Learning from Marks & Spencer closures: four ways to build a resilient organisation

Blog posts

1 Jun 2018

Dan Lucy, Principal Research Fellow

With the news that Marks & Spencer, stalwart of the UK High Street, has only just hung on to a position in the FTSE 100, now seems a good time to reflect on the growing importance for organisations to develop cultures of resilience. This is especially true given that Marks & Spencer’s CEO, Steve Rowe, has identified the company’s ‘corporate and inward-looking’ culture as a critical reason behind the current troubles.

Staying in touch with what customers want and what competitors are doing is a key hallmark of resilient organisations. Marks & Spencer is one in a long line of bastions of British business that have either ceased trading or are struggling to keep the wolf from the door, largely as a result of a failure to adapt to changing consumer preferences and ways of doing business.

Organisational resilience is an increasingly desirable yet, some would say, elusive quality. Research by the Economist Intelligence Unit reported that nine out of ten business leaders saw resilience as a priority for their business and eight out of ten saw it as indispensable for business growth. At the same time, only one-third of CEOs were confident that their organisation possessed such resilience. There appears, then, a clear gap between what is desired and the reality for many organisations. Those that can take steps to bridge this gap are likely to reap substantive rewards. Not only are organisations with resilient cultures more likely to stay in business whilst consumer preferences, technology, and demographics all change; research has also demonstrated that they are more likely to have better cash flow, profitability and return-on-investment.

Resilience has traditionally been associated with risk management and business continuity planning. In essence, defensive activities designed to enable the business to keep running when crisis hits. Over time, as the world has become more connected and less predictable, thinking and practice around resilience has shifted, from the world of predictive modelling based on historical data, to a greater emphasis on developing the capability of employees to respond flexibly to situations as they arise. In the past, resilience may have been more about attempting to edit out risk, nowadays it is more about learning to embrace risk in search of business growth. It is about staying alive and adapting to, long-term trends, and engaging the capability and creativity of employees to enable the organisation to stay in tune with its customers and be able to continually reinvent its future.  

What can leaders do to foster resilience?

The first thing to realise, and this is borne out by research in the area, is that it is the culture of the organisation that matters most. Processes, systems and procedures all have their role, but it is really the shared beliefs, behaviours and values of people that make the greatest difference.

There are, perhaps, four key areas of culture that leaders need to focus on shaping in order to improve levels of resilience:

1. Create and embed a shared sense of purpose and values. Senior leaders need to continually communicate and live this in such a way that each and every employee can translate it into a concrete sense of how their job contributes to the organisation. A sense of purpose is also something that has been identified by IES’ own research as critical for personal resilience.
2. Structures, processes, and ways of working all need to support a culture of collaboration, both inside and outside the organisation. Building and maintaining relationships with customers, innovators and even (potential) competitors in the market helps retain an outward-focus.
3. Employees across the board feel empowered to make decisions within the framework of the organisation’s purpose and values, and do not feel micro-managed. Clearly, not all decisions rest with each and every employee, but a general sense that decisions are made at the appropriate level and individuals feel a sense of agency is key.
4. In the modern world, busyness is frequently prized above all else. For organisations to be resilient, they need to be continually learning, with space given over to reflection. Employees need to feel psychologically safe and able to share their ideas, as well as challenging those in more senior positions, and any underlying assumptions, where appropriate.

One step to take now

To build a resilient culture, the first step is to ensure that the subject is ‘on the table’. HR and OD practitioners should start by asking themselves and others some key questions such as:

• How does their organisation typically respond in times of adversity?

• How open are leaders within the organisation to new ideas and ways of working?

• Are employees sufficiently empowered or do they feel micro-managed?

Asking these types of questions not only begins to generate understanding about the current situation, but the questions themselves are an intervention, prompting individuals to reflect on how they currently work and how they could work differently.

Whilst the road to a resilient culture may feel daunting, it is also the case that building your organisation’s resilience does not necessarily mean launching a whole host of new initiatives. Many existing activities may either be supportive of, or have the potential to support, resilience. Ensuring, for example, that existing or planned leadership development initiatives are supportive of individuals from different functions and that all areas of the business are connecting, are two ways in which resilience can be incorporated into activities with a broader purpose.   

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.