Resilient by Design
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6 x 9
As managers grapple with the challenges of climate change and volatility in a hyper-connected, global economy, they are paying increasing attention to their organization’s resilience—its capacity to survive, adapt, and flourish in the face of turbulent change. Sudden natural disasters and unforeseen supply chain disruptions are increasingly common in the new normal. Pursuing business as usual is no longer viable, and many companies are unaware of how fragile they really are. To cope with these challenges, management needs a new paradigm that takes an integrated view of the built environment, the ecosystems, and the social fabric in which their businesses operate.
Resilient by Design provides business executives with a comprehensive approach to achieving consistent success in a changing world. Rich with examples and case studies of organizations that are designing resilience into their business processes, it explains how to connect with important external systems—stakeholders, communities, infrastructure, supply chains, and natural resources—and create innovative, dynamic organizations that survive and prosper under any circumstances.
Resilient enterprises continue to grow and evolve in order to meet the needs and expectations of their shareholders and stakeholders. They adapt successfully to turbulence by anticipating disruptive changes, recognizing new business opportunities, building strong relationships, and designing resilient assets, products, and processes. Written by one of the leading experts in enterprise resilience and sustainability, Resilient by Design offers a confident path forward in a world that is increasingly less certain.
"Resilient by Design shows convincingly how resilience can be designed into core business processes, and offers fascinating real-world stories of resilience in action. It provides insight into how resilience aligns with the interests of business, society and the environment, making each stronger and more productive."
Joel Makower, Chairman and Executive Editor, GreenBiz Group, and author, Strategies for the Green Economy
"Resilient by Design helps organizations to think about how to succeed, survive and adapt in our increasingly complex world. In order to survive, companies must account for social and environmental values in their systems, structures and processes. This book provides relevant lessons learned and frameworks for dealing with change."
Chad Holliday, Chairman of the Board, Royal Dutch Shell
"It is time to redefine the role of business in society as we work together to bring humans into a sustainable relationship with the natural systems of the planet. The concept of resilience as the key goal of living systems like people, nations, ecosystems and companies is an important addition to the growing literature around planetary sustainability. Dr. Fiksel has here made a tremendous contribution by showing us not only the theory but the opportunity of resilience for our society and planet."
Neil Hawkins, Corporate Vice President and Chief Sustainability Officer, The Dow Chemical Company
"This is a timely and important book that will come to be seen as a foundation text for companies' efforts to adapt and thrive in the face of the many global changes we can expect as this century unfolds. The information contained in it can help enterprises realize that risk is here to stay and that forward looking companies will embrace risk and put it to work as a competitive advantage. Recommended reading for risk managers and strategists everywhere."
Louis Ferretti and Peter Williams, IBM Corporation
PART I. Resilience as Competitive Strategy
Chapter 1. Embracing Change
Chapter 2. From Risk to Resilience
-Resilience In Action: Entergy and Swiss Re
Chapter 3. Systems Thinking
-Resilience In Action: Applications of Systems Thinking
Chapter 4. The Resilient Enterprise
PART II. Practicing Enterprise Resilience
Chapter 5. Generating Business Value
Chapter 6. Resilience in Supply Chain Management
-Resilience In Action: Assuring Continuity at L Brands
Chapter 7. Resilience in Environmental Management
-Resilience In Action: Dow Chemical
Chapter 8. Organizational Resilience
-Resilience In Action: Emergency Response at American Electric Power
Chapter 9. Tools for Managing Resilience
-Resilience In Action: Crisis Management at IBM
PART III. Designing Resilient Systems
Chapter 10. Design for Resilience
Chapter 11. Connecting With Broader Systems
-Resilience In Action: IBM And Smarter Cities
Chapter 12. Looking Ahead: From Resilience To Sustainability
Thursday, April 7 at 1:15 pm EST.
