Good Leaders Have Resilience

Last article, I introduced the ARC of Leadership concept. It’s a framework I developed and use to help good leaders become outstanding ones. By mastering the “human” elements of leadership-an Awareness of your strengths/weaknesses and how you are perceived by others, a Resilience to difficulties and change, and a Connection to stakeholders-executives and managers like yourself can achieve a higher level of performance.

In this article, I’ll explain how the element of Resilience makes you a better leader, and go into detail on the first of four critical fundamentals you’ll need to master.

Resilience refers to your ability to overcome difficulties and use defeat or failure as a springboard to even greater success. It’s a very fast-paced world today. Change happens all the time, and as the pace of change and complexity accelerates, there is a greater chance of failure. Think of Nortel, Yahoo and RIM-just a few years ago, they dominated their industries: now, they are gone or struggle to remain relevant. Constantly changing demographics, technology, competition and growing globalization have taken a heavy toll on them.

So how do leaders keep their business relevant and competitive in these turbulent and fast-paced times? They must be aware of their leadership strengths and weaknesses, and, they must be resilient. Leaders who can bounce back and lead in new directions, show empathy, are transparent in difficult times and can find ways to see opportunities in a chaotic market are the winners of today and tomorrow. One thing you can bet on is that change will accelerate and become more complex. As a leader, if you can “master” or capitalize on change by creating a nimble and adaptable organization, your have created a tremendous advantage for your company.

To master change, leaders must consider four fundamentals within the element of Resilience:

1. Proper risk management
2. Effective personal “brand” alignment
3. Prompt reaction
4. Timely execution

Resilience Fundamental #1: Proper Risk Management

Your first step to increased resilience is to master your risk management skills. Preparation for a difficult moment or change helps you navigate an obstacle much more easily. Increased confidence and clarity of thinking will allow you, the leadership team and your company, to take swift action as it recognizes opportunities lurking within the risk.

Consider the following real-life example. A chip manufacturer had a fire in one its major plants. The cleanup and repairs were estimated to take minimal time with a minimal impact to their customers-mainly cell phone manufacturers. Unfortunately, it took NINE months for the plant to resume full productivity. The repercussion of this event was very favorable for one of their clients and devastating to another. Why?

Because Company A managed the risk and made alternate plans, while Company B decided to wait until the chip manufacturer was back on track with production. Instead of sitting back and assuming the supply interruption would be quickly fixed, Company A worked closely with their supplier and understood that the supply lines would be affected for a significant amount of time. By assessing the risk, they recognized from the beginning that unless they sourced parts from other plants, they themselves would face grave production issues. As a result, they realigned their supply chain to the supplier’s sister plants and other chip plants and their chip supply was uninterrupted for that nine months. By the time the executives at Company B learned that the “short interruption in supply” would take months and months to fix, all available supplies from the supplier’s sister plants and other competitors were already committed to Company A. By not understanding the risk and managing it proactively, Company B was hopeless to replace the production with other suppliers and they lost a tremendous amount of sales, momentum and market share. This is a great example of how a resilient company properly managed the risk and used it to their advantage.

In order to increase your risk management capabilities, consider the following lessons from the above example:

• Education and knowledge is critical: Company A knew the ramifications of having a supply interruption, so they investigated to learn as much as they could about the situation. The more you know about the market, the people, the products and the services you are offering, the more you can react successfully to change and risk. Information gathering-internal and external information and intelligence-also allows you to recognize the market shifts or situation shifts and prepare accordingly.
• Manage your Business Relationships: By working closely with the supplier, Company A understood that “minimal impact” to their supply chain was unlikely and therefore needed to change suppliers. Proper Business Relationship Management (BRM) like this, provides an incredible advantage during critical transitions or times of change. The more you can leverage your current relationships to help your company, the more efficient the reaction. During times of “calm”, that is when you need to plant the seed and “nurture” new and existing relationships with suppliers, partners, clients, staff, etc.
• Have a “Mitigation Plan” in place: Securing alternate suppliers gave Company A a huge competitive advantage over Company B. As you gather information and knowledge, mitigation planning will help you react and execute faster, with better clarity.

As the leader within your team or company, it’s critical you instill resilience within your organization. Risk Management is the first fundamental of Resilience. I encourage you to focus 5-10 minutes a day in exploring this fundamental and gathering the information you need to manage your risk.

Next article we’ll explore Resilience fundamentals #2 and #3: effective personal brand alignment and prompt reaction. If you need to brush on the element of Awareness, discussed last article, please click here. Until then, be amazing!