Intellectual capital and resilience: evidence from two cases of SMEs

ABSTRACT Disruptive changes, such as the ones caused by the COVID-19 outbreak, oblige firms to develop the ability to be resilient in this unstable environment if they want to stay competitive. In this context, the aim of this article is to unveil how intellectual capital (IC) may foster resilience in small- and medium-sized enterprises (SMEs). To serve this purpose, this article presents the results of a qualitative analysis of two SMEs during the COVID-19 pandemic. The most significant evidence is that a combination of the components of IC, namely human capital, organisational capital, and relational capital, is useful for SMEs to respond to changing conditions and take advantage of emergent opportunities, which means going through the prepare-respond-transform resilience process. This article is among the first attempting to elucidate the relationship between IC and SME resilience. It reveals a tight connection between these two concepts, which still deserves further investigation.


Introduction
The significant changes brought about by the Corona Virus Disease (COVID-19) pandemic have upset the way firms have done their business since March 2020, when the World Health Organisation declared COVID-19 a pandemic after the first cases of pneumonia in Wuhan City, Hubei Province (China) at the end of 2019.Since then, the economic scenario has changed a lot, disrupting firms' organisational routines, which posed serious difficulties, but also offering opportunities to firms (Amis & Janz, 2020) because it left them with no alternatives but to think about how to face this new situation (Arora & Suri, 2020).This unexpected event has revealed the importance for different organisations of having a systematic approach, based on resilience, to tackling future disruptions (Păunescu & Mátyus, 2020).However, COVID-19 is but one example of crises that increase uncertainty in the business environment where firms must survive and run successfully, thus urging them to learn how to be resilient to stay competitive in the future (Župerkienė et al., 2021).In this study, resilience is intended as the ability "to prepare for and effectively respond to crises; maintain core functions when a crisis hits; and, informed by lessons learnt during the crisis, reorganise if conditions require it" (Kruk et al., 2017, p. 602), in line with those studies adopting a dynamic capability view of resilience (e.g., Khan et al., 2019).In this scenario, SMEs are particularly susceptible to such unexpected events -they have actually been more affected by the consequences of crises such as COVID-19 due to their limited financial and human resources (Yu et al., 2021).Therefore, research in this domain is highly recommended (Župerkienė et al., 2021).
For the reasons mentioned above, the concept of resilience has gained momentum as one of the key factors for SMEs to respond appropriately to unexpected events, and it has captured the attention of academics and practitioners (Mubarik et al., 2021).Accordingly, the literature in this field has developed a lot in the last few years, putting particular attention on the antecedents of resilience.Notwithstanding this growing literature, research on the factors that contribute to resilience in SMEs is still limited (Daou et al., 2019;Saad et al., 2021).Moreover, despite finding some predictors comprised within, but not explicitly referred to, the areas of human, organisational, and relational capital, an overarching study is missing that would explore how these different components of intellectual capital intervene to foster SME resilience.Since IC has been put forward as an antecedent of dynamic capabilities (e.g., Hsu & Wang, 2012), exploring its relationship with resilience in SMEs seems promising.
On this basis, this article aims to answer the following research question: How can IC foster SME resilience?
To this end, we examine two cases of Italian SMEs that have been resilient in facing the disruption caused by the crisis brought about by the COVID-19 outbreak, and we explore how IC has fostered the development of resilience.
The remainder of the article is structured as follows: in the next section, we lay the theoretical foundation for our study.Then, we explain the methodological approach we used.Finally, we report the results of our analysis, discuss them in comparison with existing studies, and draw out their theoretical and practical implications.

