The Science & Practice for Building Organisation Resilience

• Introduction
• Resilience Defined
• Management Science of Resilience
• Resilience Patterns associated with Levels of Maturity: The Good, the Bad & the Ugly
• Real-World Resilience Study Findings
  • Relating Findings to critical prior research by Burnes (2017) Hamel and Zanini (2018), and Ahlback et al. Mc Kinsey (2017).
• Intrinsic Organisation Resilience
• The Intrinsic and Very Human Threat to Resilience – and its normative Unitary Developmental Theory (UDT) Remedy
• Summary
  • Basic Steps of Building Sustainable Intrinsic Organisation Resilience Using OrgCMF™
• ODTI-DSMT-OrgCMF™: Reference Models & Tools
• References

Introduction

Organizational Resilience is seen as important by both Leaders and Organizational Scientists alike, in terms of planning and preparing for disruption, as well as building capacity to withstand market, system & ecosystem shocks.

Unitary Developmental Theory (UDT) defines the level of an organisation’s Resilience in terms of the increasing capacity to learn constructively, to cope better with all types of increasingly challenging and complex experiences.

Existing approaches and models are weak when it comes to any sort of measurement of Resilience, either suggesting complex formulae with little value for management & professionals, or to treat Resilience as a relative concept, so it’s either ‘better or worse’ than the base line position. Add to this the fact that the ISO Standard 22306 is only a set of ‘Principals & Attributes’, then Leaders, Managers & Professionals are left in a vacuum as regards a ‘Resilience’ measurement scale, and related framework to continuously build intrinsic and sustainable Resilience, and they run the risk of deferring to ‘Cut & Paste’ of ‘Best Practice’ without reference to the learning level and learning capacity of their organisation’s system.

Unitary Developmental Theory encompasses all of the features associated with not only Resilience but also closely related ‘Agility’, and it provides a single normative developmental framework & process ,that allows Managers & Leaders measure their Organisation systems existing Maturity Level, which determines its existing level of Resilience & Agility, and provides calibrated guidance for building Maturity of each of the Organisations System’s Elements though their individual Maturity Building Roadmaps.

The whole approach is operationalised on-line for Leaders, Managers & Professionals through the Organisation Capability Maturity Framework (OrgCMF™) Reference Models, Bodies of Knowledge & Maturity Assessment Tools (www.orgcmf.com).

No other Model or approach except Unitary Developmental Theory (UDT) has such theoretical depth that it applies equally validly, as peer-reviewed, for people, organizations and economies.

A recent 2021 Global Study by ODTI in partnership with researchers from the University of Groningen used the OrgCMF™ diagnostics and found that organizations exhibiting the functionality of the 3 higher Maturity Levels of its 7-Level Model, reported higher Resilience expressed as sustained or improved performance through the Pandemic crisis, while those exhibiting lower-Level functionality deteriorated. In other words, ‘Organisation/Business Resilience in times of Disruption is both Predictable & Actionable through OrgCMF™.’

Resilience Defined

Of the many definitions touted for Resilience, Unitary Developmental Theory (UDT) is most congruent with those that are holistic, and accommodate its higher-Level or Agile response patterns, as in the following first example from a Psychologist for Personal Resilience and then a second one for Organizational Resilience:

“Resilience is the integrated adaptation of physical, mental and spiritual aspects in a set of good or bad circumstances, a coherent sense of self that is able to maintain normative developmental tasks that occur at various stages of life” (Richardson, 2002).

“… the capacity for change before the case for change becomes desperately obvious (Hamel and Valikangas, 2003)

Of course, it will be seen in everything written about Unitary Developmental Theory (UDT) and its application in OrgCMF™, that building Capacity for Change has become an imperative for organisations’ in today’s Volatile Uncertain Complex & Ambiguous (VUCA) environment.

It is argued that in terms of building that change capacity (capability) intrinsically in organizations, existing modelling and operationalization of Resilience has been as limited as that of other concepts such as Agility and Culture, to name a few.

