The journey of resilient leadership

Building organizational resilience

The journey of resilient leadership: Building organizational resilience

Resilient organizations rapidly and successfully cycle through three phases—

Respond, Recover, Thrive—not just for COVID-19 but for every crisis. Here
are four actions to improve organizational resilience.

“Travelers, there is no road; This crisis is taking its toll on organizations and
individuals. In October, Deloitte and Fortune
you make your own path as surveyed more than 125 CEOs in the global Fortune

you walk.” CEO community who revealed that their four

greatest challenges during this difficult year have
— Spanish poet Antonio Machado1 been maintaining employee well-being, sustaining
innovation, addressing declining revenues, and

I
N 2020, RESILIENT leadership has been tested in engaging customers (see figure 1, from the Fortune/
the extreme, and the challenges continue. As I Deloitte CEO Survey2). Ninety percent of these
write this, many countries around the globe are CEOs have taken action to support their employees’
contending with the resurgence of COVID-19 and mental health over the past six months.3 Meanwhile,
the prospect of continued, new, and extended many organizations’ customers are in a similar
lockdowns—against a backdrop of social, political, frame of mind. In the most recent biweekly Deloitte
and economic upheaval that makes the terrain State of the Consumer Tracker, consumers in 15 of
even harder to navigate. the 18 countries surveyed globally identify as
health-anxious rather than health-hopeful.4
FIGURE 1

Fortune CEOs’ greatest challenges during the COVID-19 pandemic

In what area has your company struggled most during the crisis?

Growth concerns
Food, retail & textiles COVID
Customer engagement
Strategic realignment Policy/
Cash constraints Fundraising Regulatory
Lack of travel Logistic constraints
Declining revenues Engagement
Demand decline Commodity volatility
Employee well-being
Geopolitical issues Building relationships
Collaboration COVID regulations Problem-solving

Innovation
Realigned business models Agility

Productivity Weak demand

Supply chain challenges Burnout
Remote work/Virtualization
Macroeconomic volatility
Lockdown

Source: Fortune/Deloitte CEO Survey, October 2020.

Deloitte Insights | deloitte.com/insights

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 The journey of resilient leadership: Building organizational resilience

While promising results from vaccine trials— • Structures: Ensure that specific C-suite
perceived by global CEOs as the highest priority on members are accountable for the seven key
the path to recovery5—encourage us to set our elements of a resilient organization.
sights on a “better normal,” progress has been
more looping than linear. Regardless of where each When organizations, people, institutions, and
of our organizations is on the journey from society collectively thrive, the outcome is a
Respond to Recover to Thrive, virtually every CEO resilient world. It is intentional—not accidental—
I interact with agrees on one thing: The journey and we can shape the future by building
involves an ever-accelerating pace of change. resilient organizations.

Achieving a better normal is not just about having a

better map; it’s about having the nimble team,
“Resilience … is about
resources, and systems that enable us to thrive how we acknowledge,
respond to, and rise above
before, during, and after change (especially
adversity). It’s about having a resilient organization.
chaos, and how we act
In our article on the Recover phase, we said:
on the other side of that
Resilience is not a destination; it is a way of
being. A “resilient organization” is not one
disruption.”6
— Kevin Sowers, president of Johns Hopkins
that is simply able to return to where it left Health System and executive vice president of
off before the crisis. Rather, the truly Johns Hopkins Medicine
resilient organization is one that has
transformed, having built the attitudes,
beliefs, agility, and structures into its DNA Value-creating discoveries on
that enable it to not just recover to where it the trail of market disruptions
was, but vault forward—quickly.
COVID-19 has demonstrated how history moves in
What are the key executive actions on this fits and starts of great, eruptive change.7 Today,
transformation to resilience? concurrent epidemiological, economic, social, and
environmental discontinuities are individually
• Beliefs: Explore and leverage value-creating disruptive and collectively amplified as seismic
opportunities on the trail of the shifts in business and society.
pandemic’s disruption.
Resilient leaders know that responding to
• Attitudes: Model and lead your executive team disruption with agility is about more than survival.
and organization through the essential It’s about uncovering value. Discontinuities create
mindset shifts to navigate the path obstacles, but also open new paths for discoveries
to resiliency. and value creation. Market structures, business
models, ecosystem relationships, and customer
• Agility: Embrace collective agility by convening needs are dramatically reshaped, and the winners
a cross section of stakeholders to script the future. The same has been true during
codesign the answers to the COVID-19 market disruption (see figure 2).
company-critical challenges.

