Building Resilience for Long-term Performance
Part 5: Portfolio Performance – From Drift to Direction
Recovery is only half the story. The other half is making sure it doesn’t happen again.
Throughout this series, we’ve explored how to identify operational blockers, strengthen management teams, build credible roadmaps, and manage stakeholder expectations during transformation. But none of this matters if the business simply drifts back to where it started six months later.
The uncomfortable truth about portfolio company recovery is that many businesses that successfully navigate their immediate challenges end up facing similar problems again within a few years. Not because the original fixes were wrong, but because they never built the resilience to prevent future drift.
This isn’t about creating bureaucracy or over-engineering processes. It’s about building the organisational capability to recognise problems early, adapt quickly, and maintain performance momentum even when conditions change.
The resilience challenge
Most recovery efforts focus intensely on solving immediate problems but give little thought to preventing future ones. This creates a cycle where businesses lurch from crisis to recovery to drift to crisis again.
The challenge is that building resilience requires a different mindset from solving problems. Problem-solving is about fixing what’s broken. Resilience-building is about creating systems that prevent things from breaking in the first place.
Why businesses drift again. The patterns are predictable. External support gets withdrawn too early, before capability is fully embedded. Management attention shifts to new growth opportunities, and disciplines slip. Market conditions change, but the organisation doesn’t adapt its approaches. Success breeds complacency, and the vigilance that drove recovery fades.
Perhaps most commonly, the business never develops its own early warning systems. Without external oversight pointing out problems, they simply don’t see drift happening until it’s already substantial.
The components of organisational resilience
Resilient portfolio companies share several characteristics that distinguish them from those prone to repeated drift.
Early warning capability. They’ve built systems that detect problems before they become crises. This isn’t just about metrics and dashboards, though those matter. It’s about creating a culture where people notice patterns, raise concerns early, and act on warning signs before they compound.
Adaptive capacity. They can adjust their approaches when conditions change without losing their core direction. This requires both the capability to recognise when change is needed and the organisational agility to implement adjustments quickly.
Distributed problem-solving. Rather than relying on a few key individuals to spot and solve problems, they’ve built problem-solving capability throughout the organisation. Teams at all levels can identify issues and take appropriate action within their areas of responsibility.
Performance momentum. They’ve created rhythms and disciplines that maintain forward progress even during difficult periods. Performance becomes self-reinforcing rather than requiring constant external pressure.
Learning integration. They systematically capture and apply lessons from both successes and failures, building organisational knowledge that improves decision-making over time.
Building early warning systems
The most critical component of resilience is the ability to spot problems early, before they require crisis intervention.
Beyond the dashboard. Traditional dashboards show you what happened, often weeks after it occurred. Effective early warning systems focus on leading indicators that predict future problems.
These might include decision velocity (how quickly are decisions being made across the organisation), initiative completion rates (what percentage of projects are finishing on time and delivering expected results), communication quality (are issues being raised and resolved efficiently), resource allocation patterns (where is time and money actually being spent versus where it should be spent), and customer feedback trends (not just satisfaction scores, but the content and tone of customer interactions).
Pattern recognition capability. Teaching people to recognise the early signs of drift is more valuable than any dashboard. This means helping teams understand what healthy operational rhythm looks like, what early warning signs typically precede problems, how to distinguish between normal fluctuations and concerning trends, when to escalate concerns and when to address them locally, and what questions to ask when something feels “off” but isn’t obviously broken.
Creating safe escalation. Early warning systems only work if people feel safe raising concerns. This requires creating clear escalation paths that don’t penalise people for raising issues, regular check-ins that invite honest assessment rather than defensive reporting, protection for those who identify problems early rather than those who hide them until they become crises, and recognition that surfacing problems early is a valuable contribution, not a sign of failure.
Developing adaptive capacity
Resilient organisations don’t just maintain their current performance; they adapt their approaches as conditions change whilst maintaining their core direction.
Scenario planning as standard practice. Rather than treating scenario planning as a once-yearly exercise, resilient businesses build it into their regular rhythm. This means regularly asking “what would we do if…” questions, testing assumptions about market conditions and competitive responses, preparing contingency plans for likely scenarios, and creating decision frameworks that work across different conditions.
Flexible resource allocation. Building systems that can shift resources quickly when priorities change. This includes maintaining some resource flexibility rather than committing everything to fixed plans, creating approval processes that enable rapid reallocation when needed, developing capability that can be deployed across different priorities, and maintaining cash reserves that provide options during uncertainty.
Decision-making agility. Developing the organisational capability to make good decisions quickly when conditions change. This requires clear decision frameworks that work under pressure, distributed authority that doesn’t require everything to be escalated, access to information that enables informed decisions at multiple levels, and experience making decisions under uncertainty rather than waiting for perfect information.
Building distributed problem-solving capability
Resilient organisations don’t rely on heroic leadership to solve every problem. They build problem-solving capability throughout the organisation.
Developing judgement at all levels. This means helping people understand the principles behind good decisions rather than just following procedures, teaching pattern recognition that helps identify when situations require different approaches, building confidence in decision-making under uncertainty, and creating opportunities for people to practice problem-solving in low-risk situations.
Creating ownership culture. Moving beyond “that’s not my job” thinking to “how can I help solve this?” This requires clarifying what people are responsible for and empowering them to act within those boundaries, recognising and rewarding initiative rather than just compliance, creating systems that enable people to take action rather than requiring endless approvals, and sharing information that helps people understand how their actions affect broader outcomes.
Knowledge sharing systems. Ensuring that insights and solutions spread quickly throughout the organisation. This includes regular sessions where teams share what they’ve learned, simple systems for capturing and sharing best practices, cross-functional exposure that helps people understand how different parts of the business work, and recognition for those who help others solve problems rather than just solving their own.
