The nature of how and where we work continues to evolve at a rapid pace. The operations of large businesses are often dispersed around the globe, and executives are increasingly mobile. These changes are even greater for the executives who lead organizations. And business schools are reinforcing these norms: Schools today tend to encourage students to construct itinerant careers that unfold across organizations and countries.
But the consequence of greater flexibility and mobility for nomadic executives can be a lack of place. Disconnected from a physical office space, many leaders have identities that are not tied to one location. If they’ve relocated their home base, they expect they will be moving again soon.
The result: Leaders are increasingly strangers in the places where their organizations reside. They often have few deep connections within any one community.
This is problematic if we consider the findings that my colleagues — Scott Baker, Megan Hess, and Jared Harris — and I have uncovered. We explored the experiences of executives during times of hardship, with a keen interest in what makes organizations more resilient (that is, having “the capacity to rebound from adversity strengthened and more resourceful,” as Kathleen M. Sutcliffe and Timothy J. Vogus have written).
We found that leaders who establish ties with the broader community of stakeholders are well positioned to help their organizations thrive in the face of that hardship. Conversely, this dynamic implies that leaders who lack a clear sense of place and have not established those connections might be putting their companies at a disadvantage in rebounding from times of struggle.
Two Main Paths for Rebounding From Adversity
In doing the groundwork for our investigation, it was clear that past research had delineated two main paths for managers seeking to rebound from adversity: They could use operational levers, including changes in processes and structures, and psychological strategies, including changes in attitudes or framing beliefs:
- In terms of operational levers, managers frequently adopt belt-tightening measures to protect financial reserves during times of hardship. They sometimes look for short-term efficiencies through layoffs. Other options include routines that utilize feedback loops to uncover root causes and processes that train employees on problem-solving strategies. Both of these levers promote future-oriented thinking and learning.
- In terms of psychological strategies, managers can develop an adaptive flexibility associated with a more positive affect. Research has long shown that negative emotions significantly narrow individuals’ perceptions, focusing their attention toward singular thought and action. In contrast, positive emotions have a broadening impact: They can grow people’s thought-action repertoire by expanding their range of salient cognitions and behaviors. Indeed, positive emotions amid taxing circumstances can enhance individuals’ coping strategies by finding positive meaning in hardships and motivating effort beyond what is immediately required. In this way, managers who support the development of positive emotions can help expand employees’ belief in recovery and personal investment.
But these paths don’t provide the full picture. Despite the advances in thought leadership regarding the operational levers and psychological strategies that can help managers overcome hardship, there was relatively little understanding of how stakeholders might play a part in the recovery process. There was, therefore, little understanding of how leaders’ connections to their communities might impact that recovery.
New Research Underscores the Importance of Stakeholder Bonds
Because organizations do not exist in social vacuums, remaining silent on the role of stakeholders touched by the organization creates an incomplete picture of how leaders can foster organizational resilience. We sought to examine how the relationships that leaders develop not only with their employees, but also their communities, customers, and even their competitors, can enable the capability to rebound strengthened and more resourceful.
Using qualitative data from 184 companies that experienced different types of adversity, across a variety of industries in 79 communities, we examined the social complexity of organizational resilience as it unfolds in the face of hardships. (This research is due to appear in the forthcoming Handbook of Organizational Resilience, to be published by Edward Elgar Publishing.)
Our key finding highlights the importance of having (and leveraging) distinct stakeholder bonds to help the organization survive adversity. In particular, we found that managers can more effectively respond to hardship when they activate a shared emotional connection — what we term a shared passion for place with organizational stakeholders.
When a company and its stakeholders are tied to a common social context, executives are better-positioned to find innovative ways to collaboratively produce resources for the organization. In our study, these interactions ranged from formal business dealings that involved economic exchanges with community-based suppliers, for example, to more informal social interactions with restaurants, schools, farms, charitable organizations, and community leaders. Shared understandings of and emotional connections to the community generated stakeholder involvement in resolving companies’ organizational crises.
Notably, our analysis points not only to the importance of community and a sense of connectedness between leaders, employees, and community members, but also to the actual physical surroundings of the community in which the organization resides. One participant in our study said that research and development at his company has “thrived as a result of the invaluable resources offered by the academic and scientific environment created by the universities. The locations of the [company] offices have been positively impacted by the easy access to various technology hubs around the state.”
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Communities Foster Organizational Resilience
Thus, if it’s true that “resilient organizations contribute significantly to resilient communities,” as McManus et al. have written, our study suggests the reverse is also true: Communities can contribute to developing organizational resilience. Our research demonstrates that greater engagement and interactions with the community can symbiotically help organizations thrive in the face of hardship.
Executives who develop a shared passion for place are then, in effect, developing lifelines to stakeholders who can ultimately help the organization resurface from difficult times. Those who don’t, however, have a smaller reservoir of connections to draw from — and less capacity for resilience when they really need it.
Editor’s Note: An adapted version of this article appears in the Summer 2019 print edition under the headline “A New Path to Organizational Resilience.”