3 Minutes ERM: RESILIENCE

the link between sustenance resilience and ERM
a schematic representation how sustenance, resilience and ERM are linked.

resilience, erm, sustenance

What is RESILIENCE and how does it interlude with ERM and SUSTENANCE? There is no one size fits all answer to this question.

Consequently, each entity needs to spend some quality time to define the terms. When engaging in this process, it is important to hold this conversation early to avoid confusion and set backs at later stages of any activities that relate to these terms. Furthermore, clarity of aspirations and outcomes are important. All stakeholders should be clear about “why are we even having this conversation”.

Asking the right question is sometimes more difficult than finding the right answer.

defining resilience is difficult to answer…

I find it helpful to look at RESILIENCE, ERM and SUSTENANCE in a Venn diagram illustrating the relationship and overlap between the three of them.

  1. “sustenance” describes the overarching ambition for most, but not all, businesses.
  2. “resilience” and “erm” are two very important – but by no means – the only concepts to support an organization in achieving sustenance.
  3. I look at ERM as a sub-group of resilience, because ERM is more focused with ex-ante considerations, whereas resilience covers ex-ante and ex-post considerations.
  4. I am cognizant that the two terms overlap, hence a commonly agreed definition as outlined earlier is important.

being resilient

A resilient organization has developed, practiced, and is constantly improving the necessary hard skills. Hard skills are processes, procedures, continuous learning and improvement. These skills are “rehearsable”, if such a word exists in English.

Secondly, a resilient organization possesses a range of important soft skills. Specifically, flexibility, creativity, commitment, and a high level of staff engagement. It is very difficult to rehearse such skills. They are best nurtured as part of the overall company culture.

an example

I have been thinking about an example to illustrate the above. Ultimately, I decided to use an analogy from sports, because sport is a topic that most of us can either actively or passively relate to rather easily.

re-silire: to recoil or to rebound

Classic risk management in sports encompasses considerations such as

  • avoiding injury through proper training and appropriate resting
  • the use of adequate equipment
  • post strain routines such as massages and physiotherapy
  • practice in suitable environments

Resilience, on the other hand answers the question: how do I quickly get back to competition – preferably even as a stronger athlete – after an injury?

Resilience is NOT business continuity management!

An insured sports person is out of competition for some time. There is no short-term back-up plan for that athlete and no outsourcing option either. In other words, immediate continuation of the activity is under most circumstances not desired.

in sports

The intrinsic and extrinsic motivation to continue is a key driver to resilience – how eager is the athlete to get back to competition. Think about this “hunger-like” term the context of your organsiation.

Secondly, you cannot really rehearse “getting injured”. Having said, some mitigation techniques (such as attenuating the impact of a fall or rapid access to good quality medical care) are good resilience skills. The overlap between ex ante risk management and resilience becomes very evident.

A high-quality external infrastructure supporting the recovery process is crucial. Whilst an athlete has some influence on this by choosing a training location close to medical facilities. Having said thah, the quality of that medical system is outside the athlete’s influence.

Lastly, a high level of general fitness – aka a good baseline – is an important driver behind recovery, too.

it’s challenging

Not doing anything or blindly adapting some e-researched routine doesn’t help. Reach out to us via the contact buttons below to find out more.

More articles in our “3 Minutes ERM” series are here.

references

https://www.researchgate.net/publication/424