Transcript Resilience vs. Recovery - Montague Risk Management

LA42: Resilience vs. Recovery
What Does Resilience Mean for Business
Continuity?
Kathleen A. Lucey
[email protected]
www.montaguetm.com
Tel: 516-676-9234
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A few definitions...
From 1913 Webster’s Dictionary, resilience is:
“The act of springing back, rebounding, or
resiling, as the resilience of a ball or of
sound.”
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More definitions...
“The power or inherent property of returning to the
form from which it is bent, stretched, compressed, or
twisted.” – of objects or substances
“The power or ability to recover quickly from a
setback, depression, illness, overwork, or other
adversity.” – of people
“The ability of a system to keep working with one or
more of its components malfunctioning. Also called
Fault Tolerance.” - of systems
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Use by Business Continuity
 Interagency White Paper on Sound Practices
to Strengthen the Resilience of the U.S.
Financial System, (draft: Sept 2002, Final:
April 2003)
 Designed to address the “systemic risk” to the
U.S. Financial System in an event such as
9/11.
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Use by Business Continuity
 Interagency White Paper Objectives:
• Rapid recovery and timely resumption of critical operations following
a widespread disruption
• Rapid recovery and timely resumption of critical operations following
the loss or inaccessibility of staff in at least one major operating
location.
• A high level of confidence, through ongoing use or robust testing, that
critical internal and external continuity arrangements are effective and
compatible.
Resilience = confidence in the rapid
recovery and timely resumption of
critical operations.
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From the Social Sciences
Community (1)

Report: Crisis, recovery, innovation: responsive
organization after September 11, John Kelly, David Stark.

Based on analysis of responses from participants in 9/11
recoveries.
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From the Social Sciences
Community (2)

Success factors:
1.
Social networks: strong personal ties.
2.
Sociotechnological networks. Communications interface between
people and technology.
3.
Preparedness and redundancy: generative vs. replicative
4.
Heterarchy and interdependences: functional empowerment
Resilience may dictate many of the same
organizational characteristics as are used to foster
innovation and prosper through uncertainty.
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From the Social Sciences
Community (3)

The organization of responsiveness: innovation and
recovery in the trading rooms of Lower Manhattan. Daniel
Beunza, David Stark.

Also based on analysis of responses from participants in
9/11 recoveries.
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From the Social Sciences
Community (4)

Success factors:
1.
2.
3.
4.
5.
6.
Responsiveness to a crisis is a combination of anticipation and
improvisation.
Responsiveness is grounded in “resourceful recognition.”
Social relationships are a key feature of organizational response.
Lateral extended social ties to external partners are particularly
important
Both generative and replicative redundancy are necessary.
Geographical dispersion is a necessity.
Generative preparedness may also contribute
to organizational efficiency.
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From the Social Sciences
Community (5)

5 Habits of Highly Reliable Organizations, Keith H.
Hammonds.

References the work of Professor Karl E. Weick of
University of Michigan at Ann Arbor.
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From the Social Sciences
Community (6)

Characteristics of HROs:
1.
Obsess over failures and mistakes, not successes.
2.
Listen to the front line.
3.
Find the solution in the unexpected or crisis circumstances.
4.
Embrace complexity.
5.
Create resilience: actively anticipate how to avoid mistakes + see,
understand, and adapt to unforeseen reality
If this seems a lot like the two 9/11 response
analyses, you are on the right track!
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What does this mean for
Business Continuity?

Resilience characteristics:
•
Inherent to the organization.
•
Related to innovation
•
Related to heterarchy: personal and organizational

Measuring preparedness is difficult, but success may
depend as much on generative, as replicative redundancy.

The most effective management style for a crisis is probably
NOT the military model of a rigid hierarchy.
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We Need to Change!

BC needs to be placed at the Board level: Organizational
Resilience will NOT happen from inside of IT.

BC needs to manage heterarchically across the entire
organization.

If resilient behavior emerges by responding, much more
ambitious ongoing test programs are necessary: with
suppliers, distributors, customers.

But most of all, we need to learn ourselves to help our
organizations learn.
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We Need to GROW!

Accept that we are not the “Masters of the Universe.”

Study new developments; stay open to new ideas.

Connect to related disciplines: emergency management,
information security, facilities, infrastructure and physical
security...and organizational theory!.

Learn about reliability.
THE GOOD NEWS: Resilience is becoming
more and more important to a firm’s success!
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References (1)



Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S.
Financial System, Board of Governors of the Federal Reserve System; Office
of the Comptroller of the Currency; and Securities and Exchange Commission.
Draft (Sep 2002): http://www.sec.gov/rules/concept/34-46432.htm
Final (Apr 2003): http://www.sec.gov/news/studies/34-47638.htm
Report: Crisis, recovery, innovation: responsive organization after September
11, John Kelly, David Stark. Center on Organizational Innovation, Columbia
University. New York, NY June 2002.
http://www.coi.columbia.edu/pdf/kelly_stark_cri.pdf
The organization of responsiveness: innovation and recovery in the trading
rooms of Lower Manhattan, Daniel Beunza, David Stark. Socio-Economic
Review (2003) 1, 135-164.
http://www.coi.columbia.edu/pdf/buenza_stark_or.pdf
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References (2)
 *The organization of responsiveness: innovation and recovery in the
trading rooms of Lower Manhattan, Daniel Beunza, David Stark.
Socio-Economic Review (2003) 1, 135-164.
http://www.coi.columbia.edu/pdf/buenza_stark_or.pdf
 5 Habits of Highly Reliable Organizations, Keith H. Hammonds, “Fast
Company Magazine, Issue 58, May 2002, Page 124.
http://www.fastcompany.com/magazine/58/chalktalk.htmltp//
*Note extensive bibliography.
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Q&A??
 A copy of each of the reference documents
is available for your review after the
session.
 Thanks for learning!
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