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The journey of resilient leadership: Building organizational resilience

FIGURE 2

Resilient responses to market disruptions

Major Major
discontinuity Resilient responses discovery

Accelerated the adoption of then-emerging technologies, including

telephonic versions of digital trends we see today, such as remote
Spanish flu epidemic, learning (newspapers cited high school students “holding a regular Changing market
1918 telephonic conversation with their instructors”)8 and what might structures
be called “t-commerce” (signs in store windows suggesting that
customers phone in orders amidst the pandemic).9

Post-WWII, Toyota Production Systems perfected its approach to

World War II,
minimal inventory and clustering of suppliers around assembly Ecosystems
1939–45
plants.

SARS outbreak, Accelerated the rise of e-commerce platforms in Asia due to Changing
2002–04 consumers’ reluctance to venture out.10 consumer needs

Three major structural changes in the retail industry continued and

even accelerated during this time: (1) the growth in e-commerce
(15% annually since 2009)11; (2) new entrants, including digitally Changing market
Great Recession, native, vertically integrated startups, European companies entering structures,
2007–09 the United States, and consumer products companies increasing Changing
direct-to-consumer offers12; and (3) a significant increase in discount consumer needs
retailers, which grew at 6% while traditional retail declined 5% during
the downturn.13

According to Deloitte’s biweekly global State of the Consumer Tracker

study14 (more than 17,000 consumers in 18 countries), consumer
preferences have changed on many dimensions. One example is
the change in preference from ride-sharing themselves (54% of
Changing market
consumers are limiting ride-share behaviors in 11 of the countries
structures
surveyed) to ride-sharing their food (more than half of consumers
globally are not feeling safe going to a restaurant); as a result, ride-
sharing services have rapidly shifted their market structure from
COVID-19, travel to food delivery.
2020

A Chinese footwear brand shuttered 2,000 physical stores during the

COVID-19 outbreak. The company quickly responded by expanding
its digital platform and turning store associates into online sales
New business
agents who reached out to customers to sell online. Company
models
executives also started livestreaming to sell products. The rapid
innovation and business model shift enabled the company to
dramatically increase online sales.15

Source: Deloitte analysis.

Mindset shifts to navigate the resilient leaders and their organizations must
path to resiliency embrace in the journey from Respond to Recover.
Turning your organization’s focus to Thrive
In our previous article on the Recover phase, we requires another set of such shifts with a further
described the important mindset shifts that focus on the future (see figure 3).

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 The journey of resilient leadership: Building organizational resilience

FIGURE 3

Mindset shifts required as leaders focus on Thrive

FROM RESPOND TO RECOVER TO THRIVE

Situation Unpredictable “Interim” normal “Better” normal

Attitude Reacting Reinventing Pioneering

Focus Inward-looking Market-facing Market-making

Planning Contingency
planning
Scenario
planning
Strategic
visioning

Management Crisis
management
Program
management
Agile
management

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights
The situation pivots from a tenuous interim longer-term strategic visioning—methodically
normal to actively pursuing a better normal. designing and embarking on the journey to the
Leaders must therefore chart their organization’s Thrive destination.
strategic destination as it emerges into Thrive. Our
Fortune/Deloitte CEO survey signaled key Management shifts from sustaining or surviving
elements of that better normal: 96% of CEOs said during Recover to building the resiliency and
that diversity, equity, and inclusion are strategic agility to return to business as unusual. The case
priorities, and 78% expect a consistent focus on for agile management is made by the 85% of global
sustainability and carbon reduction. 16
CEOs who said the crisis has significantly
accelerated digital transformation and the 40%
The leadership attitude shifts from reinventing who are redesigning their supply chains.18
ways of doing business in the interim to a
pioneering ethos, one in which you focus on
inspiring and empowering the team to follow you. Collective agility: Codesigning
the journey with the whole
During the Recover phase, the focus shifted from
system
internal to market-facing. Now, however, we shift
to market-making: How might we better contribute We often consider agility as describing a single
to the evolution in our existing markets? What new unit—whether an individual or an organization—
markets are emerging for us to own? Seventy-four moving quickly and nimbly to adapt to change. Yet
percent of the CEOs in the Fortune/Deloitte CEO today’s major issues require entire systems to be
survey expect the crisis to create significant new agile and adaptable. For example, systems of
market-making opportunities.17 attitudes, institutions, and behaviors have allowed
and exacerbated racial inequity. Climate change
Planning shifts from medium-term scenarios that has accelerated due in part to actions and
ensure financial and operational viability to true,

