Bouncing Back from Adversity

Michael Nathanson, CEO of The Colony Group, a Boston-based asset management company, two decades ago gained some perspective the hard way on how to handle adversity. In 2000, he was a senior tax lawyer with a prestigious law firm when he learned that he had an inoperable brain tumor pressing on his optic nerve.

Many doctors and treatments later, Nathanson feels like he can handle whatever life throws his way—for himself and for his company, which has 258 employees and $12.5 billion in assets under management.

"The tumor's not malignant, but it's something that I have to live with," he says. "I could feel bad for myself, but I know I'm fortunate it's not cancer and I'm not blind." And, he adds, he has come to appreciate that "every life event that happens to us is an invitation to ask if we are able to adapt ourselves and evolve."

Cultivating an optimistic mindset is part of what it means for an individual or an organization to be resilient. Over the past year, business leaders and companies worldwide have had to learn how to keep going during deeply unsettling events. Resilience—the ability to bounce back quickly from setbacks and adversity—has been a vital commodity.

In a recent report from consultancy Deloitte, C-suite executives and public-sector leaders were asked to rank the most critical workforce traits for an organization's future. "Flexibility/adaptability," cited by 54 percent of the respondents, landed atop the list.

Optimism and resilience aren't just "nice-to-have" qualities. According to research from the Boston Consulting Group's think tank, BCG Henderson Institute, these traits can impact performance. In a study of nearly 1,800 companies over a 25-year time frame, the institute found that when external shocks hit companies that have worked to be flexible and resilient, their performance holds up better than their peers' during setbacks and they recover faster and more broadly. Indeed, the ability to hang on and be resilient during unfavorable periods accounts for nearly 30 percent of long-term outperformance, the institute noted in its August 2020 report Becoming an All-Weather Company.

The COVID-19 crisis that disrupted life around the world in 2020 has certainly been a litmus test of corporate resilience, even for companies whose products were suddenly in high demand. Here are some key lessons learned.

Focus on Organizational Values

In many ways, the rapid shift to remote work was good for business at BlueJeans Network, a video collaboration firm that Krish Ramakrishnan co-founded 10 years ago in California. Demand for its core offering—videoconferencing—soared overnight. "Our major customers were shutting down globally and switching to all-video meetings," he says. "In a matter of days, our traffic went through the roof, up 400 percent.

But the crisis also meant that customer service demands on BlueJeans employees intensified just as pressures on their families were also spiking. As a company that stresses "family first," Ramakrishnan says, BlueJeans had to work hard not to send mixed messages about where employees should place their priorities.

And that wasn't all. The pandemic hit just as Ramakrishnan was deeply immersed in negotiating the sale of the company to Verizon. The transaction closed in May 2020.

Facing multiple pressures, BlueJeans chose to divide and conquer. One co-founder "took on the mission of making sure we never dropped a single call on behalf of a customer," Ramakrishnan says. The CEO at the time was responsible for assuring employees that they could work from home and supporting them with the tools to do so; additionally, managers in the decentralized organization had discretion to take care of their people with rewards and flexibility. Simultaneously, Ramakrishnan and a hand-picked team worked on the Verizon transaction.

Juggling so many changes at once, Ramakrishnan says, reinforced the idea that knowing and communicating your corporate culture is a key to staying resilient. "You have to constantly remind a company of its culture because when a setback happens, the company has something to lean on," explains Ramakrishnan, who is now executive chairman of BlueJeans by Verizon. Customer success and support are core pillars.

In the midst of the COVID-19 crisis, he found himself reminiscing about his first board meeting at BlueJeans that took place 10 years earlier. The meeting was interrupted when a major customer had a crisis that required immediate support from BlueJeans staff. Ramakrishnan did the unthinkable and halted the meeting to get the customer back on track. "We put the board second and the customer first," he says.

That experience has stuck with him. "When adverse things happen, organizations are not only defined by how they react and how they survive, but how they thrive," he says.

Recognize that Little Things Add Up

Heather O'Neill, president of Advanced Energy Economy, a clean-energy business association with a staff of 40 based in Washington, D.C., found that many small, deliberate steps have helped her organization thrive through challenging times.
Most of the team was already working remotely when COVID-19 hit, so "our organizational culture didn't center on the physical office," O'Neill says. "We were already using Zoom and Slack."

For many employees, it was their home life that changed the most. Advocacy staff that was accustomed to traveling to state capitals, for example, had to adapt to performing education and advocacy work from home, often while balancing new demands such as supervising children during the workday and coping with isolation.

At the start of the crisis, the association gave every employee a week of paid leave to prepare for their new everyday realities. These days, O'Neill worries more about burnout, since working at home has made it harder to draw a bright line between work and home.
"It's incredibly important to step away and not be connected all the time," O'Neill says. She has led by example: She took time off to renew and refresh, and is vocal about the need to do so, even sharing vacation photos with her staff upon her return.

Don't Forget to Have Fun

The association has supported employees and helped them to persevere by being flexible and maintaining a sense of fun, O'Neill says. The mindset around the workday quickly loosened. "If they need to take chunks of time off and do work at odd times, that's OK," she says.

She also instituted regular communications to keep people feeling connected. Every week, Advanced Energy Economy publishes a "feel-good Friday" e-mail that lets employees share what they're doing to rejuvenate.

But a steady diet of isolation and Zoom meetings can get to even the most resilient employees, O'Neill says. She recently noticed an uptick in people snapping at each other. In response, she gave each employee a $50 wellness credit to use on anything that would buck them up, excluding alcohol. "It's not a life-changing amount, but people found the gesture meaningful," she says. One employee used the funds to create an indoor seed garden, another did an online tea tasting, and still another signed up for yoga online.