Join Joseph Fiksel, Island Press author and Executive Director of the Sustainable and Resilient Economy program at The Ohio State University, for an in-depth look at enterprise resilience – the critical success factor in both businesses and communities ability to survive, adapt, and flourish in the face of natural disasters and unforeseen supply chain disruptions. Fiksel’s new book, Resilient By Design, offers insight into why workforce leaders need a new business paradigm – one that takes an integrated view of the built environment, ecosystems, and the social fabric, while recognizing new business opportunities that result from this shift.
Moderator Michelle Wyman, Executive Director of the National Council for Science and the Environment (NCSE), brings an extensive background in energy and environmental policy at the state and local levels. The webinar will bring context to the importance of resilience across business and municipal communities, and describe why all leaders must move beyond the business-as-usual approach in order to thrive in the 21st century.
As we are learning the hard way, the new normal of climate change and a volatile, hyper-connected global economy mean that sudden natural disasters and unforeseen supply chain disruptions are here to stay—and pursuing business as usual is no longer a viable option. But how can businesses adjust? Joseph Fiksel argues that the key is resilience—an organization’s capacity to survive, adapt, and flourish in the face of change.
In his new book, Resilient by Design: Creating Businesses That Adapt and Flourish in a Changing World (publication date: October 22, 2015), Fiksel outlines a new paradigm that helps managers design for resilience. Check out chapter two below.
Katharine Sucher is the Publicity & Marketing Assistant at Island Press.
What happens when a company misleads consumers and intentionally pollutes the environment? We asked some of our authors to comment on the recent Volkswagen emissions scandal. Check out what they had to say below and share your own thoughts in the comments.
Photo Credit: Manik at Flickr.com
As an environmentalist, I probably shouldn’t say this, but I love my car.
For starters, I love its exceptional fuel economy—an average of 37.5 miles per gallon in the four years I’ve owned it and typically up to 45 mpg on the highway, a significant boost above the U.S. vehicle fleet average of 23.6 mpg. I love its understated style—sleek, compact, and modern without looking flashy. I’ve even come to love the feline purr of its diesel engine, the little rumble that signals its latent power.
Unfortunately, my dream car is something of a mirage. That’s because I’m the owner of a 2010 Volkswagen Jetta SportWagen TDI, one of the nearly half a million VWs that, as the company now admits, was secretly manipulated to evade U.S. and California clean air regulations. VW sold me, and hundreds of thousands of other Americans, a vehicle whose green promises (“clean diesel!”) were little more than a smoke screen.
Let’s be real: Owning a car is a regrettable necessity in our sprawling, industrial landscape. I’m lucky enough to live in a region—the San Francisco Bay Area—where I don’t have to drive much. I commute by bike and train, and I can get everything I need within walking distance of my home. Most weeks, my car sits curbside gathering dust and leaves. But on the weekends, my family and I like to get away to the seashore, the forests, or the mountains—and for that we need a car.
Continue reading more of Jason's thoughts here.
The deliberate deception on Volkswagen’s part represents a breach of trust that will undoubtedly affect the company’s reputation and brand image for years to come. But the ripple effects of this scandal are even broader. For those who are cynical about capitalist motives, it simply reinforces the unfortunate stereotypes of corporate greed and manipulation. For those who respect the efforts of global corporations to be environmentally and socially responsible, myself included, it represents a setback in public perception of the business community. From my experience, the large majority of companies work hard to uphold their values and ethical standards, and are sincerely dedicated to the sustainability goals that they profess. Occasionally they are guilty of errors in judgment, and we have certainly witnessed a number of incidents where automotive companies clearly failed to protect the safety of their customers. However, even though no one was physically injured by Volkswagen’s actions, the company grossly violated the basic claim of their product—clean diesel engines. This is an unprecedented insult to society, comparable to the Enron scandal, and I expect that in the near term it will taint the credibility of corporate sustainability programs in every industry.