The concept of resilience in dynamic environments
One of the key issues in the strategic management field relates to modifications in the environment and the subsequent reaction and adaptation on the part of firms through their strategic changes (Yi et al., 2015).In this context, in recent years, resilience is one of the most frequently used concepts that fits perfectly with the increasingly dynamic environment firms must face.
Researchers have not yet agreed upon a consistent definition of resilience, which results in substantially different conceptualisations throughout the literature based on the different disciplines and fields that have addressed it (e.g., Bhamra et al., 2011;Pillay, 2018).Looking at the evolution of the concept, resilience was first conceptualised as the ability of a system to absorb disturbing or disrupting changes and to bounce back to the previous normal status (Berg et al., 2018).Afterwards, the initial concept extended also to the capacity of a system to be prepared to change and to evolve or transform after stress (e.g., Odhiambo et al., 2020), which also shows the evolution to be a multifaceted, and beyond multi-disciplinary, concept (Kantur & Say, 2015).This indicates that organisations can be proactive, rather than reactive, and even emerge from the disturbing event in a better position.Therefore, resilience can be seen as a development process, rather than a final state of being, in an uncertain environment (Conz & Magnani, 2020;Southwick et al., 2017;Župerkienė et al., 2021), which means it entails both an operational and a dynamic capability perspective (Manfield & Newey, 2017).Indeed, resilience reflects the sensing, seizing, reconfiguring framework used to define dynamic capabilities, since it implies the ability to anticipate the negative consequences of uncertainties by being prepared for a changing environment, responding to it by investing into new resources, and transforming based on lessons learnt from experience -thus, reconfiguring the firm assets, structures, and mechanisms based on the changes in the environment (Khan et al., 2019;McManus et al., 2008).
The concept of resilience has been applied to a variety of domains.In the engineering domain, it was mainly adopted in the safety science area as the capacity of a system to modify its functions when a disturbance occurs.In the social domain, the focus was on the ability of individuals and communities to cope with external pressure and trauma.And, in the organisational domain, the emphasis was on how companies can act in response to rapidly changing business environment (Hosseini et al., 2016;Wiig & Fahlbruch, 2019).This study focuses on this last organisational area to investigate the resilience of firms facing changes in the business environment, of course beyond the health and social domains, brought about by one of the most serious crises of this era: that caused by COVID-19.Resilience may be the key to survival in such situations overall.For SMEs that are particularly sensitive to their environments, "managers should keep strength to continue business in all circumstances" (Župerkienė et al., 2021).

