CEO CFO Magazine Interview about OrgVtality

OrgVitality’s Jeffrey Saltzman was interviewed by CEO CFO Magazine to discuss what we’re all about. You can read the transcript here.

CEOCFO: Mr. Saltzman, what is the concept behind OrgVitality?
Mr. Saltzman: OrgVitality, LLC is a management consulting company specializing in organizational effectiveness, offering services that address critical business challenges. We are experts in designing metrics/organizational change projects that are linked to strategy, generate useful insight, and drive positive action. Our ability to deliver projects with an ideal balance of expertise and flexibility, sophistication and creativity, and premier consultation with small-business customization is what makes OrgVitality stand out from the rest. OrgVitality’s work centers on people, and how organizations can maximize the performance of their people and by extension the organization.  A group of Industrial/Organizational Psychologists and Technologists formed OrgVitality.  We view ourselves, each in our respective area of expertise as craftspeople, expertly and carefully creating programs, solutions, and experiences for our clients that meet their specific needs. As a group, we average more than 20 years of experience and are all interested in doing our work without forcing our clients into preconfigured boxes. Upon the formation of the company, we took a step back and examined the state-of-the-art in organizational effectiveness, and it was only after we had settled on the best science that we built our product catalog of services offered. What we craft for our clients is a blend of this science, delivered with the most current technology available, wrapped in the pragmatism of decades of experience regarding what works and what doesn’t.

CEOCFO: How does that translate day-to-day?
Mr. Saltzman: OrgVitality designs and implements innovative technology and cutting-edge products that are tailored to the needs of our clients as well as the current business climate.From employee surveys to 360 assessments to multi-analytic data platforms, we work together with out clients to determine how to make your organization thrive. Our services include Strategic Employee Surveys, custom surveys based on your strategic needs, designed to help your organization thrive and support transformation. 360 Assessments and Coaching which provide general organizational capabilities calibration, inform selection processes, or used as a baseline for coaching plans, while supporting the creation of a coaching culture. Organizational Metrics & Strategy, which involves creating metrics, conducting research, and then strategically evaluating how to improve organizational effectiveness. And, Decision Support Portals which are smart dashboard systems designed to empower you and your employees to make smarter decisions based on the intelligent prioritization of multiple data streams.

CEOCFO: When you are first working with an organization, what is the key to understanding what their goals really are, not what they believe they need?
Mr. Saltzman: We often start by conducting executive interviews, often followed up with employee focus groups. This then leads to data collection at scale, commonly through employee surveys or other assessments. Sometimes there is a disconnect between what is stated as the organization’s objectives, the way management wants organization to actually operate and from an employee’s perspective, the way they actually operate. This procedures clarifies that potential disconnect. One exercise is to examine from the employee’s perspective what be-haviors are actually getting rewarded not what the organizations states they are rewarding. For example, in one organization, the marketing group pulled together the materials used by sales and the head of sales would regularly go to the marketing folks screaming, demanding chang-es using all sorts of foul language in a very confrontational and disrespectful manner. I asked the CEO what happens when that occurs. He said that everyone stops what they are doing and addresses the sales person’s concerns until they were resolved. Hence, they were rewarding that very behavior that the CEO stated he did not want. This also made other executives believe that they had to scream and carry on in order to get results. From a perspective of how they wanted to operate, they were not achieving the kind of climate that they really aiming for and not creating a climate where employees wanted to go above-and-beyond. Therefore, they needed to do a full stop and no longer reward those kinds of behaviors.

CEOCFO: Are you surprised that the leadership in these organizations has such a lack of understanding in this area?
Mr. Saltzman: I am also adjunct faculty at a school of management, where I teach in their Executive MBA program and one of the things that I do with my students all of the time is look at how humans fall into decision-making traps. Our brains are wired to operate in a certain way, whether it be using rules-of-thumb that can lead to all sorts of judgment errors, difficulties in accurate perception of a problem or even to what is called “magical thinking”. Thinking that if you keep doing the same things that they will eventually get a different outcome or an outcome that is based on “wishful thinking” and not evidence or science. It is not that organizations do not know what they are doing, but for humans in general, it is very easy to fall back into our tried and true patterns of decision-making. One thing we at OrgVitality try to do is bring a more disciplined approach to organizational decision-making that can lead to higher performance and better judgements.