Most recently, Chen et al. (2021) used Factor Analysis in a meta-analytic study to produce a 5-dimensional ‘Resilience’ model focusing on Capital Resilience, Strategic Resilience, Cultural Resilience, Relationship Resilience, and Learning Resilience.

The ISO approach to assessing Resilience Programmes based on ‘Principals & Attributes’ is simply to look for attention to what it sees as the following indicators of Resilience in organizations: Shared Vision and Clarity of Purpose; Understanding and Influencing context; Effective and Empowered Leadership; Culture supportive of Resilience; Shared Information and Knowledge; Availability of Resources; Development and Co-ordination of Management Disciplines; Supporting Continual Improvement and an Ability to Anticipate and Manage Change. ISO gives a very broad license regarding the evaluation of these attributes.

It is often argued that precision in the Science of Organisation Development and the dearth of integrated diagnostic tools that reflect a credible model of system learning and development contribute to the continuing high failure rates of Transformation and Change Programs. Also there is an absence of calibrated development action guidance required to build intrinsic and sustainable Performance, Resilience and achieve some level Agility.

The research over 15 years which brought together several Organisation Science Disciplines (Psychology, Learning, Systems, Management & Economics) produced Unitary Developmental Theory (UDT) which explains with some precision how Human Systems such as Organisation Teams etc. Learn & Develop? How and why they perform and behave at a certain level they may habituate? Operationalised in the Organisation Capability Maturity Framework (OrgCMF™) the Unitary Developmental Theory (UDT) Model & Body of knowledge now allows for comprehensive Assessment and Diagnosis of an Organisations or Teams Capabilities and their respective Maturities and provides calibrated action guidance for each and every specific Capability chosen to be measured, thus assuring sustainable action for change and improvement actions, progressing along the defined and understood development sequence for each individual capability and the system as a whole.

So through UDT & OrgCMF™ Leaders, Managers & Professionals now have access to knowledge and tools to define and address Resilience Building (& Agility). Thus, improving its capacity to learn constructively, to cope better with all types of increasingly challenging and complex experiences.

Though not the topic of this paper, it useful to highlight an example of other Concepts such as Culture where it is worth pointing out that Culture is one of those Org. Science. concepts that UDT actually re-defines from pitiful definitions around “the way we do things around here” to delineating Cultures as clearly defined Habituated Maturation Stages in a manner that completes the best previous approaches to Culture and then operationalizes Culture Change as a simple Organization-Development exercise (see Myles Sweeney (researchgate.net)).

Management Science of Resilience

Denyer (2017) offers a broad-based summation of research on the subject. Obviously, he emphasises Preparation, Scenario Planning and Robust Process that organizations need to have in order to just keep the ship afloat. DSMT argues that these are quite basic attributes of Resilience and finds that unfortunately, they become the main if not exclusive focus of organizations Habituated at Levels 2 and 4. But Denyer continues to suggest that the more recent research points to Adaptation and Innovation as the best strategies to produce Resilience in times of market disturbance, and these are attributes of Levels 5 and 6 respectively.

Unitary Developmental Theory (UDT) would progress the argument however, that real Resilience is achieved through the newly defined concept of Systemic Leadership of Level 7 and especially the degree of functionality denoted by Regenerative Eco-System through which the organization has the capacity to re-invent itself or at least re-invent critical capabilities such as engaging new partners, new markets, new technologies, new products, etc., as has been seen as winning strategies through the Pandemic crisis. In fairness, Denyer alludes to this when he talks about “creating, inventing and discovering new markets”, but again, Unitary Developmental Theory (UDT) can be seen to bring greater definition in the area and refers to the ability of organizations to re-invent themselves across all Capabilities and with the added fortitude of the rest of the Leadership Level and normatively embedded functionality of all 7 Levels to support it.