Resilience and IC in SMEs
Although SMEs are considered more flexible than large companies, they also have a limited capacity to positively adjust to major disruptions due to distinctive organisational insufficiencies such as the lack of strategic planning, a short-term focus in decisionmaking, and low formalisation and standardisation (Burnard & Bhamra, 2011).Indeed, in case of "black swan" events, SMEs are more likely to defer investments and reduce costs and expenses (Thorgren & Williams, 2020), in an attempt to preserve their position.It is not surprising that more SMEs than large companies report a strong negative impact of crises, including the one caused by the COVID-19 pandemic, on their business operations (Coles et al., 2021;Yu et al., 2021).Therefore, understanding how these firms may become more resilient becomes highly relevant and much work still needs to be done in this domain (Saad et al., 2021).
Most of the literature on resilience in the crisis management domain has highlighted the role of financial and physical resources in fostering resilience (e.g., Torres et al., 2019).However, given their limited resources, SMEs might find it difficult to develop resource redundancy, which is one of the strategies suggested for increasing resilience (Polyviou et al., 2019).For this reason, due to their resource constraints, SMEs are more likely to strongly rely on knowledge assets and on IC than on tangible assets (e.g., Inn et al., 2015), which makes IC a key success factor, potentially increasing competitive advantage (e.g., Demartini & Beretta, 2020;Massaro et al., 2015).The literature suggests that lower formalisation, combined with flexibility, pushes SMEs to emphasise HC more than structures and processes and to have a likewise less formalised accounting and managing of IC.At the same time, however, research still lacks knowledge about how SMEs use IC in practice (Demartini & Beretta, 2020) and about its consequences on resilience (Jia et al., 2020), which has been proven to positively influence SME competitive advantage and performance (Ingram & Bratnicka-Myśliwiec, 2019;Thomas et al., 2016).
IC is intended to be a key source of competitive advantage for which researchers agree on its main components, namely human capital (HC), organisational capital (OC), and relational capital (RC) (e.g., Agostini & Nosella, 2017;Choo & Bontis, 2002;Edvinsson & Malone, 1997;Roos & Roos, 1997).HC can be defined as a combination of individual characteristics and talents, which includes knowledge, skills, competences, education, motivation, and leadership (e.g., Chen et al., 2004;McManus et al., 2008).In SMEs, where HC is deemed the main component of IC (Daou et al., 2013), the role of the CEO is fundamental, so that her or his education, experience, and motivation become sources of competitive advantage (e.g., Asah et al., 2015;Chen et al., 2004), along with employees' education, experience, and knowledge (Felício et al., 2014).OC is the infrastructure that backs HC (Reed et al., 2006) and includes the knowledge embedded in the processes, structures, technology, systems, routines, practices, and cultures of firms (e.g., Daou et al., 2019;Mohammadi & Taherkhani, 2017;Montequín et al., 2006).Lastly, RC, also called social capital (SC), refers not only to the internal and external relationships but also to the way the firm is perceived from the outside (e.g., Loulou-Baklouti & Triki, 2018).From an internal standpoint, RC captures the set of relationships existing in a specific context that permits social interconnections, communication, and sharing of knowledge (Anklam, 2002;Putnam, 2000), whereas, from an external viewpoint, RC encompasses the knowledge and resources embedded in the relationships of the firm with external partners (Buenechea-Elberdin et al., 2018).
To have a comprehensive overview of existing literature dealing with both IC components and resilience, we carried out two structured queries in the Web of Science.The first aimed to retrieve articles investigating IC components (i.e., human, organisational, structural, relational, and social capital) and resilience, while the second focused on articles about resilience specifically in the SME context.
This body of literature is quite recent, and there is an increase in the number of publications regarding the relationship between IC components and organisational resilience in the last few years.Relational capital, mainly in terms of networking, has received the most attention, proving that social networks may provide fundamental resources for dealing with crises in a resilient manner (Morsut et al., 2022), overall, for SMEs (Coles et al., 2021;Păunescu & Mátyus, 2020;Mzid et al., 2019;Torres et al., 2019;Herbane, 2019).Regarding HC and organisational resilience, Shela et al. (2021) maintain that the right competencies and qualities of people within firms are fundamental for leveraging other assets to build resilience.Thus, "the core factor for an organisation's resilience is none other than its human capital" (Shela et al., 2021, p. 2).Menéndez Blanco and Montes-Botella (2017) test the relationship between HC and resilience empirically, finding support for a sample of Spanish manufacturing firms.For SMEs, the inseparability of managers or entrepreneurs from the organisation is also reflected in resilience (Herbane, 2019).Moreover, low hierarchy, close relationships, commitment and respect among employees, and long employee tenure are also resilience-enhancing resources for SMEs (Polyviou et al., 2019).In addition, some factors in the psychological domain, such as realistic optimism (Prayag et al., 2020;Wall & Bellamy, 2019), seem to foster resilience.In terms of OC, factors that are deemed relevant for resilience are the formalisation of planning activities and strategic choices about location, creating, and maintaining routines (Haase & Eberl, 2019); ambidexterity capabilities (Iborra et al., 2020); proactive risk management (Parker & Ameen, 2018); change management processes, communication, and network processes (Gover & Duxbury, 2018); and creative climate (Jilani et al., 2019).Despite the increase of interest around the topic of IC and resilience, most contributions analyse single components, without an overarching perspective embracing the whole IC domain; furthermore, only a few focus on SMEs, thus encouraging further investigation of the factors that influence resilience of SMEs (Saad et al., 2021).On this basis, and in line with recent literature on organisational resilience (Conz & Magnani, 2020;Herbane, 2019;Župerkienė et al., 2021), the purpose of this article is to unveil how IC may foster SME resilience by embracing an overarching IC perspective.

