Resiliency is often spoken of as an important character trait of an individual. A healthy person is expected to be highly resilient. Resilience is the strength and speed of our response to adversity or change. The Oxford Dictionary defines resilience as “the capacity to recover quickly from difficulties; toughness.”

There is a similar concept of organizational resilience that can apply to business strategy. This organizational or corporate resilience is the strength and speed with which an organization is able to respond to changes in the competitive or market environment or other events that might affect the health and well-being of the firm. These changes could be technology-driven changes, economic changes, changes in the competitive landscape, or anything else that might affect the organization’s ability to compete effectively. Some examples of the types of adversity that organizations might face could be a decision by a major customer to vertically integrate the product that the organization supplies, the entrance of a new and powerful competitor, a technology that makes the organization’s product obsolete, or a decision by a customer to move production or sourcing off-shore. Other types of adversity could include a fire that damages production capability or the death of a key member of the organization. Resiliency includes both the ability to foresee or prepare for possible adverse situations and to respond and recover when they do happen.

Part of the strategic planning process should include a risk assessment. The thought process for this assessment is to consider the various potential risks and the likelihood of occurrence. For the highest potential risks or those with the greatest potential impact on the viability of the organization, the planning process should give some thought to either contingency plans or implementing actions beforehand that mitigate any potential impact of the higher-risk potential adversities.

Strategic planning should lay out a course of action and allocate resources to improve the organization’s ability to compete. As such, strategy and the strategic planning process provide focus. Yet, the need for resiliency requires that the organization sometimes explores or experiments with other potential strategies, business models, or courses of action. It is not inconsistent, in fact it is wise, to explore alternatives that might unfold into the future, either because of a change in the environment or due to the discovery of a strategic path that generates higher value. The bottom line: an organization, like an individual, cannot be complacent but must be taking in and processing information and considering the impact and the alternatives in a changing world.

Is your organization working to build its resilience?