CEOCFO: What types of companies tend to use your service?

Mr. Saltzman: My partners and I, as I mentioned earlier, are Industrial and Organizational Psychologists as well as technologists. Our work is tailored to really fit the client’s needs. Over the last 30 years, my partner and I have worked with numerous Fortune 100 companies, Best Plac-es to Work winners, small startups, government agencies and not-for-profits. We really run the whole spectrum, and are not tied to any specific industry or geography. We are also certified by the General Services Administration as a supplier to the US Federal Government.

CEOCFO: Did the Best Places to Work winners happen before or after they brought in OrgVitality?
Mr. Saltzman: I would say, during. The reason for that is that people who want to do our kind of work tend to be better organizations in the first place. If you do an employee survey and you are giving someone really critical data, who is more likely to use that data? It is the better managers. The managers who really need help with using the data are the ones who probably could use some management development and tend to be not as interested in the data because they may not see the importance in the data. They tend to be managers who are less successful over the long-term, as they do not fully recognize the importance of their people. It is a virtuous cycle. A virtuous cycle is when an organization is doing good things and so increasing its perfor-mance, enabling them to do more good things. Best Places to Work winners tend to do this kind of work.

CEOCFO: Would you walk us through a project?
Mr. Saltzman: Here is one example. We are working with a large multi-national company that has asked us to tie employee their culture to business outcomes. In other words, to demonstrate which aspects of culture most affect their business success. Business outcomes could be various things such as customer satisfaction, customer repurchase intentions, employee turnover, theft in a retail environment, overall financial performance etc. What we are doing is linking which aspects of the organization’s strategy and culture are working from the employee’s perspective and what aspects of strategy are falling short. Going beyond that, as employee’s rate certain aspects of performance either higher or lower, we statistically demonstrate is that certain aspects of performance are leading to better business outcomes. As the organizations are more sucessful, they are able to create better environments for the people working in that organization. Therefore, it is a win-win. We begin with the senior executives, in one-on-one interviews, as-sessing the challenges of the organization over the next 12 to 18 months. We talk about what is keeping them up at night, such as concerns over quality, production, and customer service or employee turnover. We also look to find out if they have articulated a current strategy and what they need to achieve, in order for the organization to achieve that strategy. Then we also talk to the employees and ask them two very simple questions. 1) What are the things that the organi-zation is doing well that it should not change, and 2) What are the things that need to be done better, that would make the organization more effective and enable you to do your job better. We then take these findings and translate them into an employee survey with data most often collected in a census fashion. We get a read across the entire organization, which may involve hundreds or hundreds of thousands of people. Last year our surveys were translated in to well over 40 languages and administered in 60 to 70 countries. Once we have that data back, we are able to slice it to the individual manager who is responsible for various pieces of the organiza-tion. Therefore, the top of the house gets a read on how they are performing as an organization overall. Individual managers, get a report back, so they get to see how they are performing lo-cally in addition to how their local performance fits into the overall performance of the organization. We train them on how to use that data and how to make organization improvement changes. When you get all of the managers in an organization together, and each one of them takes one or two things and does it better, you can get a great deal of positive change.

CEOCFO: How do you structure a question in a way that will get a response that is most meaningful?
Mr. Saltzman: There is a whole science around that and a whole methodology to writing a good survey question. You want to make sure that a survey item is about a single topic and not double or triple barreled. You also want to make sure that it is not leading the witness, so the stem is neutral. For example, “I have the necessary training to get my job done”. Which would be on a “Strongly agree to strongly disagree” scale.

CEOCFO: Are clients coming to you because they understand the depth, experience and individualization of what do or are they surprised to find out what you bring to the table?
Mr. Saltzman: It is a little bit of both. The vast majority of our clients are repeat clients. However, we also have been able to grow about 50% in each of the last 5 years. Therefore, our business is a mixture of many repeat clients, hopefully, because they are pleased, as well as growth due to our reputation as a company dedicated towards tailoring to specific client needs.

