I was just in a Gartner Research Board meeting talking about the situation in Ukraine, which brought on conversations about interest rate hikes, cyber attacks and other unpredictable events. The community agreed that risk in increasing, and the second- and third-order effects of greater volatility will need close scrutiny by executive leaders and boards.
So what’s a company — what’s a board — to do? Should we jump at every cyber-attack warning and every difficult headline? Or perhaps we should think about how to make the unpredictable, predictable by building a resilient company. What would that look like?
I came to Silicon Valley many years ago to work for one of the first Kleiner Perkins startups: Tandem Computers. Tandem built NonStop computers. The basic architecture assumed unpredictable hardware and software faults would occur and focused instead on how to recover quickly and predictably. We built a resilient product. Today every company is subject to cyber attacks. Perhaps rather than trying to prevent these unpredictable attacks we should focus more on how to recover quickly and predictably.
Over the past 40 years, psychologists have studied resilience in people. Resilience is the ability to withstand adversity and bounce back from unpredictable and difficult life events. Some people equate resilience with mental toughness, but demonstrating resilience includes working through and recovering from emotional pain and suffering. Psychologists continue to search for resilience factors at the individual, family, community and cultural levels. As parents we strive to build resilient kids. As corporations, we should strive to build resilient employees.
The COVID crisis, another unpredictable fault, may have had a silver lining. A recent study by BlackRock notes companies with strong sustainability profiles performed better during the crisis than their peers and were better positioned to weather adverse conditions in the future. “We believe that the outperformance has instead been driven by a range of material sustainability characteristics, including job satisfaction of employees, the strength of customer relations, and the effectiveness of the company’s board. Overall, this period of market turbulence and economic uncertainty has further reinforced our conviction that ESG characteristics indicate resilience during market downturns”.
The world is likely to become more unpredictable, not less. In your next group meeting, executive staff meeting or board meeting ask the question: Are we building more resilient products, people and enterprises?