As can be easily grasped from Table1 and considering the comprehensive scope of the Capabilities covered by the OrgCMF™ models and tools visible at www.orgcmf.com, it cannot be difficult to accept the assertion that everything that Denyer highlights as important towards building Resilience into an organization throughout his very thorough 42-page paper, is represented in the Phases of development for organizations through OrgCMF™ across their Critical Capabilities. This can surely be gleaned from the brief Tables that offer basic descriptions of characteristics or the different Levels in organizational functionality. Critically, and uniquely, DSMT shows how organizations (& other systems) Habituate in already-established patterns along the Maturation Hierarchy and in fact this is what transforms, re-defines and re-operationalizes the problematic issue of Culture as alluded to earlier but each of the 10 types of Culture delineated by Schwartz (2004) maps onto the Unitary Developmental Theory (UDT) Phases and in the ascending order of contribution to returns found by Linan (2014). So, while higher UDT Maturity is linked with greater returns, it is also linked with greater Resilience; but critically, what Unitary Developmental Theory (UDT) does is to align everything within a normative systemic learning process, to build the added-value combination of Resilience and Agility in an intrinsic & sustainable manner. As can be seen from the Tables, the earlier Phases are all about building Resilience in terms of organizational cohesion, competence and process, Phases 5a, 6a and 7b are primarily about Agility with supporting Resilience supplied by Phases 5b, 6b and 7a.

It is important to note that – as outlined in other OrgCMF™ papers in great detail – the features of the most Agile organizations as detailed by e.g., Hamel and Zanini (2017), map into the UDT systemic process as well. Also, of course, not only does UDT organize critical features into a developmental process, it also adds Regenerative methodology to thwart the quite natural and ever-present tendencies in human systems towards degradation of both of these features, through the newly-defined process of Inversion that plagues a high percentage of organizations. This is expressed in Resilience patterns, because although this is not dealt with in research papers, in the real world, organizations build or learn Resilience into their system in many different ways that are both good and bad, but they map diagnostically onto the Maturity hierarchy, as captured in Table 2 with some explanation offered in the following paragraphs.

Resilience Patterns associated with Levels of Maturity: The Good, the Bad & the Ugly

1a Organizations and Capabilities simply get aggressive and demanding.

1b Organizations are e.g., too far behind the Curve, traumatized, disconnected, etc., and fold quite easily.

1c Organisations over-analyse and either lose touch or seek shelter in some arrangement that can lead to dependency.

1a, 1b & 1c are the expressions of the 3 Habituation patterns of the Inversion Zone, and DSMT prescribes that these Patterns of Response to Adversity – and those of all higher Levels – are predictable from diagnosing prevailing functionality in the system through the model. As with all of the above patterns associated with the lowest Habituated Levels of Maturity, the developmental expression of the above Habituations should be built into the system, so that e.g., 1a circumstances may arise when Aggression or the application of Pressure is the right course of action; 1b some unit(s) of the system will have to be sacrificed; 1c Subsidization such as Pandemic Payment or borrowings, etc., will be required; etc., and it is important to have contingency planning and capacity in place for all of the different Levels of response.

2a Organizations will be decisive because of a Critical Singularity such as the Leader, Critical Customer or even the constraints of a critical Technology dictate a course of action and the effectiveness of the response is dependent on e.g., the quality of the Leader, etc., but there is an inherent rigidity in this pattern which is likely to be detrimental to the organization at some point.

2b Organizations will apply great energy from a number of perspectives throwing everything at it and hoping something works but this approach will not succeed all the time.

Fig 1 A typical Maturation Profile showing a middle range of Resilience and Agility across Capabilities

Degradation of response can follow a Stage-by-Stage process rather than Catastrophic Collapse. This is referred to as Graceful Degradation and should apply to organizations that have built in critical features according to the normative process. Some companies achieve this type of Agile Resilience following excellent guiding principles such as Haier in China as detailed by Hamel and Zanini (2018).

Fig 1 provides a diagnostic dashboard that is typical of larger companies that achieve Competitiveness, but the Maturity for Critical Human Capabilities is diagnosed at Level 3 because related Training had been neglected and this undermines Capacity for Change, higher Agility, etc.