Case selection, data collection, and analysis
Considering the exploratory nature of our study, we opted for a qualitative methodological approach based on the longitudinal analysis of case study.
Cases were selected purposively based on the following criteria: firms had to be SMEs, as defined according to the European Commission; and firms had to show a high level of resilience in facing the challenges posed by the COVID-19 outbreak, which means they had to show an ability to be ready to face, respond to, and transform after this crisis.Paragraph 3.3, after the case description, demonstrates the resilience of the two firms during the COVID-19 emergency.
Based on such criteria, we selected two cases, namely Polo GGB and Nanoprom, that are our units of analysis.We chose these two cases because, beyond respecting the criteria set above, they operate in different sectors, with different approaches to the market, and with different business models.At the same time, they also show a similar pattern in dealing with the crisis, which helps in distinguishing idiosyncratic patterns, typical of single-case studies, from general patterns, following the approach of previous studies (e.g., Karhu & Ritala, 2021;Seidl & Werle, 2018).Therefore, the purpose of the case study design was to provide literal replication, i.e., cases are selected to predict similar results (Yin, 1989).Moreover, these cases allowed us to study our matter of interest "in depth and over time" (Patton, 1999, p. 266), which was not easy in such a critical moment.These firms are located in Italy, where the virus spread dramatically, and which was one of the countries most affected by COVID-19.The crisis that followed was serious and characterised by a proliferation of problems to be solved in a very short period, which pushed a variety of responses on the part of firms, thus creating an interesting scenario for investigation (Mariano, 2021).The ability these two firms showed in being prepared, responding to, and transforming after the challenges posed by the virus provided us with the perfect context to analyse a complex phenomenon in real-time, in line with the recent call for rich and contextualised qualitative approaches in innovation management (Ritala et al., 2020).
Data collection consisted of multiple in-depth, direct interviews with the CEOs and their collaborators.These were based on a research protocol constituted by two parts: the former was a semi-structured set of questions investigating events in real-time and retrospectively piecing them together with the situation before the crisis, used in the first rounds of interviews to unveil emerging IC elements significant for enhancing resilience; the latter was a more structured part meant to understand which IC elements were more important to be prepared to face the crisis, to respond to the crisis or to improve/transform the firm after the crisis.Both parts were used as a basis to start the discussion with interviewees.The CEOs were chosen as the main key informants because of the prominent role they play in SMEs, which leads to their being involved in all decision processes and, thus, ensures a profound knowledge and understanding of the firm activity, initiatives, and strategy.Moreover, we interviewed some employees and consultants working for the firms and obtained further details and explanations at different levels in the organisation.All of these interviews, four with each CEO and four with other informants, and carried out at different moments in time to follow the course of events, were recorded and transcribed to increase reliability.Table 1 presents the details of the interviews.
To further increase the validity of the study, we triangulated data collected from primary sources of information with those from secondary sources, such as articles, reports, and YouTube videos, that is triangulation of sources.Moreover, multiple analysts (i.e., the authors) reviewed findings, that is analyst triangulation (Patton, 1999).
To further increase construct validity, we asked the key informants to review the case study draft.
Data analysis started with the coding of direct quotes into sub-dimensions, which were then aggregated into dimensions and themes (e.g., Yin, 1989).This was theory-driven (Ryan & Bernard, 2000) because dimensions and themes were already known in the literature on resilience and IC introduced in the previous section (see, Figure 1 for an example).Then, by using tables and matrices, we tried to understand which elements of the IC components were relevant in the pre-crisis phase (i.e., before the COVID-19 outbreak), during the acute crisis, and in the post-crisis phase, along with a preparerespond-transform process viewpoint (Conz & Magnani, 2020), and in line with the circular process approach used by Kruke (2012) to study crises.

Case description
Polo GGB, founded in 2011, carries out research and offers products and services within three scientific areas: Genomics & Bioinformatic, Ecology and Genetics, and Immunology.At the beginning, it employed around 8 people, but it has been growing a lot and, today, it counts 33 employees.Different media outlets 1 have presented Polo GGB as a dynamic centre of excellence, able to rapidly adapt the results of the research to the context of firms, as reflected by the ability with which they conceptualised and executed COVID-related projects.This further supports the words of the CEO ("Our strength is reaction to changes") and our choice of this case for the purpose of this study.Nanoprom Chemicals Srl was born in 1997 as one of the first Italian firms focusing its business on the research and application of nanomaterials.In the last decade, Nanoprom focused mainly on offering special solutions for the treatment of surfaces using nanotechnologically advanced substances, which allows clients to save money, to be more sustainable, and to increase security in different sectors.Nanoprom has made innovation and flexibility key success factors, which is demonstrated by the variety of sectors to which its clients belong and by its ability to execute COVID-related projects.National and international media outlets 2 have publicly recognised this ability as a case of excellence, just as one of their consultants did: "I've collaborated with many firms, but I've never worked in such diverse projects".
Finally, yet importantly, Polo GGB and Nanoprom have been involved in several projects that have a high technological and scientific value, showing a high capacity to deploy these projects in an efficient and accurate way.This demonstrates an ability to respond promptly to the crisis.