CEOCFO: What is your geographic reach?
Mr. Saltzman: We work globally and currently, we have consulting and project management staff based in New York, San Francisco, Atlanta, Spokane and Raleigh Durham. We also have a technology development group that split between the US and Israel.

CEOCFO: Do you see international as a growth area?
Mr. Saltzman: Absolutely. The vast majority of our clients are international in scope and we have a number of clients, who are non-US headquartered.

CEOCFO: Given your experience, do you often have a sense of what you will find at the end of the process?
Mr. Saltzman: Yes and no. What I mean by that is that many companies, when they first come to us will make statements such as, “You do not understand; we are different”. However, they are not always that different, because organizations are full of people, and people tend to think very similarly around the world. They also tend to behave very similarly around the world. There are certainly cultural and generational differences, but if you ask, “What do people want out of work and how does work get done?” People around the world are much more similar than they are different. Fundamental things like respectful treatment, fairness and a sense of future for myself, leading to good outcomes for my family and children are universal. For instance, I was doing focus groups in Egypt for a pharmaceutical company and what the woman in that group stated was that the real problem for them was a glass ceiling and that women could not get past, which is something that is a also common topic in the US. If we want to search for differences we can find them, but the truth is that we have a lot more in common with those from around the world than those things that differentiate us.

CEOCFO: What surprised you as OrgVitality has grown and developed over the past five years?
Mr. Saltzman: We are purposefully counter market. What I mean by that is that we are tailoring our work to fit individual clients and most of the other consulting companies in our space are no longer doing that, as they take a path to higher margins through genericizing their work. Therefore, it was risky to go with this approach, but our success indicates that it was the right decision for us.

CEOCFO: Are you finding that corporations are recognizing that they need to address this area or is it still under the radar?
Mr. Saltzman: If you looked at the Fortune 500 companies, I would think that 400 out of the 500 are already working in this space to some extent or other. Therefore, it is a big market and many companies pay attention to it. There are companies that I know that have CEOs that just do not believe in this kind of work, but I think that they are far and few between. There is an un-derstanding that employees have a great deal of valuable information and insights that can help the organization achieve higher levels of performance.

CEOCFO: Put it all together for our readers. Why choose OrgVitality?
Mr. Saltzman: They should choose OrgVitality because we can help your organization reach its full potential. We can help your organization thrive and we can help the employees in your organization perform at higher levels.

Repurposing the Organization

On September 6^th at 11:27 pm eastern, NASA’s Lunar Atmosphere and Dust Environment Explorer (LADEE) took off from Wallops Island, Virginia. Being in New York, I was not sure how much we could actually see of the launch, but the night was crystal clear so the family stayed up late, and we all went out looking for a spot with a view of the southeastern horizon. We weren’t sure exactly where to look, but a few seconds after the scheduled launch we saw a bright red spot moving rapidly from the south to the eastern horizon. I was not sure what we were seeing but after a few seconds it became clear that we were watching NASA’s rocket heading to the moon. My 13 year old was so excited that she was bouncing off the walls and the beds when we came back into the house. Her first rocket launch and it was pretty far away, but nevertheless it was able to instill a sense of awe and excitement in her. Thank you NASA.

The next day I headed to the internet to determine if we were accurate in what we thought we saw. Sure enough there were lots of people who had snapped photos with images that looked exactly like what we saw posted on NASA’s website. I read a little about the launch and I was suddenly quite thrilled myself. The launch vehicle used for this lunar mission was a Minotaur V+ rocket. This was the very first time that kind of rocket was used, its maiden voyage. The newness of the rocket is not what thrilled me, what thrilled me was its history. The Minotaur V+ rocket is a repurposed Intercontinental Ballistic Missile (ICBM) that was originally designed to carry nuclear weapons. Instead of raining destruction down upon the earth, as this rocket was intended, it was being used for the peaceful exploration of the moon. I was reminded of a small knot that I used to carry around in my stomach, and that knot I now found had lost its hold over me.

