Page 51 - The Resilient Organization

38 Part One: Why Resilience Now?

survival than competition because it is about the establishment. The very
word institution suggests staying power beyond momentary challenges.
Institutions tend to perpetuate almost purely by force of their having done
so in the past (they may of course still have some legitimate reasons to exist
too). They have become interwoven with the people’s and society’s every-
day life; they have acquired the right to exist. They offer the comfort of rou-
tine and apparent order. Institutions, as the recent banking crisis reminded
us, may also survive not because of their beneficial influences on the sur-
rounding society but because of their potential ability to wreak havoc
(hence “too big to fail”). Cambridge University, for instance, encourages
fierce competition among its constituent colleges, but it will not allow the
weak ones to fail. The richer colleges pay to support the poorer ones; thus,
Trinity College, the wealthiest, pays millions of pounds in institutional (or
“university”) taxes.
Therefore, according to the institutional logic, resilience is a matter of
the strength of legacy (the strength of the organization’s history) and its
institutional depth (the degree to which the organization is embedded and
interwoven into the society). Such resilience allows the institution to bene-
fit from and depend on resources beyond its own for survival.
The Second Etiology of Resilience

Legacy Institutional Depth Resilience (or Lack Thereof)
The danger of this structure is that when the institutional embeddedness is
very deep, should the organization fail, it may have a big impact on the sur-
rounding society, creating “systemic” damage. The society becomes collat-
eral to the institution’s failing. Again, the recent financial crisis is a shining
example of such failure—the trillion-dollar costs of which were paid by the
U.S. taxpayers alone.

Sheer Toughness

The third test of resilience is one of battle hardiness. Through toughness or
agility, an organization may have survived many confrontations that have
tested its mettle. Toughness is, at least in part, an earned quality. Armies are
tested in battles. The best companies look for competition to stay fit (and
tough). Toyota, despite facing formidable U.S. competition from GM,