Haïti, a country that shares the Caribbean island of Hispaniola with the Dominican Republic, I witnessed how some businesses remained operational despite the destruction caused by natural disasters such as hurricanes or earthquakes, or humanitarian disasters resulting from political or economic crises. Building resilience against all potential hazards or disruptions is an underlining reason for the enterprises' survival.
While Puerto Rico, a U.S. territory located just over 400 miles east of Haïti, is more developed with a 2019 gross domestic product (GDP) per capita (PPP) of $36,054 compared to to latter's per capita GDP of $3,034, according to The World Bank, the former faces the same natural disaster vulnerabilities. Now the coronavirus pandemic has ravaged the economies of all Caribbean nations and territories. I recently watched an informative discussion entitled "Be Prepared to Bounce Forward Better: Building Sustainability and Community Resilience Through Local Businesses: A Puerto Rico Case Study," which presents many useful points on understanding resilience and how a business can utilize it to withstand disruption.
Leading the discussion, Linton Wells II, Ph.D., an Executive Advisor at George Mason University's Center for Resilient and Sustainable Communities (C-RASC), explained that "resilience is the ability to have coping capacity plus the ability to adapt, which in the long-term may be referred as the ability to anticipate something, to withstand a disaster, to recover from it, which is coping capacity, and then the ability to adapt." There are three kinds of resiliency, according to Dr. Wells: resilience for cultural (is the organization willing to stand up and keep fighting when its under stress?), operational resilience (networks and communication sufficient for transmitting key messages, internally and externally), and infrastructural (understanding the dependencies among communication, power, and water, and how those affect a business). "Resilience is not just bouncing back to the pre-crisis status quo. What you want to do is leverage the stresses and shocks so that you actually wind up stronger. Be prepared to bounce forward better and that's what we are trying to build through resilience."
Dr. Wells also points out some people combine or confuse security and resilience. "They are really quite different. Security is how you lock things up and hunker down to keep bad things from happening. Resilience says I know bad things are going to happen, so how do we achieve the organization's goals under any level of shocks and stress, how do we fight back, how do we emerge stronger."
According to Dr. Wells, resilient capacity, which should not be confused for a program or strategy, is "actually a capacity of an organization" and "a function of leadership and has to be build at all levels. You have encourage resilience among your people from the board of directors to the people on the shop floor. It needs to be nurtured. It needs to be made sustainable. And treat it as a positive business asset that should be resourced." I appreciate his assertion that a more resilient business will be a stronger one. And as a result, it will be more likely to withstand disruption.
How do you learn from when bad things that happen? "Learning only happens when behavior changes," said Dr. Wells. "It's not enough to write a report. It's not enough to write an after-action review, You actually have to cause people to change behavior if you're going to truly learn the lessons. And this means you have to be able analyze shocks and see what's going on."
During his remarks, Dr. Wells referenced "The Business Disaster Resilience 101 Workbook," a tool jointly produced by the U.S. Chamber of Commerce Foundation and The UPS Foundation. The 101 Workbook provides more detailed business readiness guidance, tips, and resources to assist companies by addressing their own assets before a disaster occurs. I will publish a future post on this forum focusing on this useful tool.
In responding to Dr. Wells' question on how she is using education and mentoring to build a more resilient, sustainable commonwealth, Annie Mustafá-Ramos, who manages the Puerto Rico Science, Technology & Research Trust's Resiliency and Business Innovation Program (RBI), said the courses and training sessions are helping Puerto Rican businesses to not just continue with their previous activities, but to pivot and adapt to other disasters they may encounter in the future. The program was created in 2017 as a result of disaster (Hurricane Maria) that devastated Puerto Rico.
According to the RBI's website, the program's mission and vision is "To foster a Resilient Business Community on the Island. Enhance the innovations that create business resiliency from entrepreneur development and SBIR (Small Business Innovation Research) program applicants." Administered by the U.S. Small Business Administration, SBIR and the Small Business Technology Transfer (STTR) are programs to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.
Among the work during the covid-19 pandemic, Ms. Mustafá-Ramos noted that over 1,500 individuals experienced the courses. Senior executives and lower-level employees alike, from represent businesses of all sizes, were able to create a resilience plan. In addition, the courses provided the opportunity to train professors, civic leaders, and nonprofit organizations and provide them with the tools to help businesses create a resilience plan.
As a result of the restrictions imposed by the Puerto Rican government to prevent the spread of covid-19, Ms. Mustafá-Ramos explained that service businesses such as hotels, restaurants, and retail shops were greatly impacted financially. However, the operational restrictions created an opportunity for businesses to adapt and pivot. Prohibited from serving customers in their establishment, restaurants pivoted to become a "ghost kitchen," which is a professional food preparation and cooking facility set up for the preparation of delivery-only meals. Brick-and-mortar retailers entered the world of e-commerce. Originally delivering in-person courses only, Ms. Mustafá-Ramos pointed out that people throughout the world were able to attend the resilience courses online.
Looking into the future, she said that investors should consider investing in Puerto Rico, which will generate much-needed jobs and stimulate economic development for the commonwealth." Puerto Rico "is a place to do business and this is the moment." I appreciate her enthusiasm.
Have you created a resilience plan to protect your business before disaster strikes?
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.