Corporate Resilience Scorecard 4 Innovation

Corporate resilience determines whether the company is able to effectively leverage feedback mechanisms (including raw data), internal assets & competencies, strategies, and human resources to respond to opportunities, changes, and (perceived) threats in the environment. It influences if a company is able to achieve & sustain a competitive advantage. As a result, Corporate Resilience is a Competitive Advantage that can differentiate industry laggards from industry leaders.

When corporate resilience is targeted as a competitive strategic imperative terms such as “business development”, “sales goals”, “business growth”, or
“product development” is often used. What each of these targets requires is corporate agility, responsiveness to changing customer requirements, relevant and targeted information, and the ability to update existing tooling, processes, and best practices to better meet changing stakeholder needs. Unfortunately, these secondary competencies and strategic assets are less readily embraced within the corporate lexicon with rigid and predictable consequences.

Setting the Foundation

Corporate resilience requires more than delivering more and more products and services. It’s about owning the competencies, tools, processes, information, and other strategic assets needed to keep stakeholders, customers, and employees engaged. It requires a fully integrated and adaptive business model that acknowledges and builds upon the inherent linkages between corporate resilience, profitability, quality, and innovation.

The following essay discusses a few of the more common models used to support innovation, creativity, and resilience. Unfortunately, many of these are executed poorly. This essay will attempt to briefly highlight why this is the case. Suggestions are made at the end of the essay for strengthening corporate resiliency and improving the company’s competitive advantage.

Resilience in Business

Resilience theory explores why some individuals (and companies) are able to adapt and bounce back despite encountering many hardships whereas others experience deteriorating performance, morale, and impact. This research explores what skills, resources, and tools are used to strengthen resilience. The findings are then used to inform strategies for working with individuals, communities, and companies (the latter a recent application).

When seeking to strengthen resilience (and corporate agility) the question often missed is whether resilience is available to everyone despite varying contexts (Maslow’s Hierarchy of Needs), or whether a foundation needs to exist in order to achieve resilience (Herzberg’s Hygiene Factors)? If a foundation is required than what are the skills, resources, tools, and assets needed to begin building resilience?

Resiliency theory can also be extended to governments, cities, and corporations to help evaluate economy drivers, business models, and policy options for driving economic, business, and social resiliency. The smallest unit of influence is the individual, but the interconnection between the individual and surrounding systems still needs to be explored further. Identifying and understanding these linkages is crucial if the quality of these relationships, and their objectives, is to be sustained.

Limitations of Resilience in Practice

An argument against how the theory is currently applied in practice is that expecting resilience in every context is to misunderstand the research. That understanding what strengthens resilience for one group is not the same as understanding what limits resilience for another. That resilience is not equally available to every individual, group, or context.

The question of why resilience is not inherently equal for all individuals, groups, and contexts is partially answered at the individual and systemic levels. What evades discussion is how do systems contribute or limit resilience. The question becomes not why individual resilience differs but how different systems contribute to different responses in what would appear to be shared contexts?

This argument against a ‘one size fits all’ application of resilience theory proposes that it should not be expected in every situation. That the system has more influence than the individual in determining resilience. Instead of expecting resilience in most (if not all) situations, resilience should be expected to deteriorate under certain circumstances.

In contrast to how the model is often applied, resiliency theory needs to be analyzed at both the individual and systemic levels in order to better understand linkages as well as identify effective public and private policy to effect sustainable improvements. The pros & cons of a ‘one size fit all’ resilience model need to be considered carefully when designing interventions.

With teams, for example, resilience in the face of unethical decision making, ineffective processes, low-quality resources, unavailable training and tools, and inadequate leadership can lead to low quality, productivity, efficiency, and customer satisfaction. Some groups will accept these conditions whereas others will strike and seek to unionize or boycott a company. The intervention that results from analyzing this situation will depend on whether one blames the individual or expands the analysis to account for public and private systems.

The challenge created by moralizing individual resilience, when determining ‘good fit,’ is realized in the policies and strategies that are then suggested. These often target the individual instead of group, context, and institutional barriers that limited the development of resilience within that specific context in the first place.

Reinforcing Continuous Improvement

A new theory of resilience emphasizes not just pushing through hardship and scarce resources, it is also about enduring stress, learning, challenges to the status quo, and sustaining change despite facing multi-systemic barriers. It focuses on the interdependency between the individual, policy, and systems in its identification, evaluation, and implementation of strategies seeking improvement.

