What leads one person to the boardroom while keeping another person in the mailroom is the degree to which each can handle the demands of the job. In other words, the white-collar athlete grows and excels through challenges, while the office drone whines and declines. To drive a complex open system through dynamic environments, transformational leaders have to develop a high degree of resilience in the organization and its people; leaders usually cannot avoid or reduce stress, they must effectively manage stress for maximum performance.

Recommended reading: Harvard Business Review on Building Personal and Organizational Resilience

Harvard Business Review Senior Editor Diane L. Coutu (2003) provided some guidance on how to grow through challenging situations when she said:

More than education, more than experience, more than training, a person's level of resilience will determine who succeeds and who fails. That's true in the cancer ward, it's true in the Olympics, and it's true in the board room (p. 4).

In exploring why some people grow through challenges while others despair, Coutu discovered the nature of individual and organizational resilience, identifying the characteristics that set resilient people and companies apart from others, as follows:

• The capacity to accept and face down reality while developing proactive coping mechanisms. "When we truly stare down reality, we prepare ourselves to act in ways that allow us to endure and survive extraordinary hardship. We train ourselves how to survive before the fact" (9).
• An ability to find meaning in life [think Victor Frankl's Man's Search for Meaning, not Monty Python's Meaning of Life]. This translates into aligning people and processes to a common set of core values. "Some people see themselves as victims... hardship carries no lessons for them [while] resilient people devise constructs about their suffering to create... meaning" (9-10). "Values are just as important as meaning; value systems at resilient companies change very little over the long haul and are used as scaffolding in times of trouble" (12).
• The ability to improvise: "ritualized ingenuity". "The rules and regulations that make some companies appear less creative may actually make them more resilient in times of real turbulence" (17).

Coutu concluded by saying that

Resilience is a reflex, a way of facing and understanding the world that is deeply etched into a person's mind and soul. Resilient people and companies face reality with staunchness, making meaning of hardship instead of crying out in despair, and improvise solutions from thin air (18).

Organizational resilience

When competitive markets are relatively static, competitive organizations can rely on the strengths of their business models for survival. However, as the economic system becomes increasingly dynamic and dispersed, continuous change becomes imperative for organizational survival. Hamel and Volikangas (2003) argue that large organizations can no longer rely on momentum; their survival rides on their ability to adapt, change; success “rides on resilience” (p. para. 4). In a dynamic environment, resilience means more than just being able to bounce back from an occasional crisis, but effectively operating in a state of continuous crisis. This “strategic resilience” (para 5) is the ability to anticipate and adjust to dynamic environmental forces that threaten the system and is imperative for system survival in a dynamic environment.

References

Coutu, D. (2003). How resilience works. In Harvard Business Review on building personal and organizational resilience. Boston, MA: Harvard Business School Publishing Corporation.

Hamel, G., & Välikangas, L. (2003). The quest for resilience. Harvard Business Review.