I was a cold-war baby. Born in 1959, I clearly remember bomb drills in elementary school where we went into the hallways, away from the windows and ducked our heads (like that was really going to help). Sometimes we went into the school basement and assembled behind an enormous pile of gravel, or huddled under our wooden desks. Flimsy wooden desks, as we all knew, where very effective shields against nuclear blasts. All the kids knew that the reason we were practicing these activities was because suddenly, without any warning, nuclear bombs on the tips of missiles could come down on top of our heads. It was a very scary time to be a kid. During that NASA launch on September 6^th I was unknowingly watching one of my worst childhood fears being expelled into space. It felt great when I realized that. I think it is terrific that a weapon that was capable of such great destruction had been put to a positive use – it was repurposed.

I began thinking about how you would go about repurposing an organization in order to reinvigorate it, to give it a new, fresh, inspiring purpose. Not that all organizations are necessarily designed for great destruction as an ICBM, but sometimes organizations do need to reinvent themselves, to repurpose themselves, to give them additional life. How could it start?

There is a notion out there called organization ambidexterity. In people, ambidexterity is defined as being capable with both your left and right hands. In the world of organizational science it has come to mean a dual focus on short-term performance as well as longer term capability. It is the notion of Organizational Vitality.

Without short-term performance organizations will cease to exist. If you don’t supply a product or service that external customers want, if your internal business process are broken, or if you can’t attract the talent you need to conduct your business your likelihood of survival for the long-term is dim. Alternatively, if your sole focus in on long-term potential, building capacity and capability for the future, that future might never be realized.

There is a balance that must be struck between the short and long-term. Without short-term cash flow and profits the longer term may be out of reach, and without long-term capability building, short-term performance is a dead end. Yet the short and long-term are in conflict. If your desire is to have maximum short-term performance you might be reluctant to invest in research & development, or the trial and error of new processes and procedures, or having extra or slack resources available to explore options. If you want to maximize short-term performance you run an extremely lean and tight ship with no extras. But as you run leaner and leaner, at some point you are cutting away and diminishing the organization’s future. And if you build in too many extra resources your profits and your ability to stay in business, to realize your future, will evaporate.  A balance must be struck.

What many organizations don’t realize is that the information that they need to determine that balance exists, most typically, right within the organization itself. All you need to know is how to extract it. A typical employee survey focuses on the employee as a specimen, as an object to be studied, to be understood. Are the employees engaged? Are they willing to recommend us as a place to work? Are they proud to be here? These are typical questions used when you want to understand how an employee feels. But what if you want to know what an employee thinks? More specifically, what they think about the functioning, the ambidextrous balance that the business needs to achieve?

A fresh approach to employee surveys is to treat the employees as a resource, which if asked the right questions, within the right framework, can shed light on whether the ambidexterity balance is shifting too far in one direction or the other.  Questions on an employee survey for instance should be tied to the organization’s strategy. If the organization is going to emphasize customer focus as a differentiator, ask about customer focus. And look at the results not only for those whose responsibility is customer facing, but look at your top performing customer facing folks and compare them to the others. What do they think about your ability to serve your customers?

By methodically choosing items that are linked to the long-term strategy of the organization and short-term performance needs and then examining the strengths and short-comings, as your employees see them, you begin to build the picture of where you are in creating a Vital, ambidextrously balanced organization.

A Moose in the Distance

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What do organizations want? The answer is nothing. Organizations are nothing more than an abstraction. Organizations are virtual, they do not exist. You can’t talk to an organization. You can’t touch an organization. You can’t expect an organization to operate in one fashion or another.

An organization is an amalgamation, a sum of its people. You can talk to an organization’s people. You can shake hands with its people and you can expect its people to behave in a certain fashion.

So what do organizations want? The answer is they want whatever it is the people within the organization want. If the people in the organization desire to behave in a respectful way towards others, then the organization becomes one that is known for respectful treatment. If the organization is one in which quality is paramount for each and every individual then the organization becomes one that is known for delivering quality products and services. The organization takes on the characteristics by which the majority of its people operate. (It is of course incumbent to the organization to provide the resources that people need in order to operate in the desired fashion).