When combined with change theory, the study of individual and systemic resilience is recognized as an asset for undergoing self-reflection, learning from past mistakes, testing and improving on existing products & services, and supporting continuous improvement at both the individual and systems levels. Resilience is now less about expelling (or ignoring) those who buckle under unhealthy pressures and more about pulling together shared knowledge & experience in the pursuit of quality across systems.

The goal is to recognize when the current environment is ‘fit for purpose’ or needs to undergo significant change or transformation to achieve relevance, sustainability, quality, and socio-economic resilience. This is less about maintaining the status quo and more about supporting continuous improvement, innovation, and change.

Virtue Signalling in Business

Change management and continuous improvement require a sense of urgency in order to sustain. Without the business case to justify change the environment is more likely to resist alterations to the status quo. The status-quo maintains system-level barriers to achieving resilience. Language supporting the status quo needs to change if a paradigm shift is to occur.

Unfortunately, many of us, including corporations, talk about quality, value, innovation, and customer satisfaction remain disconnected from effective public policy, strategy, and evaluation mechanisms. This weakness is made worse as society increasingly emphasizes value-based statements and optics over critical analysis.

Virtue Signalling represents the language and stories used for telling ourselves, stakeholders, and customers that our products & services deliver better values because of x,y,z. That our process, values, relationships, strategies, and approach are aligned with the loftiest of values expected by stakeholders, employees, and customers. The argument extends to not just statements of one’s virtue but also of one’s products & services value proposition, corporate ethics, social impact, and sustainability.

Singing to the Choir

The vulnerability of virtue signaling is similar to the vulnerabilities found in the resilience model. The company can ‘sing to the choir’ about shared values, norms, and assumptions all day but this will not improve the team’s ability to pursue continuous improvement or dominate the industry with an undeniable competitive advantage.

Resilience theory is often used to support the status quo and expel disruptions. Virtue Signalling is similarly more often about praising one’s own ‘belief system,’ or speaking to an existing ‘captured market,’ than it is about effectively evaluating OR executing on product and service requirements or innovations.

Customer requirements change. This requires companies to be able to leverage internal dialogue that resists the status quo and challenges the company’s dependence on outdated legacy models, tools, and practices. The question that arises is why is this often so hard to do?

Diversity in Business

How diversity initiatives are defined and evaluated is influenced by oversimplified models that emphasize optics over execution. Models of diversity that extend beyond regulatory requirements seek to leverage the perspectives and experiences of a diverse workforce. These perspectives are considered critical for proactively anticipating and understanding communities, market niches, and identify solutions & services that will be viewed as relevant and useful.

Harnessing diversity can disrupt the status quo which is why such initiatives to tap internally diverse perspectives often follows a structured and programmatic approach. Feedback is solicited quarterly, annually, with pre-scripted survey questions, and evaluated behind closed doors. Outputs are representative of the process, which is visibly structured, narrowed, and prioritized.

Filtered Diversity

Captured markets and customers will continue to purchase existing products and services as long as there are no other alternatives. This is less a decision based on quality than it is about availability (and price). Larger markets and customer groups are served more readily than smaller ones. The motive is profit.

Although diversification of products & service offerings is considered essential to remaining profitable and sustainable (in a changing marketplace), this is less about the impact and more about scalability.

Diversity of feedback, and its outputs, is structured and prioritized based on profit-based priorities. How can we expect companies to improve internal workforce diversity and external product/ service diversity, when the framework used to gather, evaluated, and report on feedback is pre-scripted?

Emotional Intelligence in Business

How EI initiatives are also defined and evaluated is influenced by oversimplified models that emphasize optics over execution. Emotional intelligence is directly related to resilience and diversity management. It involves understanding and empathizing with others, using this information to inform and guide best practices/ next steps, and increasing the group’s ability to use information & feedback to continuously improve. Teams that are unable to share information, communicate, and learn from one another are also unable to perform well together.

Strategic EI

But what is often misunderstood is that emotional intelligence is not about telling people what they want to hear. Its also about finding productive and empathetic ways to share information that people and companies need to hear. This is no fine distinction. Its a big deal, and not always easy to achieve. It requires, among other things, trust and the right corporate culture.

