawed, visionary CEO, or the street activist that makes things work together– the middle gets things done. These folks are not at the top, they’re usually 2 or 3 levels down, but they make a huge difference.”
Build a small bet culture. Want to succeed? Often, companies are advised to double down, bet big, and try to become the next Apple. But Zolli says, alluding to a concept popularized by Peter Sims’ book Little Bets, it’s far wiser to have a “small bet” culture. “Many wins are not on homeruns like the iPod,” he says. “Instead, companies win on singles, and incrementally improving.”
Don’t maximize efficiency. Recent management theory has emphasized greater efficiency and “just in time delivery.” But Zolli says that may put us in an untenably risky position. Alluding to the Japanese tsunami and nuclear disaster, he asks, “Why would Toyota allow their manufacturing to have a single point of failure?” The very success of their lean manufacturing techniques meant they were vulnerable to disruption in a way that their competitor, General Motors, was not.
“There is a correlation between efficiency and fragility,” says Zolli. “We love efficient systems, but for many systems, peak efficiency brings with it peak fragility. Things like carrying insurance, and having redundant systems impose carrying costs on an organization. They make the system less than perfectly efficient, but safer when things go wrong. The tradeoffs are inevitable – it’s just a matter of making the right ones.”
It can be harder, more expensive, and sometimes even counterintuitive to build redundancy into a system – but in the event of disaster or disruption, it can make all the difference. How are you making your company more resilient?
This post originally appeared on the Forbes website on February 28, 2013.
Dorie Clark is CEO of Clark Strategic Communications and the author of Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press, 2013). She is a strategy consultant who has worked with clients including Google, Yale University, and the Ford Foundation. Listen to her podcasts or follow her on Twitter.