What Does Resilience Really Mean?
Excerpted and adapted from The Resilient Investor, by Hal Brill, Michael Kramer, and Christopher Peck
For the past few years, the term “resilience” has been the buzzword du jour in economics, climate science, leadership, online security, and community planning. Surprisingly, it has managed to span the ideological spectrum even in these partisan times. The Post-Carbon Institute recently re-branded their website as resilience.org, while the World Economic Forum in Davos jumped on the bandwagon by focusing its 2013 conference on “Resilient Dynamism.” If resilience science speaks simultaneously to re-localization activists in their transition towns, as well as the 1% gathered in their enclaves, it’s clearly an idea whose time has come.
Let’s take a look at what is meant by resilience and why it has arisen from so many quarters as a concept that is truly emblematic of our times. In Resilience: Why Things Bounce Back, authors Andrew Zolli and Ann Marie Healy frame resilience as “the capacity of a system, enterprise, or a person to maintain its core purpose and integrity in the face of dramatically changed circumstances.” They see resilience as “an essential skill in an age of unforeseeable disruption and volatility.” A unifying and powerful lens, resilience can focus our awareness and actions at all levels—for individuals, businesses, communities, nations, and the entire planet.
Many people become aware of the importance of resilience only after a disaster. Do a search for “Hurricane Sandy & Resilience” and you’ll find numerous articles and conferences convened as decision-makers tried to figure out what we could learn from this super-storm and how we might rebuild in ways that will leave people less vulnerable. But the time to focus on resilience is before disaster strikes; in 2014, President Obama proposed a $1 billion “resilience fund” to help communities protect themselves from climate change impacts such as floods, drought, and wildfires.
Futurists and systems theorists are having a heyday, creating a menagerie of frameworks describing resilience, but it really doesn’t need to be a difficult concept; we see it all around us. Anyone who’s over 40 knows that they’re not as physically resilient as they used to be; injured children recover more quickly than injured grandparents. Healthy ecosystems bounce back from fires or storms better than degraded ecosystems. Technology companies become irrelevant if they fail to respond decisively when circumstances change: perhaps the most striking example is Kodak, once synonymous with the very idea of photography, but left in the dust by the shift to digital imaging.
For those with a strong bent on assuring that we maintain the viability of the biosphere, it’s worth taking a moment to see why resilience is starting to displace sustainability as an organizing concept. Zolli points out that sustainability tries to come up with an “equilibrium point” in which a system stays in balance but this is counter to how many natural and human systems operate. As architect and systems thinker William McDonough wryly asks, “Who simply wants a sustainable marriage?” Resilience does rely on the principles of sustainability (unsustainable investments weaken the capacity of a system to maintain integrity), but it strives for a healthy dynamism rather than stasis.
The lens of resilience makes us more cognizant that for better or worse, we have entered the age of the Anthropocene—a new term for a geological age in which humans have become the dominant factor shaping the world. Natural systems have been damaged to such a degree that we need to be prepared for random, extreme disruptions, according to Zolli and Healy. At the same time, resilience points out that we should be designing our systems, and our lives, so that we do more than survive such disruptions. We’ll want to “capture the upside,” thriving and growing when exposed to volatility and disorder, while also seizing emerging new opportunities as they come into view.
For some, resilience has a flavor of hunkering down, waiting for disaster to hit, and coming out unscathed. That’s not a very juicy way to live, and it’s not what we mean by resilience. Our goal as investors is to make things better, for ourselves, and for the world. We are using “resilience” in its most flexible and optimistic form, still loyal to the goals of sustainability (providing for the needs of the present without harming the future), and with eyes staying sharp for emerging prospects. Here’s our new and improved definition:
Resilience helps us to thrive by anticipating and preparing for disturbance, improving the capacity to withstand shocks, rebuilding as necessary, and adapting and evolving when possible.
Resilience is a powerful remedy for our uncertain times. It helps us learn to live with the fundamental complexity of modern life, rather than trying to simplify our way out of it in order to make decisions. When the inevitable disruptions do hit the system, resilient investors will have the best possible shock absorbers to minimize being rattled, and be positioned to bounce back even better than before. Our favorite one-liner comes from Harvard business professor Rosabeth Moss Kanter, who wrote, “When surprises are the new normal, resilience is the new skill.”