The Resilient Blog

Why We Must Focus on Corporate Resiliency

In the world in which we now live, companies must be resilient to survive and thrive. They must be resilient to protect and preserve their shareholder value and stakeholder interests. That includes preserving business profits, market share, and jobs. And in the case of companies that operate critical infrastructure assets, the physical and economic security of the country. Thus being resilient is a responsibility on multiple levels.

We are not where we must be. In fact, the notion of being resilient is finally getting the very serious consideration that will drive companies to take specific steps to achieve and maintain high levels of resiliency.

The events that can do serious harm to are too numerous to identify and apply specific point protective measures. Consider what is out there to wreak irrevocable harm to corporations—not just threats, but also missed opportunities. The list can begin with terrorist threats, disgruntled employees, corporate sabotage, internet threats, non-compliant employees, out-dated processes, natural disasters, and substandard performance. We must all accept that 100% protection and security is unattainable, but maximizing resiliency is a must. It’s time to focus on being resilient against any reasonably anticipated scenario.

Resiliency is an organization’s capability to maintain its functions and structure in the face of internal or external change, and to respond positively when it can or to degrade gracefully when it must – consistent with its business interests and investment capacities. Resiliency has become the practical response to the need to address a combination of security, preparedness, risk, and survivability issues in an integrated way.

Being resilient is a proactive and determined attitude to remain a thriving enterprise. It moves beyond a defensive security and protection posture and applies the entity’s inherent strength to withstand crisis of any nature. For companies, being resilient becomes a competitive differentiator as the more resilient company is a more reliable business partner and should provide a higher level of stakeholder and shareholder value.

Resiliency is emerging as an empowering paradigm. A resilient organization’s capacities to deflect crisis, absorb their effects, and respond positively also allows it to maximize its abilities to identify and pursue new opportunities, and operate effectively in normal times. In today’s world, the events that impact an organization’s resiliency are asymmetrical, constantly evolving, and rapidly impacted by technology improvements. Thus resiliency must be an underlying management construct within a business operation.

There are no current governmental or regulatory mandates for resiliency. But the motivations for industry leaders to address resiliency are compelling. Resiliency and the management of resiliency makes good business sense. The company’s resiliency posture should be relevant to insurance considerations and financial investment considerations, providing an economic incentive. Eventually, levels of resiliency will be indicative of the health and viability of a publicly-traded company, therefore a reportable condition to regulatory bodies. And finally, for critical infrastructure asset owners and operators, the importance of their company’s resiliency level to infrastructure resiliency is sobering and worthy of addressing.

Whether the crisis stems from a security breach, a natural event, or an unexpected business shock, the resilient organization will be well positioned. Costs impacts should be minimized. Reputation hits should be soft and managed. Confidence blows will be fleeting. Jobs will be saved and the nation will be more secure.

We have a long way to go.

Resiliency paradigms should be adopted by all major companies. There is clear business value to implementing a resiliency management process. There are additional benefits for those organizations that own or operate critical infrastructure assets, as their level of resiliency impacts the resiliency of a geographic region, an industry segment, and ultimately, the nation. Put simply, we cannot have a resilient nation without first having resilient corporations.

Darryl Moody

What Does It Mean to Be Resilient?

I get this question often.  There is no consensus answer or a standard.  I highly doubt that a standard definiton wil ever emerge.  The term "resilient" or "resiliency" is just too useful in far too many situations.  It's one of those "You know it when you see/feel it."  But that won't stop people from trying to pin down a definition.

What I find is that within the various elegant and sometimes artistic (or articulate) definitions being offered, there are some common elements.  The introduction of change or disruption is usually conceded as the call for resiliency and triggering event.  And the ability to survive or bounce back to previous state is the second seemingly universal element.  What immediately jumps to mind is the old Timex watch branding of "taking a licking and keep on ticking."

Resiliency definitions, particularly applied to business situations, will need to get more specific.  For those of us interested in increasing levels of resiliency across the business community, we can't afford to have every conversation starting out with a debate on the basic meaning of the word. 

From time to time, I will post and comment on various definitions of resiliency I see offered  I am paricularly interested to see if the definitons become more narrow or more diverse.

Resilience Day CEO Summit and Symposium

On June 25, the Council on Competitiveness hosted a wonderful event in Washington, entitled Resilience Day.  Te event included a CEO Summit on Capitol Hill, a newsmaker luncheon at the National Press Club and carried on C-SPAN, and an afternoon symposium held at the Department of Commerce.  I believe this event can be seen as a watershed event in the adoption of the resiliency paradigm in corporate America. 

