Doom and Bloom: Organizations Can Use Disasters as Growth Opportunities

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The pandemic has reminded us all of our vulnerability to unforeseen, catastrophic events. It’s not just individual human frailty we’re grappling with, though. Organizations and even entire countries have been brought to their knees by Covid-19.

Inequality tends to be emphasized during such times of shock and stress. People with greater financial stability also have a corresponding wide margin for error. And it’s the same on the organizational level.

But there are things we can do to beat the odds and practices that doom others to failure. A small business with disaster recovery planning can navigate uncertainty. Larger operations risk collapsing if they are over-leveraged.

Moreover, there’s a real chance that disruptions, even those with overwhelmingly negative effects, can prove to be a blessing in disguise.

A history of crisis and growth

You’re probably familiar with the idea that history repeats itself. Nations form, expand, contract, and disintegrate. They go to war, sometimes winning, sometimes losing, eventually negotiating peace. Meanwhile, the lives of the elite and common people alike play out on the same stage, rising and falling with the times.

Scholars of history have formalized this cyclical view of events. The Strauss-Howe generational theory proposes that societies go through a series of ‘historical turnings’ that repeat roughly every 80-100 years.

Under this model, a crisis state like the one we’re experiencing now could last up to twenty years, marked by severe inequality, widespread misery, and general discord. The last such “Crisis turning” came about during the Great Depression, drawing to a close with the end of the Second World War.

And it’s well-documented that many countries around the world experienced a postwar economic boom. This corresponds with the “High turning,” a period of building and doing big things.

Thus, history shows us that after a crisis, opportunities to grow will inevitably arise. But not everyone gets to participate equally in the rebound.

Aiming for Scenario D

In a study of natural shocks, such as earthquakes, floods, epidemics, and other large-scale catastrophes, researchers found that societies exhibit varying levels of vulnerability and resilience.

We know that vulnerability always increases our risk and the severity of damage we might sustain. But resilience isn’t so one-dimensional. It occurs in a spectrum ranging from mere stability to the possibility of radical change.

The possible outcomes of a massive disruption can be grouped into four scenarios. In Scenario A, the path trends smoothly towards the restoration of the original balance. Scenario B displays some wobble or fluctuation but eventually returns to the old status quo.

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Scenario C manages to restore balance and grow smoothly, but the overall level is lower than before due to a lack of reinvestment capability. Finally, in Scenario D, volatility is experienced, but once balance is restored, it’s higher than before the crisis.

What differentiates between these scenarios? You might expect that higher levels of organization, affluence and development would combine to put more societies in the desirable Scenario D. Yet that isn’t always the case.

Such factors matter, from the global and national level down to institutions and individuals. But the more significant factor in making a large-scale crisis turn out to be a catalyst for improvement is a quality called “transformational resilience.

Cultivating a culture of growth

Unlike the passive concept of resilience, which focuses on restoring things to the way they were and mitigating the post-crisis fallout, transformational resilience is inherently aimed at growth. It enables people to address underlying vulnerabilities and make better decisions on the road to sustainable development.

Within any group of people, there are three pillars for transformational resilience. First, you need members who are aware of the effects of trauma and skilled in self-regulation and facing adversity. These people, in turn, need to operate within a healthy social environment. Finally, you must have a culture that enables both through a virtuous feedback cycle.

This quality may be innate to some people, but it can also be cultivated on the individual level, and it’s the best place to start.

Emphasizing the development of communication and self-reflection helps us to reframe challenges by talking them over with others. Doing so also encourages individuals to draw more extensively on external and social support.

Along with these skills, people need to have a greater sense of purpose. That could stem from having a leadership model to look up to or an emphasis on serving others. Such purposing helps to give meaning to their efforts and informs decisions based on values.

Tying it together, every person in your group should be encouraged to pursue continuous learning. This empowers them to see every challenge, even those with failed outcomes, as an opportunity for growth.

Work to develop these qualities in your people, and you’ll nurture the environment and culture to support an overall attribute of transformational resilience. That will enable your organization to pursue Scenario D paths to rebound and grow from any crisis.

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