Creating performance momentum
One of the most important aspects of resilience is creating momentum that sustains itself rather than requiring constant external pressure.
Rhythm and routine. Establishing regular rhythms that maintain focus and energy even during difficult periods. This includes weekly operational reviews that keep problems visible and addressed, monthly strategic check-ins that maintain alignment with longer-term objectives, quarterly planning sessions that adapt approaches based on learning and changing conditions, and annual strategy reviews that ensure direction remains relevant.
Success building on success. Creating cycles where achievements generate energy and confidence for further improvement. This means setting milestone that create regular opportunities to recognise progress, building capabilities that make future achievements more likely, creating feedback loops that help people see how their efforts contribute to success, and designing goals that stretch people without setting them up for failure.
Continuous improvement culture. Making improvement a natural part of how the business operates rather than a special project. This requires systems that capture improvement opportunities as part of regular work, processes that test and implement changes quickly rather than through lengthy bureaucracy, recognition that innovation and efficiency improvements come from everyone, not just leadership, and expectation that “how we do things” should constantly evolve based on learning and changing conditions.
Learning integration systems
Perhaps the most valuable aspect of resilience is the ability to get better over time through systematic learning integration.
Capture lessons systematically. Rather than hoping that insights from experience will somehow stick, build systems that capture learning explicitly. This includes post-project reviews that identify what worked and what didn’t, regular team reflections that surface insights from daily operations, documentation of decisions and their outcomes that builds institutional memory, and sharing sessions that spread learning across different parts of the organisation.
Apply learning to improve decisions. Making sure that insights from experience actually influence future choices. This means updating decision frameworks based on what you’ve learned about what works, revising processes that consistently cause problems or delays, adjusting resource allocation based on what’s proven most effective, and changing hiring and development priorities based on capability gaps you’ve identified.
Build organisational memory. Creating systems that preserve important knowledge even when people leave. This includes documenting key processes and decision criteria so they survive personnel changes, cross-training that prevents critical knowledge from being concentrated in single individuals, mentoring systems that transfer experience from senior to junior team members, and storytelling that preserves cultural knowledge about what the organisation values and how it operates.
The transition from recovery to resilience
The shift from recovery mode to resilience building requires a fundamental change in perspective.
From fixing to preventing. Recovery focuses on solving immediate problems. Resilience focuses on building systems that prevent those problems from recurring. This requires investing time and resources in capability building even when there are immediate pressures, focusing on root causes rather than just symptoms, building systems thinking rather than just tactical problem-solving, and accepting that prevention is less visible but more valuable than crisis response.
From external support to internal capability. During recovery, external support often provides the capability and perspective needed to drive change. Building resilience means developing those capabilities internally so the organisation can maintain performance independently. This includes transferring knowledge and skills rather than just solving problems, building internal coaching and development capability, creating succession planning that preserves institutional knowledge, and developing confidence in the organisation’s ability to handle future challenges independently.
From crisis urgency to sustainable pace. Recovery often requires unsustainable effort and focus. Resilience requires finding rhythms that can be maintained long-term. This means balancing short-term performance with long-term capability building, creating work patterns that energise rather than exhaust people, building buffer capacity that provides options during difficult periods, and maintaining investment in development and improvement even during busy periods.
Measuring resilience
Unlike recovery, which has clear metrics around performance improvement, resilience is harder to measure directly. However, there are indicators that suggest an organisation is building resilience effectively.
Response time to problems. How quickly does the organisation identify and respond to emerging issues? Are problems being caught and addressed earlier than they were previously?
Adaptation capability. How well does the organisation adjust to changing conditions whilst maintaining performance? Can it change approaches without losing momentum?
Distributed initiative. How often do solutions and improvements come from throughout the organisation rather than just from senior leadership? Are people taking ownership for problems in their areas?
Learning velocity. How quickly does the organisation capture and apply lessons from experience? Are decision-making and processes improving based on what’s been learned?
Stress tolerance. How well does the organisation maintain performance during difficult periods? Can it handle challenges without reverting to crisis mode?
The long-term payoff
Building resilience requires investment during recovery when resources are stretched and attention is focused on immediate problems. It’s tempting to postpone resilience building until performance is fully restored.
But the businesses that invest in resilience during recovery create competitive advantages that compound over time. They become faster at identifying and solving problems. They adapt more quickly to changing conditions. They require less external oversight and support. And they build confidence among stakeholders that performance improvements will be sustained rather than temporary.
Most importantly, they create organisations that their people want to work for long-term. When people see that problems get addressed quickly, that their input is valued, and that the organisation learns and improves continuously, they become more engaged and committed to sustained success.
The investment in resilience during recovery pays dividends for years afterwards in the form of sustained performance, reduced need for external intervention, and competitive capability that’s difficult for rivals to copy.
Making resilience practical
Building resilience doesn’t require massive change programmes or expensive systems. It requires consistent attention to building capability rather than just solving problems.
Start with early warning systems that help people recognise patterns before they become crises. Build problem-solving capability throughout the organisation rather than concentrating it at the top. Create rhythms and routines that maintain momentum even during difficult periods. And establish systems that capture and apply learning to improve decision-making over time.
The goal is creating an organisation that gets stronger rather than weaker under pressure, that adapts quickly to changing conditions whilst maintaining direction, and that builds competitive advantage through superior execution capability rather than just good strategy.
When resilience is built effectively, the organisation becomes genuinely self-improving. Performance improvements sustain themselves. Problems get solved before they require external intervention. And the business builds the capability to handle whatever challenges and opportunities emerge in the future.
Next in the series: Portfolio Performance Series Wrap-Up – bringing together the complete framework for moving from drift to sustainable direction.