Actions implemented to cope with the COVID-19 outbreak
Polo GGB and Nanoprom coped with the COVID-19 outbreak along two main directions, namely business continuity and the exploitation of new opportunities offered by the changing scenario.Regarding the former, the CEOs explained that they had a pandemic plan containing instructions and guidelines on how to maintain the activity of their firms in case of a widespread outbreak such as COVID-19.Following these guidelines, the work of employees was reorganised to combine smart working with working in person, which implies the re-organisation of teams, allocation of resources, and, above all, assuring employee safety and wellbeing.

Polo GGB
Nanoprom "We designed an active surveillance program to make all employees feel safe within the company".(CEO) "We made an effort to guarantee the respect of all rules to ensure a safe working environment". (CEO) From a more external viewpoint, the two firms tried to maintain contacts with their stakeholders, with particular attention to supply to avoid the lack of materials, components, and everything necessary to feed production processes, thus assuring the manufacturing of products and realisation of services.

Polo GGB
Nanoprom "We ordered more materials to avoid stock-out".(CEO) "First of all, we had to maintain the business activity".(CEO) In this scenario, beyond guaranteeing the ongoing activity of the firm, the CEOs of Polo GGB and Nanoprom, who hold the responsibility of launching and managing projects for their respective firms, immediately sense the opportunity to use their competences first to help the society in that tough situation, and then to make business.

Polo GGB
Nanoprom "We are able to help, and we are able to do business in this situation".(CEO) "I felt the urgency of helping [. ..], and then I realised it could also be a business".(CEO) Polo GGB focuses on four projects: the purpose of the first one is to generate a monoclonal antibody to treat the SARS-Cov-2 infection and to develop a serologic test to discover whether a person has developed antibodies against the SARS-Cov-2 infection, whereas the aim of the second one is to realise a realtime swab to detect the infection by SARS-Cov-2.The third and fourth projects are realised in collaboration with external partners: the former, thought to increase safety in workplaces, concerns the identification of groups of workers who are more likely to be affected by the SARS-Cov-2 infection based on a platform for contagion risk management, whereas the latter entails a collaboration to develop and verify a method to test the presence of SARS-Cov-2 in PM10 particles using filters made available by local agencies for environmental safeguard.
In the case of Nanoprom, there are three main projects: a facemask, a surgical stamp, and an antiviral coating.The single voile face mask is realised in polyester and cellulose (instead of polypropylene), and CE certified, which permits a significantly lower impact on the environment.For this reason, Nanoprom has been awarded the first prize of the fourth edition of the "Open Innovative SME Award", organised by Grant Thornton, in the "environmental sustainability" category.It is also interesting to note that the company sells the masks at a very competitive price that is lower than the one established by the government, and it gives these masks for free to families with three or more children.Within the same domain of use, Nanoprom has realised a surgical stamp that can be applied to FFP2 masks, defined as opportunistic masks, thus allowing healthcare staff to use only those masks instead of also adding a surgical mask, which is the common practice.The stamp is treated with a special antibacterial and antiviral varnish, tested also by the Technopole of Mirandola.This solution leads to a lower weight (0,5 against 3,5 grams) and a significantly lower environmental impact than the traditional solution.Finally, Nanoprom has realised the first anti-Coronavirus varnish (certification for ISO18184 pending).This graphene-based coating could be applied to ambulances, hospitals, school desks, and also on face masks to make them "virusfree" within 25 minutes.
The readiness and efficiency, shown both in implementing the operative actions to face the emergency and in launching several high-quality new projects, demonstrate a high level of resilience in the two cases.The subsequent section illustrates how IC fostered resilience.