The CEO Summit was significant in that it garnered the direct participation and leadership of Mr. Chad Holliday.  CEO of DuPont.  Mr. Holliday’s obvious engagement with the resiliency issue and the project conducted by the Council on Competitiveness lends great credence to the resiliency cause.   Joining him were senior executives from leading companies  and acadmic institutions like AT&T, Oho State University, and FM Global.  The message was not lost that the event was held on Capitol Hill, but was clearly an Industry led addressing of resiliency.   Government has a role, but I personally believe it is more observing and encouraging at this moment in time.  Industry should seize the lead, like it did at this symposium.

There were no answers or great revelations during the conference— not to those of us who have been in the midst of resiliency discussions over the past few years.  What was of note was the lack of dissenting viewpoints on resiliency.  I suppose this could be considered general acceptance of the concept.   It was also interesting to note that there are numerous variations on the theme of what resiliency means and what ought to be done about it.  And there are more questions than there are  hard and fast answers—at this time. 

The Resilience Day events drew a large and diverse audience of business leaders and practitioners who were treated to great discussions and some practical advice.  I would certainly encourage the Council on Competitiveness and other thought leading institutions to sponsor more such events.

Levels of Resilliency

There are multiple levels of resiliency that are important to consider and deal with.

There's the National level which deals with major national level infrastructures that cross regions of the country and link the country to the outside world. Those include the transportation systems, ports and shipping, power grids, water systems, and transmission systems. Key considerations are the points of intersection between infrastructure elements and the maintenance of clear delivery pathways across the nation.

There's the Regional level which considers the delivery of the services and products to consumers at local levels within and outside specific jurisdictional boundaries. Those include the utilities and power systems, some public safety, health care, waterways and flood protection. Key considerations are relative levels of performance of those infrastructures, the logical and physical interfaces between them, and the elimination of unacceptable gaps.

There's the Corporate level which considers the specific actions and capacities that individual companies must have in place to positively respond to a crisis situation. Those include its risk management processes, crisis and disaster management capabilities, supply chain management capabilities, and a full range of physical and logical security activities. Key considerations are the level of capability the company can bring to bear to maximize its chances for surviving and thriving in the face of a crisis. Also considered are the identification of critical deficiencies in those companies (or industry segments) that are in the regional/national resilience value chain.

In addition to the above three levels, resiliency is being addressed at the Community level and the personal levels. At that level, the focus is on individual preparedness and survivability and how that aggregates to a community’s overall preparedness. Key considerations are the training and awareness provided to individuals and the effective planning and coordination between public sector agencies and the private sector. This level also considers many psycho-social aspects of survivability and response in the face of crisis situations (usually a major disaster or traumatic event).

As the subject of resiliency increases in prominence, all levels must continue to be dealt with in a vigorous manner. I submit that the Corporate level offers a key lynchpin and leverage point that will affect the resilience up and down the line.

Darryl Moody
President / COO Resilient Corporation

Resiliency Feature in Fortune Magazine

We would like to call your attention to the March 1007 edition of Fortune magazine. Resilient Corporation is honored to be included in this feature on resiliency along with the Council on Competitiveness, Wal-Mart Corpration, DuPont, Georgia Institute of Technology, University of Western Ontario, Georgetown University, and NASDAQ.

http://www.timeinc.net/fortune/services/sections/fortune/corp.html

Darryl Moody
President/COO Resilient Corporation

Flynn: U.S. not prepared for the next 'big one'

http://www.cnn.com/2007/US/02/20/flynn.commentary/index.html

NEW YORK (CNN) -- Americans have failed to learn the most important lesson of 9/11 and Hurricane Katrina: We need to make building resiliency from within our borders as urgent a priority as confronting dangers from without.

There would have been thousands of more victims in New York on September 11 if the city had not made significant new investments in emergency management and if the Port Authority of New York and New Jersey, which owned the World Trade Center, had not conducted regular fire drills, improved the emergency lighting and applied photoluminescent markings on stair treads and handrails in the stairwells of the twin towers. It was New York's investment in resiliency after the 1993 World Trade Center truck bombing that made that tragic day in 2001 far less tragic.

Today, New Orleans would have long ago recovered from Hurricane Katrina had the city's flood control system not been so badly neglected. But throughout the 1990s, the funds that might have been used to repair and strengthen the levees and flood walls were routinely bled off for other projects. In 2004, when the U.S. Army Corps of Engineers asked for $22.5 million to make emergency repairs to the storm protection system in New Orleans, the White House cut that figure to $3.9 million. It was New Orleans' lack of resiliency in the face of a foreseeable natural disaster that produced a catastrophe that has practically destroyed a great American city.

Building resiliency requires three things. First, we must anticipate likely man-made or natural disasters. Second, we must be willing to take prudent actions in advance of these disasters that lower our exposure to their potentially catastrophic consequences. Third, we must be able to mobilize a speedy response and recovery after disasters occur.