3a Organizations will seek a collective harmonious response which is typically slower than ideal.

3b Organizations will have an emotional response pattern that will lead to confusion.

4a Organizations will see trouble as a Learning opportunity and/or have a good deal of training and development done that will help the people and systems to cope.

4b Organizations will have embedded standard Process and Procedure to keep the activities going through the turbulence.

5a Organisations have a capacity for a dynamic response pattern by everyone.

5b Organisations have a dynamic response pattern systemically from people and process and procedure to keep the system adapting to change and maintaining Stakeholder Satisfaction.

6a Organisations have Innovative response pattern through which Individuals and teams act

6b Units of the Organisation system are Autonomous and turn adversity into advantage.

7a Integrative Leadership is reflected in Intrinsic Trust, so that the market looks to the organization to set an example of response to Trouble.

7b Regenerative Leadership means that the system can re-invent itself either in part or in whole in times of crisis, as well as buy its way out of trouble through e.g., M&As.

Fig. 2 is a graphic representation of what the Tables say regarding the degree of Resilience and Agility that is predictable from Maturity Diagnosis. There are some important points to note that are dealt with in greater detail in other publications. For example, there is a considerable degree of Resilience arising from the typical Critical Singularity (Level 2) in organizations which is the Dominant Leader which is most recognizably associated with Groupthink described by Janis (1971), whereby subordinates defer to the will of such Leaders even in defiance of their expertise and even when lives are at stake. As long as the Leader is right, the organizational results will hide the degree of Rigidity that grows within the system which increasingly reflects Linear Thinking and a gravitation to a Bureaucratic Level of effectiveness which with prevailing management practices seems to pan out at average market returns.

The lack of Agility and responsiveness in terms of diffused Leadership and responsibility will cripple the system if there is a shock in the market to compensate when the Critical Singularity which might also be technology, customer, etc. is not the right answer to the changed situation. These effects are detailed in other publications for both companies that folded under such Singularity such as Polaroid (Tripsas and Gavetti, 2004), or those that turned the situation around and prospered such as Intel (Burgelman, 2004). Note also that both Agility and Resilience take a quantum leap with the integration of Autonomous Structures at Level 6b. Thereafter, it is Agility that provides the main added-value source of Resilience in terms of the capacity for Strategic Diversification, Spin-Offs, Network Connectedness, Re-Invention, etc.

Real-World Resilience Study Findings

Any Organisation can identify its current Resilience to Shock by Assessing its Capability Maturity, and can build Agility and Resilience by building its key capabilities and their respective Maturities through the Development Phases to The Higher Levels of Maturity (5-Competitive, 6-Advantage & 7- Leadership).

• Organisations who when self-Assessed measure their Capability Maturity at above Level 4 on a 7 Level Normative Maturity Scale, demonstrate a level of Agility and Resilience that allows them to survive prevailing and anticipated VUCA (Disruption). The higher the Maturity Level, the greater the Resilience & Agility, and the stronger the confidence that people have that they will weather any period of future VUCA.

• Organisations who when self-Assessed measure their Capability Maturity at below Level 4 indicated that their capability Maturity Level and Performance degraded during the recent VUCA period and their confidence to deal with future VUCA was low indicating low resilience and limited Agility.

Larger Organisations are more likely to rate Human Dynamics at the bottom 3 maturity levels with a mean of Maturity Level 2 for approximately 55% of this population (30% of total participant population). Though perhaps it is not surprising that Emotion, Cognition, Personal and Interpersonal Dynamics are lower for large organisations; however, a mean Maturity at Level 2 (Critical) suggests some significant risk factors exist for these organisations.

• Larger Organisations should as a minimum complete Triage Level Assessment on the 4 Human Dynamics

• For those organisations that are aware of potential shortfalls in the Human Dynamics then Diagnostic Level Assessment on some or all 21 related Critical Capabilities would be enlightening.