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The journey of resilient leadership: Building organizational resilience

reactions across a vast network of natural and stakeholders will be better positioned to
manmade systems. recover, and ultimately to thrive.

These are whole-system challenges that cannot be • Accelerates decision-making: Many

solved piecemeal; they require whole-system strategic development processes take place
answers. Today’s resilient leaders build resiliency serially, requiring more time to make decisions
by convening the full ecosystem to collaborate and and shuttle diplomacy to reconcile differing
define the journey together. In other words, it’s views. Assembling representatives of the whole
about collective agility. system to codesign together enables the
strategic work to be done in parallel, thereby
As my colleagues have seen in their work with reducing elapsed time and improving the
various client organizations, the accelerated organization’s ability to respond to rapidly
delivery of viable vaccines demonstrates this type emerging market conditions.
of collective agility across a whole system of
stakeholders. These might include: pharmaceutical To achieve these benefits, we engage a cross section
companies; government organizations such as the of an organization’s whole system in executive
European Medicines Agency (approvals), the accelerators such as collaboration labs in which the
Centers for Disease Control and Prevention participants codesign the answers to some of the
(vaccine handling, distribution, and tracking), and most perplexing, company-critical issues.
supply chain coordination (US distribution
through “Operation Warp Speed”); pharmaceutical Collaborative codesign is especially important
distributors; multiple for-profit and not-for-profit amidst the COVID-19 crisis: It can be both
health care systems; and multiple retailers with cathartic and energizing for people. Teams have
pharmacy services. been worn down by the seemingly endless
uncertainty, familial strain, health threats, and
Such collective agility invites a vertical and ambiguous loss19 that has characterized this
horizontal cross section of the system to codesign extended period of the virus.20 The very act of
the strategic destination, new business models, and inviting them to imagine a successful, thriving
the route. The advantages of such collaborative future state and the path to get there can be a
codesign include: source of hope and encouragement, restore a
feeling of control in the present, reduce stress,
• Requires less buy-in: Rather than an and sustain them.
isolated group of executives developing a
strategy they must sell to stakeholders, the
participants who are engaged in codesign have Embracing seven elements of
their fingerprints on the solution. They have a a resilient organization
vested interest in its success, becoming
cascading sponsors for the strategic decisions Based on our conversations with Deloitte’s clients
and their successful implementation. and client-serving executives around the globe,
we’ve found that the vast majority of
• Ensures an outside-in perspective: organizational needs cluster into one of seven
Intentionally engaging stakeholders outside the categories: strategy, growth, operations,
organization reduces the likelihood of narrow technology, work, capital, and society. We’ve
answers to challenges requiring a broader interpreted these needs as seven elements of a
perspective. Leaders who can leverage the resilient organization, and defined an outcome-
innovative thinking and resourcefulness of their based aspiration and focus for each (see figure 4).

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 The journey of resilient leadership: Building organizational resilience

FIGURE 4

Seven elements of a resilient organization

St
Resilient strategy
Define the transformation
journey and ambition

Gr Op Te
Resilient growth Resilient operations Resilient technology
Drive customer focus, Transform and modernize Accelerate digital
product innovation, and operations transformation
market/revenue growth

Wo Ca
Resilient work Resilient capital
Transform the work, Optimize working capital,
workforce, and workplace capital structure, and
business portfolio

So
Resilient society
Steward environmental and
social resources through
trust, response, governance,
and measurement

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

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The journey of resilient leadership: Building organizational resilience