Photo Credit: littlemoresunshine at Flickr.com
My book Corporation 2020 (Island Press, 2012) on the evolution of the Corporation – past, present and future – explored the changes that were needed in policies, prices and institutions to change the DNA of the Corporation. Today's economy and politics is dominated by the ethically challenged DNA of 'Corporation 1920,' steeped in the economic philosophy of Milton Friedman, and guided solely by the pursuit of profits, with their goals mis-aligned with society, generating trillions of dollars in social costs: the negative externalities of "business-as-usual." But I was able to find and describe many successful instances of the new DNA – corporations with social purpose, positive externalities, achieving private profits without inflicting public losses. And every so often, I hear or see something that makes me think I have found another one….
Such was my impression when I visited Volkswagen in Wolfsburg a year ago, to teach a seminar. I learned that their cars and assembly lines were being designed to ensure each model and chassis could take four types of engines: petrol, diesel, hybrid and electric. It seemed a very pragmatic way of staying open to business for a fossil-fuel-free world of tomorrow. But in hindsight, it was more likely a pragmatic way of staying open to a diesel-engine-free future. Volkswagen is guilty of misdemeanour on a massive scale but it looks like they are not alone. Recent research by the Institute for Transport Studies at Leeds University, UK, suggests that Mercedes, BMW, Ford, and Mazda diesel cars are even more polluting than Volkswagen, and up to the same software deceit. How can an entire industry go so wrong? Very simple: by being driven solely by the pursuit of financial profits, totally ignoring the wider world of human, social and natural capital that they depend on and have impacts on. That is why we need a new corporate performance measuring system such as Akzo-Nobel's "4D-P&L" concept, see www.corp2020.com. You cannot manage what you do not measure. Accountancy regulators need to wake up from their sleep of a century, and realise that the financial reporting of 1920 is simply NOT good enough for 2020!
Katharine Sucher is the Publicity & Marketing Assistant at Island Press.
The terrorist attacks that occurred in Paris on November 13 shattered the complacency of the French lifestyle. A few weeks later, a savage attack erupted in San Bernardino, California, further exposing the vulnerability of Western societies.
Dealing with terrorism and, in particular, with the frightening emergence of the ruthless Islamic State organization, also known as ISIS, will preoccupy the attention of world leaders for some time.
But there is a larger lesson to be gained from this and other recent crises. Put very simply: our complex global society lacks resilience.
What do I mean by that? Everything from our vulnerability to power failures to our overreaction of vilifying people who merely “look like” the perpetrators of violent acts, an overreaction demonstrated by Donald Trump’s recent call to close our borders to Muslims.
The good news is that we can improve our resilience. First let’s examine our society’s vulnerabilities.
Terrorism is just one of many global threats that we face.
Our economy is highly vulnerable to a range of unexpected crises such as the 2011 tsunami that destroyed Japan’s Fukushima nuclear power station, causing costly delays in the electronics, motor vehicles and other industries.
The giant reinsurance company, Munich Re, reports a sharp increase in the number of natural disasters during the past 32 years – a trend that is linked to climate change.
Are we adequately prepared for the next catastrophe, even though we cannot predict what it will be?
The root cause of our vulnerability is the structure of the global economy: highly interconnected, complex and filled with turbulence.
Major disasters can occur unexpectedly, and even minor incidents can cascade into significant human and financial losses. Emerging pressures such as climate change and urbanization will only intensify the potential for extreme events and severe disruptions. When a catastrophe occurs, we rush to aid the victims, but the memory quickly fades and we return to business as usual, dealing with more immediate financial or political pressures.
Could we do a better job at anticipating and responding to unforeseen events?
Although businesses, communities and government agencies have developed elaborate “risk management” systems to detect vulnerabilities, this approach has an inherent weakness. It cannot protect against unidentified risks.
In an increasingly complex and volatile global economy, it is virtually impossible to predict and analyze all possible disruptions. Rather than resisting the inevitable waves of change, we need to embrace change and learn to ride the waves.
Plant street via www.shutterstock.com
In my book Resilient by Design, I argue that to embrace change requires going beyond the traditional approach of minimizing unwanted disruptions and recovering normal operations as quickly as possible. We must treat each surprise event as a learning experience, and adapt accordingly.
