Shopping Centre

In-built resilience is key in a downturn

Published:  26 June, 2009

The economic climate has rocked the high street; it’s hard to think of a retailer that hasn’t been affected. In the past 12 months, we have witnessed the demise of household names including Woolworths, which collapsed after 99 years on the high street. The furniture chain MFI finally departed after years of attempted resuscitation, while Rosebys, Floor-2-Go, MK One and The Pier all entered administration.

The ability to deal with what can seem like overwhelming change has never been more important, and is vital to business strategies in 2009 and beyond. So how should retailers react? Should they stick to their strategy regardless or adapt accordingly?

In response to reduced customer spend on the high street, retailers have adopted varied tactics ranging from making staff redundant, introducing extended sales periods through to announcing budget product lines. Other companies have adopted different approaches. For instance, Next has said that there will be less opportunity for overtime and bonus payouts for employees. During this period of constant economic change it is resilience that will define a retailer’s success or failure.

Organisational resilience is a dynamic process through which organisations react positively and adapt when faced with adversity – it is not just about survival but about being able to manage change effectively by finding and seizing opportunities.

One thing is for sure among all the mounting uncertainty – the good times will return. Retailers need to ensure that they are able to gain or retain their competitive advantage so that they can hit the ground running when those better times return. Building resilience is the key.

Lane4’s research indicates that retailers must focus on four types of resilience to ensure long-term sustainable performance:

A collectively resilient organisation has highly inter-connected networks and avoids areas of vulnerability in terms of connections and resource. This will include ‘mentally tough’ individuals who can perform at consistently high levels during times of heightened personal and professional pressure.

A strategically resilient organisation is forward-looking and innovative. Strategies will be adapted easily to meet changing demands and opportunities. This will include anticipating and adapting to environmental change, the capability to flex strategy to accommodate shifting requirements and an experiential mindset to provide future solutions that avoid strategic decay.

An operationally resilient organisation will have flexible systems and processes to deal with the fast pace of change. This will include effective change management to mobilise people and resources, strong formal internal communications to provide direction and flexible systems and processes that allow for better adaptation than rigid bureaucratic environments.

An organisation with strong performance resilience faces reality head-on and continues to achieve through difficult times. It will focus on reality and avoid blind optimism, outlining clear performance expectations for employees.

Resilience in retail organisations has been key during previous recessions and tough times. It is those very organisations that retain and develop their best people that build a resilience that enables them to emerge stronger when the better times return.

Mike Hurst,

Principal consultant,