The association has encouraged team members to relax and play games during virtual lunches. And when the March Madness college basketball tournament was shut down in 2020, the organization's leaders declared Starch Madness instead, as employees went toe-to-toe over who had the best potato recipes, complete with bracket sheets to track the leaders. "People are still talking about it," O'Neill says.

And at a time when its members can't meet in person, the association has found a way to provide networking opportunities virtually. At the organization's quarterly business meetings, staff open the Zoom line 15 minutes early to give members a chance to mingle and catch up.

Where's the evidence that efforts to keep employees resilient and positive are working? Strong employee retention is one proof point, O'Neill says. Advanced Energy Economy also conducted a survey to ask employees what was and wasn't working. "They wanted us to keep that feel-good Friday rhythm," she says. "And they appreciated our emphasis on their safety."

When it comes to fostering resilience, the crisis has shown that "there isn't a silver bullet," O'Neill says. "It's about having a sense of humor and being flexible."

Shift Gears When Routines Break Down

During periods of uncertainty and crisis, established ways of getting things done—everything from completing time sheets to planning for an acquisition—can break down, according to researchers Fernando F. Suarez and Juan S. Montes. The authors examined resilience through the lens of a 41-day expedition to climb the most remote side of Mount Everest, which Montes was part of in 1992.

The two professors, who are faculty members of the business school at Northeastern University and the management school at Boston College, respectively, wrote in the November/December 2020 issue of Harvard Business Review that resilient organizations strive to move fluidly between the following distinct modes of operating: They can adhere to established protocols, or scripted routines; they can follow rules of thumb; they can improvise; or they can do some of each.

Organizational routines are effective when work is predictable, they wrote. But rules of thumb, such as investing only in projects that provide a specified minimum return on investment, can help speed up processes and decision-making in less predictable times. And improvisation—which they defined as "spontaneous, creative efforts to address an opportunity or a problem," such as shifting from automated to manual processes in a crisis—kicks in when regular routines break down.

"What happened [in 2020] has made it crystal clear that you cannot rely on stable environments and therefore routines forever," Suarez says. "There are some moments you really have to respond fast to things you never thought you'd have to face."

Such change is not unprecedented, he adds, pointing to technology disruptions that toppled venerable brands such as Nokia and BlackBerry. "What's different now is the speed of change." As organizations face new challenges such as the impact of climate change, "resilience will become a lot more important," he says.

Organizations can prepare for disruption, Suarez says, by questioning the assumptions behind routines and evaluating how to operate if the assumptions didn't hold. For example, which type of decisions do organizations assume will have to be made by high-level managers, and how would that change in a crisis?

Organizations can also practice doing more with less, cross-train to deepen knowledge of how other areas function and learn to give up control by recognizing when it's time to delegate decision-making authority to people on the front lines, Suarez says.

Keep Pace

Jack Kenny, CEO of Cincinnati-based Meridian Bioscience, says his company has had to be flexible and sensitive as it navigates a business transformation during the pandemic. Its two key operations, life sciences and diagnostics, face very different challenges and opportunities.

"I have one business that's running a marathon and another that's running a sprint," Kenny says.

The diagnostics operation, which produces human diagnostics test kits, is Meridian's legacy business, dating back 43 years. It has traditionally generated the lion's share of the company's profits and cash. But the company underinvested in research and development in order to pay out dividends, Kenny says. That took a toll by limiting the number of new diagnostics products Meridian could bring to market, he says. Under his watch, the dividend has been cut in order to plow funds into R&D.

On the other hand, Meridian's life sciences business has enjoyed robust growth in recent years, with revenues doubling between 2019 and 2020 and surpassing the diagnostics business for the first time. The life sciences operation makes key components used in other manufacturers' medical tests, such as antigens, antibodies and reagent solutions.

The diagnostics operation has pursued business opportunities presented by COVID-19 and is working on the rapid development of a molecular diagnostics test for the virus. But it "can't run after every red balloon," Kenny says, because its focus remains on investing and repositioning itself for sustainable long-term growth.

The life sciences business, however, has been able to "act faster and mobilize" and is building long-term customer relationships out of the upheaval of the pandemic.
Kenny says the key to resilience is adaptability. It helped that Meridian was striving to instill a change mindset across the organization one to two years before the pandemic struck, he says.

"When everyone is comfortable, nobody wants to do the tough things you have to do," he notes. "It's like working out. You don't want to do it, but you have to make yourself do it."

Take Stock and Cooperate

Kenny believes that tough times can galvanize a team. "The best-performing teams take shape when everything hasn't gone well," he says. In resilient organizations, he adds, leaders learn to step back when taking stock of a problem, and, instead of pointing fingers, determine how to overcome challenges.

"We can have a frank discussion in a room by ourselves and be real," Kenny says, "but when we leave that room with a decision, there is alignment. Nobody is saying, 'Well, Jack wanted to do this.' "

Nathanson of The Colony Group also points to cooperation as an underpinning of resilience. "We are a company that puts super teams before superstars," he says. He tries to foster a culture that recognizes and rewards cooperative values such as teamwork and being supportive of colleagues. This approach helps to tamp down internal competition, which he sees as distracting and counterproductive.

Nathanson professes that he's fascinated by how his clients have navigated obstacles and life-altering events, and what drives them to succeed. So in between running a large asset management company and practicing martial arts for relaxation and strength, Nathanson hosts a biweekly podcast called Seeking the Extraordinary, in which he chats with guests about how they overcome adversity and harness creativity to achieve extraordinary outcomes—and stay resilient.

Debra Cope is a freelance writer based in the Washington, D.C., area.

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