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 | ESSENTIALS FOR LEADERS AND THOSE THEY LEAD | | | If there’s been one trusted antidote to the COVID-19 pandemic—at least from a business perspective—it’s the value of organizational resilience. Resilience is often cited in the context of crisis response, but its true meaning goes deeper: the proactive building of skills and capabilities to sustain people and organizations for the long haul. Developing resilience not only helps optimize functions in key business areas but also strengthens the organization holistically through flexible organizational routines, streamlined decision making, and agile teams. McKinsey research shows that adopting a holistic, cross-functional approach to operational resilience can improve a company’s overall resilience by 30 to 40 percent more than traditional functional optimization does. This week, let’s explore how leaders can boost resilience—for their institutions and themselves—through a cohesive effort. | | | The Kangshung Face of Mount Everest is one of the most remote and arduous routes to the summit. One expedition reached the top safely by changing team behaviors to suit the context. At the start of their ascent, the team stuck to well-established routines designed for normal conditions on the mountain. But when conditions changed, the climbers developed simple rules of thumb (heuristics) to make timely decisions. And in the last, perilous stage of the climb, they improvised. Writing about this adventure in the Harvard Business Review, the authors—one of whom was part of the expedition—suggest that organizations can do the same: train themselves to alter the combination of routines, heuristics, and improvisation to match the requirements of different possible scenarios. This strategy enables leaders to prepare and practice for the unexpected while they have the luxury of time and resources rather than scrambling in an emergency. To design scenarios, try a thought exercise, such as conducting a “premortem” to identify which risks would seriously affect the organization’s core. | | | If there are five frogs on a log and one decides to jump off, how many are left? “The answer is five, because deciding to do something and actually doing it are two different things,” says McKinsey’s Aaron De Smet in this podcast on cutting through the clutter in decision making. “Sometimes you think you’ve made the decision, and you walk out of the room, but a month later, nothing’s happened.” Foot-dragging on decisions doesn’t foster the resilience an organization needs to cope with uncertain and volatile environments. For organizations to achieve decision velocity, a critical first step is to set up a clutter-free decision architecture with a predefined process, discipline, and standardization. | | | Automobile sales in India plunged in the early months of 2020 after the pandemic broke out. But Tata Motors CEO and managing director Guenter Butschek kept steering his company in the right direction, thanks to smart business-continuity planning, inclusive leadership, and a network of agile, nonhierarchical teams. In this interview with McKinsey, he describes his organization’s multifaceted approach to resilience. “[We] used the downtime of India’s nationwide lockdown to rethink, redesign, and reengineer how we work, where possible,” Butschek says. “The way we hardwire changes now will define our future.” | | | | A recent global study identified ten statements that the researchers consider the most reliable indicators for measuring workplace resilience. Respondents agreed that in resilient organizations, senior leaders were one step ahead of events, always did what they said they were going to do, and could be trusted completely. Want these things to be said with you in mind? Work on developing vivid foresight and visible follow-through—which in turn will boost employee and organizational resilience. | | | | | | — Edited by Rama Ramaswami, a senior editor in McKinsey’s Stamford office | | | This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. | | You received this email because you subscribed to the Leading Off newsletter. | | | | Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007 | | | |
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