Each of these elements needs to be strong At an individual level, five of the most common
independently. Taken together, the seven elements traits in resilient leaders are adaptability,
operate within a cohesive, interdependent web that preparedness, collaboration, responsibility, and
reinforces each of the parts and enhances the ethics (see Deloitte’s forthcoming annual
adaptability of the organization. Resiliency Report, a survey of more than 2,200
C-suite executives in 21 countries to be released in
We engaged with over 1,000 C-suite executives; January 2021). All five involve connecting:
analyzed their insights, questions, concerns, and Adaptability quickly connects resources to meet
initiatives around the journey to resiliency; and today’s challenges; preparedness connects
evaluated the highest-priority actions that leaders tomorrow’s resources to potential future scenarios;
were taking in each of the key elements. We collaboration connects the whole system; and both
mapped these actions to their typical C-suite responsibility and ethics connect individuals,
owners—those roles that had primary or secondary organizations, institutions, and society.
responsibility for the actions—to create a high-level
playbook for the resilient organization (see figure 5). Our mandate as resilient leaders is connecting
for a resilient world.

Connecting for a resilient The preposition “for” is small but powerful. Amidst
world this crisis and other great societal challenges, we
are reminded yet again that we have not arrived.
At an institutional level, value-creation discoveries, Guided by purpose, we are seeking for a resilient
mindset shifts, collective agility, and the seven world in the future.
elements bring together resilient organizations and
their ecosystems into an interconnected web of
resiliency and strength.

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 The journey of resilient leadership: Building organizational resilience
FIGURE 5

Resilient organization playbook

Roles most typically
responsible for the actions
Key elements

CHROd
COOb

CCOc

CSOe
of a resilient

CIOa
CEO

CFO
organization Key actions for resilient leaders
Anticipate new market structures, new business models, and R&D innovations • • • •
Articulate a clear vision of the strategy to Thrive • • •
Resilient strategy
Develop and launch the strategy, plan, and business model • • • •
Build and maintain flexibility of options as conditions change on path to Thrive • • • •
Anticipate new/emerging customer needs • • •
Resilient growth Capitalize on organic growth • • • • • •
Configure business model to deliver the required customer experience • • • •
Define the role of resilience and agility in the emerging model • • •
Resilient Orchestrate the recovery and resiliency of supply chains • •
operations
Migrate overall operations (including physical locations, operating model, processes, and
cost structure) to achieve the strategic vision
• • • •

Accelerate digital capabilities to enable growth, decrease costs, and progress further as an
insights-driven organization
• • • • • • •
Resilient Develop a technological infrastructure that can quickly adopt and adapt to new engagement
technology models
• • •

Minimize cybersecurity risk •

Align the work, the workforce, the workplace, and enabling technological infrastructure to
reflect the next normal and to accelerate to the destination
• • •

Provide the right talent experience and development opportunities to meet new customer
needs
• • •
Resilient work
Foster an inclusive culture and diverse workforce positioned for long-term success • • •
Develop a culture that promotes resilience through a focus on well-being and balance • • •
Align working capital, liquidity, and capital structure to support the strategic vision • •
Ensure adequate financing to maintain/grow the business •
Resilient capital Improve nimbleness of capital allocation methodologies to exploit new opportunities •
Rearchitect, remodel, or rebuild the entity structure • • •
Engage in advantaged M&A and managed divestitures • • •
Develop and activate a comprehensive strategy for environmental impact, response,
and measurement
• • • •

Set out and fulfill investor, societal, and stakeholder expectations • • • •

Resilient society Proactively address risks to the organization and its environment • • • •
Understand and determine the key drivers and dimensions of trust for the organization • • • • • • •
Incorporate and aggregate key stakeholder trust metrics so the C-suite team can monitor
and formulate action plans
• • •

a
CIO encompasses chief information officer, chief technology officer, and similar titles.
b
COO encompasses chief operating officer and similar titles.
c
CCO encompasses chief customer officer, chief marketing officer, chief revenue officer, and similar titles.
d
CHRO encompasses chief human resource officer, chief talent officer, and similar titles.
e
CSO refers to chief strategy officer, whose responsibilities may be subsumed by a CFO or a CCO depending on the leadership team structure.
Source: Deloitte analysis.
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The journey of resilient leadership: Building organizational resilience

Endnotes
1. Antonio Machado, “Traveler, your footprints,” in Mary G. Berg and Dennis Maloney (trans.), There Is No Road
(New York: White Pine Press, 2003).