What is the tipping point, the point at which an organization’s reputation is driven by those characteristics? Is it when a third of the people operate according to a certain shared vision, a half, two-thirds? I don’t know an exact number but I would suspect that the number will vary somewhat depending on the characteristic that is being adopted. Unfortunately, what is very clear is that a negative characteristic much more easily gets associated with an organization’s reputation than a positive one. It takes but a single breech of ethics to taint a reputation; a single quality issue can cause an organization to have to constantly reprove itself with a customer. A relatively minor labeling issue on a report, for instance, can cast the veracity of the whole report into doubt, doubt that is much more easily purchased than is a reputation of quality.

The notion of how an organization will operate, its standards, needs to percolate throughout the entire organization. Critical operating standards need to be infused into each and every aspect of organizational functioning. They need to break through any barriers that might exist as they find their way into each and every pocket of the organization. For instance, safety cannot be the imperative of a manufacturing unit and then felt not to apply elsewhere within the organization. Safety must be infused if it is to stick long term within the organization and become part of what the organization is, how it is defined.

I have had a desire (not an obsession, just an interest) that I have been pursuing for a number of years. I have been hoping to see a moose in its natural habitat. I have taken trips to Alaska, Vermont, Maine and Wyoming that have been at least partially driven by my desire to observe a wild moose. I have been successful twice in my pursuit of the elusive creature, once in Alaska and once in Wyoming. But each time there has been a slight snag. The moose has been so far away from me that they are no more than a small dot, visible as a moose by binoculars only. The notion of being close enough to observe their behaviors, to really feel their presence, to get a sense of what the creature is really like, has been slightly beyond my grasp each time. Each sighting has left me feeling somewhat unfulfilled. Somehow those partial successes have only driven me to plan my next foray into moose observation with a little more intensity.

Just as the pursuit of a desire will often fall somewhat short of the vision of perfection that you have in your head, the pursuit of the perfect organizational environment is an elusive goal as well. There is no such thing as a perfect organization, only a vision of perfection that one can strive for only to find that it is constantly somewhat out of reach. But that doesn’t mean we give up on our vision, our desires, we simply need to plan with a little more intensity for our next foray. We set goals; we set goals not because they represent an end state, but because they represent stops, however brief, along the way. In today’s competitive ever changing environment the eventually end state, the culmination of the dream does not exist. The end goal is an ever moving elusive target, but it is a goal that we must pursue.

© 2011 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

 

 

Organizational Resiliency to Time and Change Effects

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The arrow of time in our universe is unidirectional, moving from the past, to the present and forward into the future.  No matter how much we might desire to freeze moments that are precious to us, capturing forever their special meanings, they slip through our fingers as time marches on oblivious, neither slowing, standing still, nor retreating from its own journey. Though we sometimes seem to view ourselves as disconnected observers of time, remembering past and projecting or modifying the future from some place outside of the flow, we live within the time flow and are firmly subject to it.

One thing that is certain, as time moves forward things change. Things change for people as well as for organizations, inexorably. And just like you cannot control the flow of time in which we reside, you cannot slow down, stop or reverse change from happening. But both individuals and organizations can do things that will help them cope with change and to deal with, mitigate and even use its effects to personal and organizational advantage.

One key to dealing with the effects of change is to become more resilient, on an individual level and an organizational level.  How does a child raised in poverty in the Bronx rise to become a Supreme Court judge, or a child from humble roots in Ohio become the Speaker of the House, or a child raised by a teen mom, in an unstable, unpredictable environment, rise to become President of the United States? These were not children of privilege, these were children of resilience. Look at the innumerable children of immigrants, living and growing up in marginal conditions, who over the years became the engines of our economic prosperity, the pillars of our educational institutions, the creative geniuses behind our innovations and technological breakthroughs, or perhaps simply the doctor who saves the life of your child.

Organizations of resilience are seen everywhere we turn, from family farms, to single proprietor craftspeople, to large private sector corporations, to governmental entities, to NGOs and educational institutions. During the course of a year these organizations may be dealing with recession and the resultant drop in business, the next a merger or acquisition perhaps a hostile takeover, the next a disruptive new competitor, the next a disruptive new technology.  Each and every organization out there today will have a continuous stream of challenges that they will need to successfully overcome. And in today’s environment those challenges are coming at them at a faster and more furious pace.  How do these organizations become more rather than less resilient to the forces that will constantly impinge and perhaps even use the constant state-of-change to their advantage?

