Responsive, robust and resilient
Kotler and Caslione (2) address the problem of chaotic or turbulent environments. They suggest that organisations need to plan to be:
• responsive – the ability to react quickly to change
• robust – the ability to withstand stresses and to cope well with change without losing functionality
• resilient – the ability to rebound to a position of success.
Consider human resources management when there is a severe and unexpected turndown in business. HR management would need to be:
• responsive – it might be necessary to block all hiring, to ban overtime, to freeze pay and to make redundancies
• robust – care is needed when choosing who should go so as not to jeopardise functionality; care is also needed to preserve motivation and to try to keep good staff
• resilient – instead of redundancies, it might be better to ask employees to move to shorter working weeks so that valuable talent is not lost for ever. Then, when the economy recovers, the company is ready to bounce back immediately without a delay for recruitment.
Responsiveness, robustness and resilience are really an expansion of the concept of flexibility. It is essential to try to build flexibility into any strategic plan – even in relatively stable conditions. One of the standard criticisms of the rational planning approach is that it lacks or inhibits flexibility (though that is more a criticism of how the plan is used rather than a criticism of planning itself). Examples of building in flexibility include:
• leaving headroom in any financing plan. For example, arranging lines of credit
• having break-clauses or extension options in lease agreements
• building in the ability to upgrade or extend operations
• use of currency options
• buying from a range of suppliers. For example, some companies that relied on just-in-time inventory had problems after the Japanese earthquake because their supplies were quickly exhausted. Now manufacturers try to build flexibility into their supply chains
• stand-by and disaster recovery plans for IT systems
• a mix of permanent and sub-contracting staff
• pilot operations to gain experience in new ventures. If successful the operations can be extended and can make use of experience gained
• joint ventures to spread risk and finance, and to make use of a wide range of expertise.