Many small and medium-sized enterprises (SMEs) say they do not work with […]
Many small and medium-sized enterprises (SMEs) say they do not work with resilience. But new research shows that SMEs focus more on resilience than they realize – and also highlights which approaches and resources make a difference. Here are 5 insights from a new PhD thesis by Thuva Kandasamy from DBI – the Danish Institute of Fire and Security Technology.
1. SMEs work with resilience – without calling it resilience
Many SMEs initially say they do not work systematically with resilience. But when you take a closer look at their practices, it often turns out that they are already doing a number of things that research associates with organizational resilience.
In many of the companies Thuva Kandasamy followed, this includes diversifying critical skills among employees. During the COVID-19 pandemic, some companies discovered that production stopped if a key employee got sick because only that person could operate certain machines. This led to more employees being trained to perform the same functions.
Other companies work to reduce dependency on individual suppliers or closely monitor developments in their supply chain. At the same time, many smaller firms benefit from the short distances between employees and management. Shop-floor employees often spot problems first – such as delivery issues or production challenges – and in small organizations, this knowledge can quickly reach decision-makers.
”Several companies told me they don’t really work with resilience, but when asked how they handle problems or crises, they describe many things they already do,” says Thuva Kandasamy.
According to Kandasamy, this shows that resilience work in many SMEs is less formal and more practice-based than in larger companies. Instead of strategy documents and fixed processes, it often relies on experience, quick decisions, and ongoing adjustments.
2. Resources are not just financial
When discussing a company’s ability to handle crises, finances are often the focus. Can the company afford preparedness measures, consultancy, or new solutions?
In many SMEs, financial resources are limited, making other types of resources crucial. These can include employee competencies, a strong company culture, or access to networks and external partners. Several companies Kandasamy interviewed only began working systematically with resilience when they gained access to external advice through projects or networks.
”Several companies said that the reason they engaged with resilience at all was that there was a project or a network where they could get help. Smaller companies do not necessarily have the financial resources to hire consultants themselves,” says Thuva Kandasamy, adding:
”This means that resilience in SMEs often involves activating resources that already exist within and around the company, rather than building large internal functions.”
3. The owner-manager is both a strength and a vulnerability
Many of the smaller companies studied are led by an owner-manager who plays a central role in nearly all decisions. This can be a strength because the company can react quickly, but it also creates vulnerability.
”Several directors told me: “I actually think I’m the one who makes the company vulnerable.” They realized that much of the knowledge critical to the business exists only in their heads,” explains Thuva Kandasamy, and goes on:
”However, many leaders are not necessarily aware of how much knowledge and resides with them – and how vulnerable the company is if that knowledge is not shared across the organization.
At the same time, the owner-manager’s close relationship with the company is also a strength. In several family-owned businesses, Thuva Kandasamy observed strong personal commitment from management to ensuring the company’s long-term survival. Without an engaged leader or decision-maker, nothing tends to happen.
4. Resilience drops down the priority list
You might expect that major crises – such as COVID-19, supply disruptions, or the energy crisis – would automatically lead companies to prioritize resilience. But that is not necessarily the case.
In many SMEs, day-to-day operations consume so much time that it is difficult to focus on long-term initiatives like mapping vulnerabilities or preparing for future crises.
”Time itself is a resource. Many companies feel pressure from other demands – such as sustainability requirements, documentation, or new customer expectations – so it’s not about whether they want resilience, but whether they have time for it,” says Thuva Kandasamy.
While crises may prompt reflection, once the immediate situation passes, daily operations usually take over again. As a result, many SMEs work reactively, handling problems as they arise rather than systematically preparing for future disruptions.
5. Start by talking about vulnerabilities
Resilience can be an abstract concept for many companies. Part of the explanation is that employees and management do not always attach the same meaning to the term. For some, it is about crisis preparedness; for others, it is about keeping production running or adapting to new market conditions.
That is why it often makes more sense to start somewhere else: By discussing the company’s concrete vulnerabilities.
”Resilience can feel abstract as a concept. But when you start talking about specific vulnerabilities and working through scenarios, it becomes much easier for companies to see where they can take action,” says Thuva Kandasamy.
According to her, working with resilience does not have to begin with extensive analyses or new systems. It can start with a conversation within management about what would actually happen if an important supplier disappeared, a key employee left, or a critical machine broke down.
In some companies, this has led to more employees being trained to operate the same machines, so production does not come to a standstill if a key person is absent. Others have found alternative suppliers to reduce dependence on a single partner.
Once SMEs begin to work more consciously with their vulnerabilities and experiences, even small changes can make a big difference in how well prepared they are for the next crisis.
PhD on organizational resilience in SMEs
The PhD thesis ‘Firefighting, Futuring, and Everything in Between: Organisational Resilience in SMEs’ is written by Thuvarakai Kandasamy from DBI as an industrial PhD at Aarhus University.
The thesis is article-based and consists of three scientific papers examining different aspects of organizational resilience in SMEs:
‘Framing Organisational Resilience: A Study of Pre-Crisis Practices in SMEs’ explores how companies understand and work with resilience before crises occur.
‘Temporal Translation as Resilience Work: From Distant Events to Present Action’ analyzes how companies turn experiences and future risks into present-day actions.
‘Beyond Slack: A Resourcing View of Organisational Resilience in SMEs’ examines which organizational resources enable companies to handle and adapt to crises.
Companies and organizations who are interested in reading the thesis are welcome to contact Thuva Kandasamy at thk@dbigroup.dk.
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