IC to be prepared for the COVID-19 outbreak
When asked about the factors that allowed them to be prepared to face the COVID-19 outbreak, the respondents of both firms mentioned elements of the human, organisational, and relational capital.Within the HC domain, high importance is given to the employees' high level of education, their knowledge (mainly in terms of skills, always trained and updated), and their ability to solve complex problems.The management acknowledges this ability by offering both monetary and non-monetary recognition (i.e., attention to their needs) to increase employee satisfaction.On the other hand, employees recognise the strong leadership of their CEOs.In the OC sphere, three elements seem to make the difference.The first is the culture transmitted by the management that works actively with employees, appreciating ideas coming from them and always tending towards improvement.The second is the ability to innovate both products and markets (i.e., innovation capital), following structured methods to manage innovative projects.The third is the capacity to establish processes that are efficient and effective in carrying out the business (i.e., process capital), such as having resources able to manage innovation, to help employees of different functions or specialisations interact and share knowledge thanks to open communication channels; as well as maintaining contacts with suppliers during R&D projects and keeping performance under control.

IC to respond to the COVID-19 outbreak
When the COVID-19 pandemic spreads, the two firms show a great ability to respond to this disruptive change, both carrying out the standard activity and implementing new projects, as described in the previous paragraph.The informants explained that this prompt reaction was possible thanks to the strengthening of some elements and the introduction of some new ones in the domains of human, organisational, and relational capital.
As far as HC is concerned, training employees on new issues and rewarding them are enhanced, whereas both firms, for the first time, rapidly take stock of the situation in terms of available competences and technologies for the required activities and then hire new technical and managerial competences to work on both old and new projects.At the OC level, the innovative attitude towards expanding the product portfolio and exploring new markets is boosted thanks to the possibility of realising radically new products for the firm and entering completely diverse markets offered by the COVID-19 outbreak.At the level of process capital -beyond increasing interaction among the different levels of the organisation and between R&D employees and suppliers, which becomes central in coordinating action to respond to the crisis -both firms introduce some new elements: new ICT tools to support this interaction, and new intermediate managers to transfer some responsibility from the CEO to middlemanagement roles.This latter aspect is also complemented at lower levels by a cultural shift towards employees' empowerment, thus making the organisation faster to respond to changing conditions.Regarding RC, external relationships play a major role in supporting the response of the two firms.Both further exploit the collaboration with technical expert suppliers and exploit the possibility of enlarging their partner portfolios for new projects.In parallel, they introduce two relevant elements: a strong focus on customers and an attention towards sustainability in all of its dimensions -namely, economic, social, and environmental -in this moment, when customer needs are overturned, and everyone feels more sensitive to this issue.

Polo GGB
Nanoprom "We are relying on external partners, some of which are new ones, to start new projects easily and promptly".(CEO) "The pandemic made us feel the importance and possibility of working for the environment along a sustainability perspective".(CEO) Some products "are fundamental for the customers in this period and more than ever we must satisfy their needs".(CEO) "They had never approached the biomedical sector before, but they could do that, with a strong external support to internal competences".(Consultant)

IC to transform after the COVID-19 outbreak
It is noticeable that the changes in the economic environment caused by the COVID-19 pandemic are not confined to the moment of the outbreak, but they push a reflection in the two firms analysed, leading to a learning process that drives them towards a transformation that is still ongoing.At the HC level, both firms understand the importance of systematising the mapping of employees' competences and knowledge, making them aware of their knowledge gaps.This paves the way to hiring new employees with technical and managerial competences to follow the line of product and market expansion started during the pandemic.CEOs decide to continue investing in employee training as a key element of exploring and exploiting new possibilities.Always regarding employees, after understanding the importance of being ready with everything working well, CEOs decide to introduce a formal evaluation of employees' jobs.This is accompanied by the enhancement of elements belonging to the OC sphere, that is, the empowerment of employees and the proactive exploration of new potential businesses, which also becomes more systematic after the positive experimentation during the pandemic.Moreover, the tendency towards introducing new middle-management roles and investing in ICT tools continues after the COVID-19 outbreak in both firms.A few new elements are added: one is related to the fact that, with increasing visibility of the new projects, CEOs understand the importance of being aware of the company brand, whereas another concerns the necessity the CEOs feel of augmenting the flexibility of project teams.

Polo GGB
Nanoprom "Flexibility has proven to be key in responding to the pandemic; therefore, making teams more flexible could help us in adapting to changing conditions in the future".(CEO) "ICT tools have facilitated our job when pressed, thus we aim at further developing them".(Employee) "Acquiring more visibility with the new projects, we have recognised the importance of the brand".(CEO) "We have understood we have enormous possibilities in diverse markets, and we want to exploit them".(CEO) "We've to strengthen our ICT tools".(CEO) "Firms and people have started knowing our firm and we must be aware of this".(CEO) "Obtaining these results has given us awareness we can present our firm differently" (Employee) Finally, at the RC level, attention to sustainability increases also after the COVID-19 outbreak as a point of no return, together with the focus on customers and continuous enlargement of the portfolio of external partners.