2. The Deloitte Chief Executive Program, “Fortune/Deloitte CEO Survey: October 2020 highlights,” 2020.

3. Ibid.

4. Deloitte State of the Consumer Tracker, Deloitte Insights, accessed November 30, 2020.

5. The Deloitte Chief Executive Program, “Fortune/Deloitte CEO Survey.”

6. The Wall Street Journal/Deloitte, “Health care leaders elevate the role of resilience,” November 2, 2020.

7. Joseph Agassi, “Continuity and discontinuity in the history of science,” Journal of the History of Ideas 34, no. 4
(1973): pp. 609–26.

8. Harry McCracken, “How the telephone failed its big test during 1918’s Spanish flu pandemic,” Fast Company,
April 3, 2020.

9. Ibid.

10. Michael G. Jacobides and Martin Reeves, “Adapt your business to the new reality,” Harvard Business Review,
September–October 2020.

11. Deloitte, Deloitte Retail Volatility Index: How 100 years of conventional wisdom is being disrupted, 2016.

12. Ibid.

13. Ibid.

14. Deloitte State of the Consumer Tracker.

15. Experience of colleagues of the author.

16. The Deloitte Chief Executive Program, “Fortune/Deloitte CEO Survey.”

17. Ibid.

18. Ibid.

19. Punit Renjen, The perseverance of resilient leadership: Sustaining impact on the road to Thrive, Deloitte Insights,
August 6, 2020.

20. Mahmoud Jabari, “4 lessons for a radical rethink of leadership in the post-COVID-19 era,” Forbes, October 15,
2020.

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 The journey of resilient leadership: Building organizational resilience

Acknowledgments

The author would like to thank Brenna Sniderman for expert input on content and connections to
other Deloitte insights; Jennifer Lee for shaping/coleading our approach to helping clients become
resilient organizations; Elisabeth Sullivan for shaping the narrative; Junko Kaji for her production
guidance and insights; Brooke Prouty McNaul, Romain Dechamps, Kaustubh Dubey, Raj Tilwa,
Bonita G., and Aravind Raj S for insightful research; and Blythe Hurley and Molly Woodworth for
expert production and design.

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The journey of resilient leadership: Building organizational resilience

About the author

Punit Renjen

Punit Renjen became Deloitte Global CEO in June 2015, and was reelected in 2019. Deloitte operates in
150 countries, with more than 300,000 professionals and 2019 revenues of US$46.2 billion. Renjen is
also a member of the Deloitte Global board of directors.

As Deloitte Global CEO, Renjen set in motion a global strategy to achieve undisputed leadership in
professional services. In his first term, he led collaborative strategic efforts that resulted in more
consistent experiences for Deloitte’s clients, professionals, and communities. Under his leadership,
Deloitte launched WorldClass—a global effort to prepare 50 million futures for a world of
opportunity—based on the belief that when society thrives, business thrives.

Prior to his current role, Renjen served as the chairman of Deloitte LLP (US member firm) from 2011–
2015. As chairman, he led the board in providing governance and oversight on priority matters such as
firm strategy, operations, risk mitigation, and talent development.

In 2020, Renjen was awarded the Oregon History Makers Medal by the Oregon Historical Society in
recognition of his visionary business leadership. Outside of Deloitte, he is a member of the Business
Roundtable and the International Business Council of the World Economic Forum. He also serves as
the member of several not-for-profit boards, including the US-India Strategic Partnership Forum (vice
chairman). Previously, he served as the chair of the United Way Worldwide.

Renjen was born and raised in India. He moved to the United States on a Rotary Foundation
scholarship to attend Willamette University, where he earned a master’s degree in management; he
previously served on the Willamette University board of trustees. He is married and has a son.

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 The journey of resilient leadership: Building organizational resilience

Contact us

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For client inquiries, please contact covidclientpmo@deloitte.com, and our PMO will refer your question
to the appropriate resource within Deloitte.

Bill Marquard
Global COVID-19 client response PMO Managing director | Deloitte Consulting LLP

Bill Marquard serves C-suite executives and boards on strategy and leadership issues. He has been a
Fortune 200 C-level executive, served on the faculty of Northwestern’s Kellogg School of Management,
and also leads Deloitte’s Global COVID-19 client response. He resides in Evanston, Illinois.

Combating COVID-19 with resilience

Connect with our COVID-19 client PMO for help at covidclientpmo@deloitte.com.

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