Self-awareness amongst the top levels of management Our 2021 Survey found that top layers of management are likely see the Organisation in a more positive light than people from the lower levels of the system. Consequently, an organization’s Resilience and Agility may not be as good as they might have expected. Again, an objective Assessment is recommended to start what would seem to be very necessary conversations.

Relating Findings to critical prior research by Burnes (2017) Hamel and Zanini (2018), and Ahlback et al. Mc Kinsey (2017).

• 51% of Organisations are trapped at Maturity Level 3 or below. DSMT is very clear that there is little or no Traction at these Levels for any constructive change or developmental initiatives, thus explaining a significant contributor to the High Change Failure rates (75%+ Burnes 2017, pp. x-xiv). Our 2021 survey returned a figure of 35% trapped at these lower Levels of Functionality

• 27% of organisations reach Maturity Level 4-Operational (Often referred to as Bureaucratic) and fail to progress to higher levels.

• Only 22% of Organisations achieve Level 5 and above with Agility Premium averaging 300% compared to sectoral averages. Our 2021 survey also found that the majority of organizations failed to achieve any of DSMT’s three normative Levels of Agility despite their associated higher Returns.

Intrinsic Organisation Resilience

Intrinsic Organisation resilience building is a process of Organisation Learning & Development. As opposed to ‘Cut & Pasting’ ‘Best Practice’ which has inherent risk of failure, we now build the Organisation Systems internally through the phases of Development defined in Dynamic Systems Maturity Theory as applied in the Organisation Capability Maturity Framework’s 7-level normative Maturity Model. This will assure sustainable traction in the actions taken to build Organisation Resilience.

What we now know from both research and practice is that there is a direct relationship between the Maturity Level of either an Organisation as a whole, a Team, any Function or Capability, and its level of Resilience to disruption.

We also know that if an Organisation, Team, Function or Capability measures at Maturity Level 3 or below, it has limited or no resilience so the Target Maturity Level must be a minimum of Level 4 (Operational) or above, otherwise performance will degrade quite quickly in times of Disruption and Dynamic Change.

We also know that at Maturity Level 5 (Competitive) and above, there is a level of intrinsic Resilience within the System (Organisation, Team, Function or Capability), and that the higher the maturity, the greater the level of Organisation Agility with its Dynamic Learning, Customer-Care Culture, (5); Innovation, Autonomous Structures (6); and ideally, Regenerative Eco-System (7); etc., and increased potential to exploit any Disruption or Dynamic environment.

The Intrinsic and Very Human Threat to Resilience – and its normative Unitary Developmental Theory (UDT) Remedy

Higher Levels of Culture/Maturity offer a system with greater prospect of Sustainability, but it is always under threat from within from Inversion typically being led by Inverted people who have e.g., a negative world view and exploitative agenda which Clive Boddy defined as Corporate Psychopathy.

The Egocentricity involved is present in everyone and every human system, especially as it accumulates power and influence, there is a gravitational pull to become more Self-Reliant and neglect to refresh itself from external sources.

Lower Levels of Culture have limited intrinsic Sustainability, but their fatal threat is external shock whether from more Agile competition or an externally inflicted trauma such as a natural disaster, for which it has insufficient Agility to negotiate.

The only protection from Inversion is offered by the Regenerative process described in relation to the Regenerative Leadership Phase, but should be carried out by all organizations to the best of their ability regardless of their Functional Maturity.

While external Regenerative Leadership relates to M&As, Spin-Offs and other forms of Diversification, the internal process is about running Critical Capabilities through the Unitary Developmental Theory (UDT) process on a regular basis using the OrgCMF™ – Scanning for external Disruptions and internal Inversions relative to Strategic Requirements (1a), Disconnecting or planning to disconnect whatever resources, processes, etc., are deemed to be hindering progress; (1b); Scanning for alternatives and planning roll-out through the Phases (1c); etc. Only by refreshing itself, ideally in accordance with DSMT, can an organization sustain its Resilience.