Discussion of findings
This study aimed to uncover how IC can foster resilience to crises in SMEs.
The two SMEs examined demonstrate great preparedness in responding to the disruptive changes caused by the COVID-19 outbreak, in terms of both facing the challenges and exploiting new possibilities, in addition to showing an inclination towards transforming after the outbreak based on what they have learned during the previous experience.All three components of IC contribute to this ability, with elements of HC, OC, and RC emerging in different moments during the prepare-respondtransform process, as Figure 3 exhibits.On the one hand, there are some HC, OC, and RC elements that the two firms possessed before the crisis, which we call IC hard-core.Some of them remain stable along the steps of the resilience process (we refer to this as the Stable IC hard-core), whereas others are enhanced to respond to the crisis (we refer to them as IC hard-core enhanced for responding).On the other hand, there are other elements that the firms did not possess before the crisis, but they developed/introduced them along the resilience process.Some of them, called Emerging IC for responding and enhanced for transforming, are introduced rapidly in the response step to face an urgency; then firms further elaborate on them, and structure them after having recognised their usefulness for their future business.Some others, named Purposeful IC for transforming, are developed later in the process, that is, in the transformation step, when the CEOs reflect upon further possible improvements based on the recent experience.
As far as the Stable IC hard-core is concerned, the two firms possess a sizeable IC hard-core made up of a variety of factors within human, organisational, and relational capital: a strong base of knowledgeable and skilled employees who are highly educated and motivated by the CEO that is, in turn, inserted in an organisation with structured processes and innovation and with a culture of continuous improvement in the whole firm.The relational capital is also characterised by a set of relationships with external partners and the high reputation of the CEO.While these elements remain stable before, during, and after the outbreak, some others are enhanced to respond to the crisis, i.e., IC hard-core enhanced for responding.This includes rewarding employees, in the domain of HC, in order to recognise the extra effort made by employees in a difficult situation.In terms of OC components, innovation capital was enhanced, with reference to the ability -already possessed before but boosted during the response phase -to experiment with radically new products and explore completely new markets thanks to the new opportunities offered by the changing scenario.Process capital follows this line, supporting innovation with augmented interaction among employees, with the CEO, and with suppliers, which is aimed at making everything more efficient.In addition, strengthening relationships with suppliers for the development of new innovative projects is relevant in the RC domain.
Regarding Emerging IC for responding and enhanced for transforming, it is focused on understanding whether the HC is sufficient for responding to the crisis and, if not, deciding whether to enlarge it with new competences through training employees or hiring new resources.Due to the pressure created by the need to respond rapidly to the crisis, new organisational practices and processes are also created, such as the empowerment of employees, the creation of new middle-manager roles, and the introduction of ICT tools.External relationships are expanded to deal with the challenges of the new projects.These actions do not result from a deliberate strategy during the crisis, but emerge naturally from the pre-existing organisational context and structure.Afterwards, both firms demonstrate an ability to follow up on these emerging IC elements and build on them to increase competitiveness.Essentially, they realise they could expand their business in areas they would have never thought about, if they were not forced to do it to respond to the pandemic.This follows the line of the research stream connecting IC with organisational learning (e.g., Hsu & Fang, 2009) The idea of learning is the essence also of the subsequent transformation step, where the CEOs reflect upon further improvements, based on the experience of the crisis.Indeed, not only are some elements further improved in the transformation step, but new ones (i.e., Purposeful IC for transforming) are introduced.CEOs further reflect on HC and OC.Basically, they understand the importance of commitment and motivation at the individual level and of culture and flexible innovation processes at the organisational level.On this basis, first, they act to make everyone more aware of the company brand, considering the increased exposure obtained during the crisis.Second, despite having cross-functional teams, they opt for introducing a certain degree of flexibility in teams, acting on job roles and activities, and in evaluating the performance of employees, of course to be matched with a reward system.
With respect to previous literature on the role of IC on SME resilience, our results confirm that SMEs rely heavily on IC that represent a large part of their assets balancing their resource constraints, in line with Inn et al. (2015).It seems that all three components of IC jointly contribute to resilience in a significant way; and HC is stressed as fundamental because people in SMEs are at the core of all decisions and processes, thus further sustaining the view of Shela et al. (2021).However, it is not the only significant form of capital involved.Indeed, RC -in terms of networking with external parties, as put forward by Păunescu and Mátyus (2020) and Herbane (2019) -also plays an important role in the different steps of the resilience process.In this regard, our study provides empirical support to the study by Morsut et al. (2022), which proposed a conceptual model linking social capital with resilience.Moreover, our study goes beyond social capital by also considering another aspect of RC, that is, reputation, both in terms of the reputation of the CEO and of being perceived as a sustainable company, which seems to be an element enhancing resilience post-crisis.Considering the internal component of social capital, aspects such as commitment and interaction among employees, as well as low hierarchy, highlighted by Polyviou et al. (2019) and Daou et al. (2019), are confirmed to be relevant.Our research offers new insights about OC that have been overlooked by previous studies on resilience.In addition, our study is among the first to take a process perspective in investigating the role of the different components of IC in fostering resilience.It, thus, emerges that SMEs have some hard-core IC elements, already in place before the crisis, which, combined with some new IC elements, allow them to navigate the preparerespond-transform period.
In our cases, informants do not mention geographical proximity among decision makers or long employee tenure as resilience-enhancing resources, in contrast to the findings of Polyviou et al. (2019).Along the same line, aspects related to hope, religious beliefs, or the support from family and friends, which were among the most relevant IC elements identified by Daou et al. (2019), Prayag et al. (2020), and Wall and Bellamy (2019) when talking about psychological elements, do not emerge from our cases.Some of these similarities and differences may be attributed to the different settings of those studies, in the sense that, in the Islamic State of Iraq and in Syria (Daou et al., 2019), the influence of religion in all aspects of life is more relevant than in countries such as UK, the US, or Italy.In addition, the difference between results related to RC may be supplemented by the fact that Daou et al. (2019) focus on entrepreneurial resilience, whereas Herbane (2019) and the present study focus on organisational resilience.However, the psychological domain does not emerge as a significant aspect, which would need further inquiry.
Figure 3 depicts the different IC components that foster the resilience process at the different steps.