But EI can also be used to ‘game the system.’ To manipulate others. To identify the path of least resistance for getting what you want, which includes turning down projects that should be approved or getting people fired who could continue providing value to the team. Low EI can also be used to justify terminating ‘an asset’, project, or ‘idea’ because someone is triggered. The crucial point here is that diversity management, emotional intelligence, and inclusion (next section) are not the same thing. Managed poorly, these can be more destructive than productive.

Inclusion in Business

How inclusion initiatives are also defined and evaluated is influenced by oversimplified models that emphasize optics over execution. The weaknesses of the diversity (and diversification) and emotional intelligence models can be addressed with the inclusion model. The inclusion model steps beyond just soliciting feedback in setting the expectation that these diverse perspectives, and abilities, will be leveraged to design, evaluate, test, and deliver new products & services.

Profitability remains a central motive (even for nonprofits), but the model acknowledges that the product and service designs delivered will be more relevant, value-driven, useful, and customer solution-focused.

Legacy Barriers to Inclusion

But diversity and inclusion face similar barriers. Pedagogical assumptions about what tools, processes, models, education, training, experience, features, and licenses (etc.) are needed will continue to limit the positive contributions of diversity and inclusion until corporate change resilience becomes a normative expectation of all industries and companies.

The above case example breaks free from outdated nonprofit norms with its attempt to use data to drive decisions, test hypotheses quickly, and learn from past mistakes.

Attempts to support effective-resilience, effective-diversity management, and effective-inclusion deserve acknowledgment but should not be celebrated prematurely. A company signaling that they have these ‘initiatives in place’ does not require that it is done effectively, benefits stakeholders, or has the desired impact. But should it?

Corporate Change Resilience as ‘Fit for Purpose’

Effective change management is dependent on the resilience of the corporate culture. Since most corporate cultures reinforce homogeneity more then heterogeneity the question arises concerning best practices for strengthening corporate change resilience and the culture’s ‘fit for purpose’?

The fit for purpose is an Agile Model concept that recognizes that product & service design can not be infinitely perfected without its complexity, costs, and sustainability becoming near impossible to sustain. The question of purpose, in this context, is often oversimplified in its focus on the individual user that is self-selected and has the resources (or funds) to acquire the product or service. But if this model (fit for purpose) is applied to society the discussion becomes much more interesting.

Applied at the society level, the product/service offering begins as a minimum viable design. It focuses on specific individuals, customers, and a limited set of user scenarios. But as more use cases (and profit opportunities) are realized the feature set, training, and support modules attached to the product/service are expanded.

The internal & external competencies, resources, and tools needed to adapt existing product/service offerings is vast. Leaving companies some companies in the past and others charging forward to pave the way to the future. What differentiates laggards from leaders is their focus on excellence, and willingness to address the individual, group, and systemic level barriers that might interfere.

The support of an effective model of corporate resilience is not for the faint of heart. It requires courage, authority, resources, rime, and commitment. Corporate resilience is a continuous improvement initiative. It is ongoing. It requires flexibility. It requires patience. It requires an openness to learning and change. And it requires executive support.

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The key to the effective execution of these competencies is a structured and data-driven approach. A generic corporate resilience scorecard is provided below.

Corporate Resilience Roadmap

The innovation training roadmap is just one tool available for strengthening corporate resilience. It involves audits to evaluate gaps within the company’s innovation stack, diversity management plan, inclusion management plan, and additional tools, processes, and policies. The strategies suggested depends on the findings of the audit.

An evaluation of corporate resilience is not isolated to social metrics. It also involves profitability measures as well. Nonprofits and For-Profit companies continue to ignore readily available feedback and miss opportunities to improve their existing products, services, and processes. Until we become more comfortable challenging existing and often ‘sacred’ assumptions, readily available & accessible improvements will remain to be viewed as ‘out of reach’.

Corporate Resilience Scorecard

Innovation requires Corporate Resilience. Without it, opportunities to learn from our customers, stakeholders, and employees will be lost. Corporate resilience is about more than just comfortability with change. It’s about being comfortable making effective and data-driven/informed changes that better serve everyone invested in the company’s performance.

A documentation and planning tool is provided below to help begin your team’s discussion. This generic tool provides several questions to compare current vs. the company’s desired future state. Refer to research or your Innovate Vancouver consultant to benchmark your responses and identify areas for improvement. 

Is your company working on a transformation project? Initiatives to strengthen corporate resilience? Contact Innovate Vancouver to help on your next project!