Resilience - time to add a new word to your vocabulary

March 14th, 2016
Recent times has brought new words to our present day organizational vocabulary. To mention a few CSR, Corporate Social Responsibility; HSSQE (a term with many abbreviations), Health Security Safety Quality Environment; Risk Management, Human Resources Management (and Development),… The list is long.

And now I tell you it’s time to open your dictionary and add a new one: Resilience [ri’zilliens(i)] - stemming from the times when the Romans ruled a large part of the world.

But what is ”resilience”?

You can look at resilience from an individual, organizational or community perspective. And basically, the word describes your ability to emerge strengthened from a period of disruption.

This is not just your ability to recover from a setback - but if you are resilient, you end up with better cards on your hand than before.

A few examples:
·      Individual: A resilient person uses a loss of job to actually do what she has previously only dreamt of.
·      Organizational: A resilient company uses a downturn in one of its core markets to see new possibilities in other markets using its innovative processes.
·      Community: A resilient community emerges of a natural disaster as a strengthened community.

In other words, resilience is not just another word for risk management - protecting status quo. Resilience is more than that. It looks forward. It sees opportunities. And in the end, it increases the odds for survival. Drastically.

Captain - I spotted a few echoes on the radar

Captain - I spotted a few echoes on the radar

An organizational approach to resilience

Building up your company’s resilience score? You need 3 elements:
- A radar, use it to look at the future, scanning the megatrends
- Innovation, be proactive and grab new possibilities arising
- The sword, manage your risk plan and repair

Companies need to be on the lookout for new disruptors on the horizon. You should be reminded that you can seldom use history to predict the future. Was the management of Blockbuster using their radar when young upcoming company Netflix contacted them with an offer to cooperate? Probably not.

Resilience in our industry - a few things to think about

Will our industry need to be resilient? Well - you would say - we have enough in our risk management plans. ”We have looked at the market drivers, talked to a number of analysts, we expect supply to go up (or down), we know how many vessels are on order, how many will be scrapped…” and so on. So based on this information you know which basket to put your eggs, you know if you should invest or not. I bet Nokia also had risk management in place, and Blockbuster? Or EAC (ØK). They just weren't lucky. Instead other companies were lucky - but not necessarily resilient.

The question is: Are we prepared for what might come? Are we adaptable to something new (we don’t know what - we are just prepared)? Are we on the lookout for possibilities? If your answer is yes - you are increasing your resilience score.

Aberdeen - low oil prices

Aberdeen - low oil prices

Then give the following headlines a thought:
·      ”Newly delivered offshore vessels laid up”, wrote Shipping Watch 16th of October 2015. And since the situation has only worsened
·      ”If the low bulk rates continue most bulk companies will go bankrupt”, Shipping Watch 18th of January 2016
·      ”Swire Pacific Offshore slumps to $165m full-year loss”, TradeWinds 11th of March 2016

Are shipping companies resilient? Is our industry?

We are dependant of a lot of factors - and we are guided by analysts and gut feeling. Same as guided us in 2007 when all were busy filling up newbuilding order books.

Maybe we should start asking ourselves if we are resilient? Will my company - or our industry be the next target for disruption?

Take a look at some of these megatrends, as observed by the Copenhagen Institute for Future Studies, which are appearing on the radar as you give the above questions some thought:
- Immaterilization
- Acceleration and complexity
- Sustainability
- Knowledge society

How will my business look in 5 years (or in 2 years)?

Would you answer: "I don’t know - but I am prepared for something exciting, and I want to be part of it"?

Wonder what questions the management of Eastman Kodak asked themselves: "Are we resilient?", "is our radar turned on?"

We sell Kodak film

We sell Kodak film

Mikkel Hansen, CEO

Sources and inspiration:
Centre for Future Studies, ”Resiliens i det 21. århundrede”, February 2016

Nassim Nicholas Taleb, ”The Black Swan”, 2007