Resiliency is the notion of positive adaptation when faced with significant adversity or environmental threats. This definition implies that significant threats or severe adversity is present and that the individual or organization positively copes with those threats. The research that has been done on resiliency has shown that being more resilient rather than less leads to more positive outcomes for both individuals and organizations. And it is pretty clear that organizations that partake of certain activities can enhance their resiliency. Cutting across the literature the activities that make organizations more resilient seem to fall within 3 main buckets. The first one is paying attention to and mitigating the effects of the external environmental factors. The second bucket is investing in organizational capabilities and the third is recognition of achievements. Each of these buckets has sub-activities that could be summarized as follows:

Environment

Monitoring: Information collection, environmental monitoring and the appropriate analysis, dissemination and actions surrounding that information (for example, employee, customer and supplier surveys, mystery shopper, competitive benchmarking, technology awareness monitoring, market trends, the gathering and analysis of other business metrics)

Reducing: Minimizing the occurrence of negative chain reactions that can occur from one threat, before they spiral out of control. Compartmentalization of negative events so that they do not affect the entire organization. (for example, by the use of strong internal and external communications networks, strong accountability systems).

Investment

Warding: Investing in a shared vision, a shared operating style, senior leadership, employees, products and services, and quality—the standardization of those products and services as well as organizational procedures. (for example, creating a customer service culture, of a values statement, or a standard of operational excellence)

Transforming: Turning risks into opportunities by developing a culture of innovative and creating organizational capabilities (for example, rewarding innovative ideas and performance that goes above and beyond to solve problems, creating deep bench strength, tapping into the diversity of talent and developing that talent)

Enhancing: Increasing organizational effectiveness and efficacy (for example, cost control, state-of-the-art business processes, contingency planning)

Achievement

Celebrating: Celebrating and rewarding organizational and personal accomplishments (for example, successful completion of organizational and personal goals; installing robust reward and recognition systems)

In reviewing a number of models and then stepping back from any single model of organizational performance, there appear to be six enduring challenges that virtually any organization faces in its pursuit of growth and financial sustainability, in terms of increasing its resiliency or, more generally, Organizational Vitality. These are the challenges that organizations need to become more resilient upon. Three of these challenges can be viewed as internally focused and there can be viewed as externally focused. They are:

Internally

Clear and Compelling Leadership. The overarching mission and direction of the organization needs to be developed and translated through its leaders in order to properly secure and align resources.

Engaged Employees. Organizations need to create an engaging experience to encourage the most from the people who fuel the processes, create the innovation, and deliver for the customers.

Quality Work Processes. Products need to be efficiently created and, along with services, effectively delivered.

Externally

Attractive Offerings. Organizations seek to create value by providing customers—particularly paying customers—with valued and competitive products and services.

Service Orientation. Organizations need to instill a service orientation. No matter what the organization offers, it must be offered in a manner that distinguishes the organization.

Customer as Brand Advocates. Developing brand advocates who are willing to speak highly of your products or service in this interconnected age is critical.

Increasing an organization’s resiliency like any other activity is not a magic bullet that solves each and every problem faced, however the evidence does seem clear that resiliency enhancement can have positive and lasting organizational performance improvement affects.

References:

Saltzman, J.M. & Brooks, S.M. (2010), Strategic Surveying in the Global Marketplace and the Role of Vitality Measures. In Lundby, K. (ed.), Going Global: Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace. Jossey Bass.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Coping with the Pace of Change by becoming Resilient

The pace of change is quickening. How many times have you heard that? I have heard it plenty of times, and it is true, not just within an industry, geopolitical entity or by level of industrialization but across the board globally. How we choose to deal with change and its pace, both at an individual and at an organizational level will be critical to our long-term success.  The old notion that an organization can achieve a sense of long term stability in its customer base, product line, operating processes, or technology as it deals with an ever changing, increasingly complex, globalizing environment is an unrealistic one if the organization is to thrive and cope with ongoing significant challenges.  Today’s environment is more volatile and will remain so for the foreseeable future. Challenges will become more and more “routine”, and responding effectively to challenges will be a “normal” issue that organizations need to be equipped to face. Organizations need to be able to cope with challenges and to do so in a way that is sustainable and does not limit future options. If for instance in responding to a challenge, the organization demotivates employees, or disenfranchises suppliers or customers, and views that problem solving path as a repeatedly viable choice, over the longer-term that organization is not sustainable as key employees will depart and suppliers as well as customers will question their rationality of continuing to do business with the offending entity.

