The CEO as chief resilience officer

Resilience is critical in today’s organizations, given the state of uncertainty and permacrisis in which most teams and individuals operate. Yet McKinsey research suggests that many leaders and organizations aren’t spending enough time building that resilience. A full 84 percent of leaders report feeling underprepared for future disruptions, and 60 percent of board members say their companies are not ready for the next major event.

According to the authors discussions with global CEOs reveal that most remain focused on addressing acute and unexpected situations affecting their businesses. These include big crises such as changes in global trade policy, conflicts in Europe and the Middle East, and other ideological and geopolitical disruptions that end up having downstream financial and operational consequences. They also include smaller disruptions such as stock price fluctuations or product flaws.

While time is always a constraint for CEOs, they must nevertheless be intentional about investing in and building resilience, which we define as the ability to prepare for, respond to, and take advantage of disruption. Research shows that nearly half of a company’s performance is tied to the CEO’s leadership.  And while other leaders also contribute to the development of organizational resilience—including the chief risk officer, the CFO, and the chief HR officer—only the CEO has the holistic perspective to assess the level of resilience in the organization, increase it, and integrate it into the organization’s DNA.

According to the authors in their view, there are four core types of resilience—financial, operational, organizational, and external—and CEOs must understand all of them to strengthen their resilience muscle effectively.  With a greater understanding of these different dimensions of resilience, CEOs can take five actions to make their institutions stronger and less susceptible to shocks. 

1. Embed resilience in the company’s vision. Create an inextricable link between the organization’s strategy and its levels of resilience.
2. Build full-body resilience. Pay attention to all the resilience dimensions in an organization and assess how and where they compensate for and reinforce one another.
3. Force decisions with senior leaders when resilience is on the line. In the most critical moments, intervene directly, emphasizing the importance of resilience in daily decisions and strategic initiatives—even forcing the issue where needed.
4. Cultivate a gritty team and invest in individual resilience. Hire and develop people who show adaptable traits and behaviors, are open to challenges, and commit to these characteristics and practices—then serve as a role model for them yourself.
5. Create deeper relationships with a diverse set of external stakeholders. Anticipating future disruption, build strong partnerships that will allow the organization to rely on external stakeholders for support when that change occurs. These alliances can be particularly critical when companies are exploring bold shifts in strategy in response to internal or external events.

According to the author, they believe CEOs who prioritize these five actions and champion resilience in their organizations can more easily capture near- and midterm opportunities for growth—and are much more likely to build lasting, future-ready businesses.

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