Author: Alexandre Palma
The economic environment is increasingly characterized by instability and uncertainty. This instability is mainly due to various situations of social, political, or environmental upheaval that have occurred more frequently in recent years. Examples of this are the recent war between Ukraine and Russia and the emergence of COVID-19 which has paralyzed the world and the economy.
To cope with all this instability, it is necessary for each company to develop the ability to be resilient regardless of the situation to which it has been exposed.
For this there are three approaches that can be performed, the first is organizational routines, the second will be simple rules/heuristics and the last one is improvisation.
Organizational Routines – Organizational routines are often designed to help organizations reach their goals in a predetermined amount of time and at a predetermined cost. They also help to ensure that everyone in the organization is on the same page and working towards the same goals. Additionally, routines provide a means to identify and address problems that arise within the organization. By establishing a structure for identifying and responding to potential issues, organizations can ensure that any issues are quickly and effectively addressed. This approach is recommended when the “work” is predictable.
Simple Rules/Heuristic – In decision-making, a heuristic is an approach or practical method for reaching a solution to an ill-defined problem in a reasonable amount of time. A heuristic approach is based on experience, trial and error, and intuition, rather than on rigid formulas or established principles. Heuristics often take the form of heuristic rules of thumb that can help the decision-maker to develop a solution rapidly. For example, a common heuristic is the 80/20 rule, which means that approximately 20 percent of the effort will produce 80 percent of the desired result. Heuristics can be used to simplify complex decision-making processes and can help decision-makers quickly identify high-impact solutions. However, they are not foolproof and can lead to erroneous choices, so it is important to consider the context of the problem and use other decision-making tools as necessary.
Improvisation – Improvising can be a powerful tool for resilience, as it allows us to be adaptive and respond to changing circumstances. It also encourages us to be creative, coming up with solutions that are outside the box and that may be more effective than traditional approaches. In addition, it helps us to become comfortable with the unknown, which can be helpful in preparing for future crises. Improvising can also help build confidence and trust, as it allows us to work together and build problem-solving skills. This happens especially when we need to create creative efforts to address an opportunity.
Fluency and knowledge about these three approaches being used as a toolkit can improve organizational performance and enhance resilience. And this fluency becomes essential when an organization faces extreme uncertainly environments. We believe that the definition of a resilient organization depends on how easily teams can refashion specific tasks that need to be done.
So, when should we try each approach?
| Routines (Scripted work processes) | Heuristic (Rules of thumb that help simplify decision-making) | Improvisation (Spontaneous, ad hoc responses to a problem or opportunity) | |
| Example | “Follow this checklist to prep for surgery” | “Prioritize big-ticket client work in a crunch” | “Employees must stop working in the office immediately.” |
| Best When | You´re in familiar territory | You need to make decisions faster than usual | You`re on the uncharted ground with a high degree of uncertainty |
| Context | The environment is stable | Key assumptions remain valid; decision-makers previously understand the problems they encounter | Decision-makers need to experiment to figure out what will work |