Ninety percent of Americans now live along the coast, near flood zones and earthquake fault lines, or in other locations that are at a high or moderate risk of being hit by a major natural disaster. But since 9/11, we have been acting as though the only serious threat we face is terrorism and that the only way to manage that threat is by military efforts abroad. When an aggressive offense against terrorists is our only defense, homeland security and planning for natural disasters end up as lesser priorities.

This is insane. Sure we should be confronting our enemies when we have the intelligence to tell us where they are and what they are up to. But our intelligence apparatus is badly broken and the terrorist threat is a rapidly mutating. We need only look to the 2004 train bombings in Madrid, Spain, and the 2005 attack on the London subways to remind us that the al Qaeda threat is not confined to the Middle East and that all acts of terror cannot be prevented.

More importantly, Americans are far more likely to be caught in the cross hairs of a major natural disaster such as an earthquake, flood, forest fire or a hurricane than an attack by terrorists.

No act of modern warfare, with the possible exception of a nuclear exchange between major world powers, has the potential to threaten as many lives and cause as much disruption to the global economy as the H5N1 avian influenza would if it makes the evolutionary leap that allows it to spread among humans as quickly and as lethally as it has among birds. Of the just over 100 documented human infections between 1997 and 2005, the mortality rate was 54 percent. With a flu outbreak leading to a projected 80 million illnesses in the United States, millions of Americans would be in need of hospital care, but our entire national inventory of staffed hospital beds is just 970,000.

Acts of terror and disasters cannot always be prevented, but they do not have to be catastrophic. The key is being willing to invest in things that are not particularly sexy, such a public health, emergency planning and community preparedness.

It requires that we repair frail levees, pipelines, dams and the electrical grid. And we also need to learn from disasters and near misses. Californians adopted a new construction code after the 1906 San Francisco earthquake. New Yorkers took evacuating skyscrapers seriously after the World Trade Center was attacked in 1993. Adequately preparing for foreseeable events is the only way for the United States to step back from the edge of disaster.

The Language of Resiliency

As Darryl noted in his introduction to The Resilient Blog, our company believes resiliency is a comprehensive and strategic management paradigm that has many components, all of which encompass the traditional domains of risk management, continuity of operations, emergency management, et al.  But the language of resiliency is something everyone needs to focus on, as it will drive our attitudes, policies, practices and, eventually, our laws and regulations, regarding resiliency.

A recent national newscast described in new efforts to recruit all employees of an airport as "eyes and ears" for airport law enforcement and Homeland Security.  NBC News, Miami International Airport  It was describing what many would recognize as a simple "neighborhood watch" program for an airport.  Such a concept is fine, but in the language describing the initiative, the airport's program manager spoke of the effort to make the airport "one hundred percent safe."

Such language is a disservice to not only the concept of resiliency, but to the public, firefighters, police officers, and all employees and consumers of airport services. No airport can be 100% safe.  Such expectations unrealistic.  An expectation of "one hundred percent safety" will drive exorbitant and ineffective spending, and, ultimately, increased cynicism in government when all of the spending and policies fail to prevent a disaster, natural, man-made or an act of terrorism. 

Governments, businesses, communities, and families must focus on being resilient, and not pretend we can be immune to the effects of disasters, natural or man-made.  Words mean things, and being resilient calls for close attention to the lexicon we use in debating and making public policy about preparing for, responding to, and mitigating against threats, from whatever source.

Michael D. Brown
Director, Emergency Management Programs
The Resilient Corporation

Welcome to the Resilient Blog

Welcome to the Resilient Blog, hosted by Resilient Corporation.  We are very excited to facilitate discussions of various subjects in the area of business and corporate resiliency.  Our company is dedicated to helping corporations assess their levels of resiliency and be positioned to take action that enhances their overall levels of resiliency.  We believe this is a critical shareholder value issue for Corporate America that also has significant benefits to enhance the national levels of preparedness and security.

Resiliency, we believe, is a comprehensive and strategic management paradigm that has many components.  These components are addressed individually by many communities in the academic, business consultancy, regulatory, industry group, and policy arenas.  For the most part, each of the communities have addressed resiliency as a natural evolution and growth of technical domains such as risk management, legal/regulatory compliance, disaster/crisis management, information security, supply chain redundancy, or human capital management.  We believe there time has come to weave these concepts in a manner that provides a useable context to which all key facets of the company can relate and rally around.  This is a key value characteristic of resiliency.

We intend to use this Blog to communicate with members of the communities engaged directly and indirectly with resiliency.  We hope to learn from the participants and to regularly contribute to the dialogue on resiliency as it matures and becomes rapidly adopted.

Welcome to this Blog!

Darryl Moody

President/COO Resilient Corporation