Risk management makes sense in a stable environment with predictable events, but in today’s more complex risk landscape – the new normal – it is inadequate for dealing with fast-moving, unfamiliar threats that may cascade into disasters.
The most damaging disruptions are often a result of rare, “black swan” events that were never anticipated. Who would have guessed, for example, that a volcano in Iceland would ground virtually all air traffic in Western Europe?
The US government and many private companies have begun to study the resilience of our economic systems, urban communities and the infrastructures that support them.
A particular concern is adaptation to the emerging effects of climate change, including extreme weather and rising sea levels. Rather than responding to crises after the fact, we are beginning to design dynamic systems that are better prepared to anticipate crises and more capable of coping in the aftermath. For example, package delivery companies such as UPS use real-time monitoring systems to quickly reroute deliveries in the event of a transportation disruption.
Resilience – the capacity to survive, adapt and flourish in the face of disruptive change – is a basic characteristic of all living systems, from individual creatures to entire ecosystems. Most people are psychologically resilient in the face of setbacks, ranging from diseases to divorces or job layoffs.
Human communities are remarkably resilient, and many cities have been completely rebuilt after catastrophic events. In contrast, engineered systems such as machines, buildings and industrial supply chains are generally more “brittle” and prone to failure or collapse.
Brittleness is not inevitable. It is a fundamental design flaw.
Mechanistic systems based on logical rules cannot cope with events that the designers failed to anticipate. We have much to learn from the natural world, where resilience is seen everywhere from cells to organisms to entire ecosystems.
Today, innovative companies are learning to behave more like living systems, sensing, responding and adapting to change. They view resilience as a source of competitive advantage and are supplementing traditional risk management methods with adaptive processes and technologies.
For example, IBM has worked with the city of Rotterdam to deploy advanced cyber-based methods for flood detection and control, enabling the city to cope with the increasing intensity of flooding events. And researchers at The Ohio State University have developed a supply chain resilience assessment tool that helps to spot a company’s areas of vulnerability and identify corresponding capabilities that need to be strengthened.
Resilience capabilities are quite diverse, ranging from physical design of operations to information technologies to training of employees.
One basic approach to resilience is reducing the concentration and complexity of a system: for example, by building smaller-scale, distributed facilities instead of a single centralized facility. Global giants like Dow Chemical are exploring a range of supply chain resilience strategies, from increased flexibility of transportation modes to early warning systems that sense and respond quickly to surprise events.
And next-generation nuclear plants will have safety features that eliminate the chance of a meltdown. We hope.
The above research has shown that human intelligence and creativity are among the most powerful tools available to build resilience against unforeseen threats and enable both companies and communities to flourish.
Clearly the most challenging threat that we face today is the rise of violent extremism. Terrorist organizations, with their decentralized structure and covert operations, are inherently more resilient than the traditional armed forces deployed by nation-states.
Despite huge investments by the US and its allies in counterintelligence, we are still ineffective in “asymmetric” warfare. Overwhelming force may achieve temporary victories, but cunning and subterfuge eventually prevail.
To defeat terrorism, we may need to leverage the human factor – and its inherent resilience – by taking advantage of citizen involvement, social media and other nontraditional tools.
For example, the surveillance work of intelligence agencies can be complemented by conscious public efforts to promote inclusiveness, avoid alienation of minorities and reach out to potential dissidents. This type of adaptation seems more promising than trying to shut our borders to entire classes of immigrants.
In this age of turbulence, resilience has become a prerequisite for continued prosperity. Simply going back to business as usual – as we’ve too often done – is not the best strategy. Rather than bouncing back, we need to bounce forward.
Dr. Joseph Fiksel serves as Executive Director of the Sustainable and Resilient Economy program at The Ohio State University, and is a research faculty member in the Integrated Systems Engineering Department. He is the author of Resilient by Design: Creating Businesses That Adapt and Flourish in a Changing World