Like people, organizations are living entities that need a certain level of care to stay healthy. And just like the human body, an organization’s health (its culture) may coast along fine for a while. But if its health is abused (business corruption) or neglected, with attention focused on immediate gratification (quarterly profits) instead of long-term health (strategic planning, corporate governance, continuous improvement, etc.), then the health of the organization will begin to decay.
Consider how the human body deals with infection. When a foreign entity mounts an attack, it triggers an automatic response from the body’s immune system. White blood cells attempt to fight the intruder based on memories of foreign entities the body has encountered before. If it’s a familiar intruder, the cells know what to do. If they fail, however, the wise person seeks an expert opinion and follows the recommended steps (medication, life changes, surgery, etc.) to recover.
Organizations are the same. If the health of a business is neglected, it’s likely that the business is also lacking an immune system to defend it against attacks (external variables such as financial rate fluctuations, supply chain damages, system and network failures, natural catastrophes, etc.). Without a defense system in place, attacks might even go unnoticed for a while. When a problem is discovered, the organization’s cells (its people) scramble to resolve the issue using the same thinking and tools that worked in the past. If they’re lucky, and if the damage isn’t too great, they succeed. If not, the organization limps along inefficiently, much more vulnerable to the next attack.
So what’s the lesson here? Simply put, businesses will not survive the current economic upheaval unless they focus on long-term health, and put an effective immune system in place. In the GCC especially, many businesses, with some exceptions in the oil and gas industry, are young and inexperienced when it comes to dealing with a crisis of this magnitude. Having never encountered depleted cash flow, tumbling energy prices, denied credit, a faltering real estate market and diminished tourism, GCC businesses have not yet built up an immune system that can respond quickly and effectively to such attacks.
In ‘The Living Company’ (Harvard Press, 2002), researcher Arie De Geus writes that the longest-surviving companies have several qualities in common. First on his list? The organization’s ability to learn and adapt. De Geus calls on organizations, particularly Human Resources, to be strategic in their approach to long-term survival. What does strategic adaptation entail? It will differ for every organization. In part two of this post, I’ll share a couple excellent examples of companies that have adapted strategically and survived tough times.