Summary

Failure rates for Change and Development initiatives averaging 75% since the VUCA environment arrived in the 1960s show that many prevailing approaches to Management are out of touch with what organizations need to prosper in the 2020s. Unitary Developmental Theory (UDT) is part of a refresh process that is reflected in its illumination of what is referred to as the main intrinsic cause of such failure – Culture. The same applies to Resilience, and only the UDT process can a) diagnose expected Resilience Capacity, b) develop it with normative intrinsic process, c) explain how natural Inversive processes undermine it and d) protect against such degradation; and e) ensure that within an organization’s Resilience there is the required degree of Agility.

Basic Steps of Building Sustainable Intrinsic Organisation Resilience Using OrgCMF™

If you believe it is time to try out such a next-generation approach to optimizing organizational fitness, these are the basic steps to engaging such process:

1. Discuss and Define the Organisation System, Sub-system or Capabilities for consideration as they relate to building intrinsic Resilience. This may include exploring potential VUCA in the Organisations environment and assigning probabilities to assist with Prioritization. (Output is a ‘Problem or Opportunity Statement’)

2. Define & configure the relevant Capabilities whose Maturities should be Assessed to understand the existing levels of resilience, strengths and constraints.

3. Run the Capability Maturity Assessment.

4. Analyse the Assessment Report Results and identify those priority Capabilities that require development towards your agreed target maturity levels.

5. Create and execute a Resilience-Building action plan guided by the Maturity Assessment Report, e.g., note whether the Report stipulates a Next-Phase starting point, or a Radical Turnaround process to build both Resilience and the intrinsic learning process of the system.

6. Periodically re-assess maturity to assure target Resilience goals are being achieved and whether the developmental process needs to be changed to e.g., align with emerging requirements.

ODTI-DSMT-OrgCMF™: Reference Models & Tools

References

Ahlback, K., Fahrbach, C., Muraka, M. and Salo, O. (2017). How to Create an Agile Organization. McKinsey October Bulletin. https://www.mckinsey.com/business-functions/organization/our-insights/how-to-create-an-agile-organization?cid=other-eml-alt-mip-mck-oth-1804&hlkid=cb740e6503604e9795850bcde63b7bc9&hctky=1649573&hdpid=46316da6-dbee-4830-8f79-c420d88dcad4

Boddy, C. (2011). Corporate Psychopaths: Organizational Destroyers. NY: Palgrave.

Burgelman, R. A. (2004). Strategy as Vector and the Inertia of Coevolutionary Lock-in. In M. J. Tushman and Anderson, P. (Eds.). Managing Strategic Innovation and Change: A collection of readings: 577-604. Oxford.

Burnes, B. (2017). Managing Change. UK: Pearson Education.

Chen, R. Xie, Y. and Liu, Y. (2021). Defining, Conceptualizing and Measuring Organizational Resilience: A Multiple Case Study. Sustainability, 13, 2517 https://doi.org/10.3390/su13052517

Denyer, D. (2017). Organizational Resilience: A summary of academic evidence, business insights and new thinking. BSI and Cranfield School of Management. [Organizational Resilience: A summary of academic evidence, business insights and new thinking] (https://www.cranfield.ac.uk/som/case-studies/organizational-resilience-a-summary-of-academic-evidence-business-insights-and-new-thinking)

Hamel, G. and Valikangas, L. (2003). The Quest for Resilience. Harvard Business Review, September. The Quest for Resilience (hbr.org)

Hamel, G. and Zanini, M. (2018). The End of Bureaucracy. Harvard Business Review, Nov-Dec., 50-59. https://hbr.org/2018/11/the-end-of-bureaucracy

ISO 22316: 217 Organization Resilience – Principles and Attributes.

Note: Unitary Developmental Theory (UDT) prior to publication was titled Dynamic Systems Maturity Theory (DSMT); from time to time you may see reference to DSMT , they are one and the same