Additionally, should the organization choose a path that limits future options, its ability to deal with the next challenge will be hamstrung. Balancing the need to respond to challenges in a definitive fashion and not limiting future options, two goals that are somewhat in opposition, are both required for success. Organizations that perform well in these areas as they deal with their challenges will be by definition more resilient to threats and will be exhibiting higher levels of vitality.

“If a corporation aspires to perform as well as the market indexes over the long term, it will have to change at the pace and scale of the market, but without losing control. Companies, of course, do not have to change at the pace and scale of the market, but if they do not, then the research from McKinsey’s Long Term Performance Database shows that they are more than likely to underperform for their investors.” (McKinsey & Company, 2009).  

Resiliency is a construct that has generated increasing interest since the 1990’s and has been studied at the individual and organizational level (both man-made and naturally occurring organizations). Being resilient is the notion of positive adaptation when faced with significant adversity or environmental threats. This definition implies that significant threats or severe adversity is present and that the individual or organization positively copes with those threats. Being more resilient rather than less has been shown to lead to positive outcomes for both individuals and organizations. Under normal conditions, an organization who tracks it level of resiliency appropriately and maintains higher levels of resiliency will outperform the competition. It is important to note that resiliency has been found to be malleable, changeable over time if the correct measures are teamed up with appropriate change processes.  Protection from a loss of resiliency does not only involve the factors impinging at the moment, but rather the way the organization deals with risks and threats – processes which are potential inflection points in the organization’s life, and what they do in these stressful situations. 

Being able to maintain the resiliency of the organization and its level of functioning when environmentally challenged will be dependent upon:

1. The level of the threat or degree of risk that the organization is facing
2. The organization’s response to the threat or risk
3. The appropriateness of the measures that the organization is tracking
4. And the processes and mechanisms that the organization has in place to maintain those measures at a high level, including but not limited to:

• Processes that inform about the current status of risks (e.g. employee, customer and supplier surveys, the gathering and analysis of other business metrics)
• Processes that limit exposure to risk (e.g. maintaining currency, relevance and value of products/services, competitiveness, maintaining employee skill sets, developing employees to perform at higher levels, succession planning, standardization of critical procedures)
• Processes that promote situational and means efficacy (e.g. state-of-the-art business processes, procedures, and technology, development of supportive relationships and celebration of successful completion of goals)
• Processes that create new opportunity (e.g. innovative culture, R&D expenditure, reward & recognition systems)
• Elimination of negative chain reactions that can occur from one threat. (e.g. Johnson & Johnson’s Tylenol recovery strategy).

Overall a well-design organizational resiliency framework builds in a positive fashion off the outcomes that are traditionally cited as the marks of resilience in a person including reduced failure probabilities, reduced consequences from failures and reduced time to recovery. Organizational resiliency factors include:

1. Active attention to the environment in which the organization operates
2. Preparation for disruptions for the organization and its employees
3. Built in flexibility
4. Strong internal and external communications networks
5. Fostering an environment of innovation
6. Developing a shared vision of the future and a shared operating style to get there.

Additional factors that add to the resiliency concept by tracking critical components that have been linked to increasing organizational performance and the organization’s ability to achieve satisfied customers include:

1. Developing a confident, engaged workforce that does not take their success or customers for granted
2. Producing quality products and services that meet customers’ needs
3. Delivered with a customer service orientation
4. With perceived value in products/services
5. Fostering a disciplined growth orientation
6. Implementing effective business processes
7. Having effective leadership, and in general putting the right people in the right jobs
8. Developing a strong new product/services pipeline
9. Operating in a sustainable fashion
10. Operating with ethics and transparency.

© 2010 by Jeffrey M. Saltzman. All rights reserved.