How to Transform Organizational Trauma into Resilience

Disruptive events are becoming more frequent, from global pandemics to economic crises. According to PwC’s Global Crisis and Resilience Surveys, 96% of organizations have recently reported experiencing major crises — not counting the pandemic. What’s more, this statistic has increased 69% in 2019.

Take for example the February 2021 Texas Big Freeze, an unprecedented winter storm causing widespread power outages and significant infrastructure damage. Well-known supermarket chain HEB faced significant disruption as the storm’s impact led to empty shelves and delayed restocking of essential goods. The extreme weather forced HEB temporarily closed many of their stores, deepening the hardships faced by communities that depend on their services for food and other goods.

While these impacts were widely reported across the country, less attention was paid to the collective trauma experienced by employees and customers in the wake of the storm. H-E-B employees worked under difficult conditions to manage store closures and ensure safety protocols were followed. The sudden unavailability of basic necessities heightened anxiety and stress for employees and community members as people struggled to secure food and water amid the chaos. The storm underscored that even the most resilient organizations are vulnerable to disruption and disaster.

Dr. Nelu Nedelea, organizational researcher and vp of mission and ministry at Mercy, emphasizes that when organizations experience these or other kinds of disruptions, their leaders need to implement special resilience strategies to emerge from them.

According to Nedelea, the heart of the problem is collective trauma. Collective trauma, often used to describe the effects maintained by cultures and nations, also refers to the phenomenon in which members of an organization individual and collective experience emotional and psychological effects resembling stress, anxiety, reduced productivity, increased absenteeism and a pervasive sense of uncertainty and instability during and after a traumatic or disruptive event affecting the organisation.

Why does trauma affect organizations? Nedelea explained that during and after a crisis, employees tend to disconnect from each other as a substitute of coming together, looking for emotional and psychological safety elsewhere. This disconnect undermines communication and trust, creating ongoing and cumulative relational effects that last long after the operational fallout has resolved.

That’s why strained interpersonal relationships, low morale, and fractured organizational culture are often evident after organizational disruption and trauma. Leaders may struggle to make decisions and keep employees engaged, while employees may feel disconnected and undervalued. Communities that rely on these organizations for essential services may experience heightened anxiety and uncertainty.

How can leaders intentionally rebuild trust and nurture connections after organizational trauma? Nedelea guides leaders through 4 steps to guide their organizations through crises:

1. Acknowledge the trauma. Many personal recovery programs emphasize recognition as the first step. Recovery from organizational trauma is no exception. Leaders must first acknowledge the impact of the crisis on the organization and its employees. As Nedelea asked, “How can you address the symptoms if you don’t even acknowledge what happened?”
2. Prioritize emotional healing. Emotional healing is essential to overcoming organizational trauma. Leaders should create a supportive environment where employees feel protected to express their emotions and receive crucial support, resembling virtual counseling, stress management resources, and informal interpersonal support. After the devastating impact of the 2019 California wildfires, University of California, Davis has implemented a comprehensive support program for its employees and students.. This included counseling services, stress management workshops, and peer support groups. By acknowledging trauma and providing emotional support, the university helped its community begin the healing process and restore a sense of normalcy and safety.
3. Fostering open communication and transparency. Clear and empathetic communication is key to rebuilding trust and a sense of community inside an organization. Leaders should be open about the challenges they face and the steps they are taking to rebuild through mechanisms like holding town hall meetings, providing updates on recovery efforts, and establishing channels for ongoing feedback. During the 2020 racial justice protests, Ben & Jerry’s took a strong stance, communicating openly with its employees and the public about its values ​​and actions. The company provided platforms for dialogue and supported initiatives that addressed racial inequality. This open communication strengthened trust inside the organization and its broader community, demonstrating the company’s commitment to its values ​​and people.
4. Adopt the concept of adaptive leadership. Rebuilding after a crisis requires leaders to be agile and adaptive, effectively navigating uncertainty and change. Adaptive leadership involves empowering employees to contribute to solutions and fostering a culture of innovation. Central to this is guiding employees to see challenges as opportunities for growth. Nedelea explained, “Reframing challenges helps shift the organizational mindset from fear and uncertainty to opportunity and innovation.” After the 2008 financial crisis, the automotive industry faced significant disruption. Under the leadership of Alan Mulally, Ford Motor Company embraced adaptive leadership and reframed challenges as opportunities, focusing on innovation and worker engagement. The company One Ford Plan Cross-functional teamwork and open communication were encouraged, leading to revolutionary solutions that helped Ford regain its footing and succeed in a difficult market.

These steps offer an approach that goes beyond fixing operations to deeply healing the relational fabric of an organization—what Nedelea calls the “nervous system of an organization,” critical to its connections and communications that drive productivity and morale. When an organization recovers in this fashion, it not only survives, but emerges stronger and more resilient to the next challenge on the horizon.