Companies need to develop ‘organizational fortitude’ if they are to successfully overcome multiple crises and adversities, according to new research from Emlyon Business School.
In order to create fortitude in an organization, there are three key components that need to operate together. These are:
Resoluteness propensity: this can be described as all stakeholders singing off the same hymn sheet, and all having the motivation, determination and desire to do all they can to ensure the company survives, even if it involves risky choices.
Resource reserves: this is described as the company having sufficient resources to deal with the shocks it faces, whether that be money, materials, knowledge, or connections, ensuring these are all ready and available to use when needed, to dig themselves out of a hole.
Shared values: this is described as everyone in the organization believing in the same important ideas and principles. They tend to agree on what is right and important for the organization and thus are able to take active, collective steps to move forward.
These findings come from research led by Celina Smith, Associate Professor of Entrepreneurship at Emlyon Business School, alongside colleagues from Università degli Studi di Bergamo, Lancaster University and Zhejiang University, and Stockholm School of Economics and Jönköping University.
The researchers wanted to identify the factors that help an organization to become resilient over time in response to numerous shocks. To do so, they studied a long-established family firm in the United Kingdom that experienced four major adversities – a factory fire, a major factory flood, enforced relocation, and a global pandemic, in a short timeframe.
The researchers studied the processes that enabled the organization not only to survive these numerous adversities but also go on to thrive afterwards, identifying their reaction, the proactive changes they made, and the pivoting they did to continue to operate. In doing so, they identified the above three key components needed for the organization to develop organizational fortitude which ultimately helps organizations to build resilience and overcome each adversity.