The Resilience Grid

The difference between risk and uncertainty and how to make decisions when none of the options offers a good outcome.

250
Years in boardrooms

We’ve shared decades of experience in governance, finance, decision making, risk assessment, environmental protection, team dynamics and stakeholder communications with directors.

We explore how to deliver long-term sustainable success by helping improve understanding of the risks and behaviours that are leaving directors exposed.

The Resilience Grid

Directors assess individually where they would place their businesses on the nine-box resilience grid, assessing today’s operational performance (x-axis) and the future proofing of the business (y-axis).

Directors share their assessments either by way of “thread-pulling questions” or more detailed themed questionnaires. The themed questionnaires for topics include purpose, finance, stakeholder buy-in, culture, leadership, governance, market positioning each has its own nine box resilience grid.

The tone of the discussions on the multi-layered nine-box grids is “encouraging peer-to-peer coach”, and not enforcement assessors/snake-oil salesmen!

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What makes a business truly resilient?

Take our quiz

We need to look ahead 12 months when we are reviewing our financial statements.

FALSE: Directors are required to ensure that companies can pay debts as and when they fall due, so be alert to all repayment obligations, including long-term ones.

Bias plays a part in our data analysis and our decision making.

TRUE: Every system and every individual is affected by Bias. Not convinced, read Daniel Kahneman’s work, particularly his latest one, “Noise”.

Our financial statements are based on guesses and estimates.

TRUE: Financial statements are based on guesses and estimates, so directors need to be sure that they know, agree with and understand the impact of changing circumstances on the guesses and estimates.

It is part of my job to follow the work of at least three futurists.

TRUE: Predicting the future has never been possible, but there is more uncertain now. Amy Webb’s The Signals Are Talking contains good tips for evaluating new ideas bubbling on the horizon, but variety of views is also important so make sure you are curious about multiple views.

Shareholders support our key strategic decisions so they can be relied upon to support our funding requests

FALSE: Directors are responsible to all stakeholders (including employees) for the health of companies and cannot assume shareholder support.

We ensure diverse thinking by having at least one non-graduate in our boardroom

TRUE, diversity of thought adds to resilience, and some of the diversity traits are less apparent than others, but how do you ensure that all views are heard? Asking employees to serve on boards needs training of both the employee and the other directors.

What does this mean in practice?

  • Performance can be improved, but within clearly defined boundaries.
  • Resilience can be improved and measured but at a cost.
  • Common Mode failures (a single source causing multiple failures) need to be better understood.
  • Understanding the need for redundancy is vital.
  • Modularity is an effective protection against the unknown/unknowns.
  • Tectonic shifts that remain ‘hidden’ until a tipping point, (Yanos’spen!) need robust discussions, remembering that “absence of evidence is not evidence of absence”
  • Oversight should be both narrow- focussed and wide-angled.
  • Oversight should be near-term, medium-term and long-term (meeting s172 obligations).
  • RISK and UNCERTAINTY require different control mechanisms.

”Economies grow when business is bold and finance is humble, but perish when finance dominates business.

Winston ChurchillHaving lived through the Great Depression