Implications, limitations, and future research
This study has some interesting theoretical and practical implications.
From an academic standpoint, the present article extends the literature on IC and resilience in the context of SMEs, shedding light on the different elements of IC that foster the ability of these companies to prepare for, respond to, and transform through crises such as the COVID 19 emergency.Besides taking an overarching perspective that embraces human, organisational, and relational capital in addressing the phenomena (which had never been done before, to the best of our knowledge), the article points out the role the various IC elements have in the three steps of the resilience process: the IC hard-core elements represent the foundation for the subsequent "respond" and "transform" steps, where some new IC elements first emerge and then are put in place as purposeful actions by the organisations.This longitudinal study offers new insights and an interesting evolutionary approach to fostering resilience in SMEs through IC along a process perspective.Starting from our findings, other studies can develop this literature further by deeply investigating the interplay among the different IC components, as well as by shedding light on the interplay between organisational resilience and entrepreneurial resilience, which seems fundamental in the SME context.
From a managerial viewpoint, the cases show that there is not a specific component of IC that allows SMEs to be resilient, but that, on the contrary, it is a combination of different human, organisational, and relational elements that fosters organisational resilience.All these elements should be nurtured and further developed by the entrepreneur and the company to assure the achievement of resilience; as often happens in SMEs, some IC elements are developed without a deliberate strategy and then become part of the organisation.In this context, the CEO plays a fundamental role since, from one side, internally, she or he feeds the culture, and interacts with and empowers the employees; and, from the other side, externally, she or he testifies to the company's reputation and communicates with external stakeholders.Moreover, managers of SMEs should call attention to the elements that their firms are not always familiar with but that seem to be particularly useful for facing disruptive events, such as continuous training and appropriate rewarding of employees, the introduction of middle-level manager roles, structured processes, updated ICT tools to support everyday activities, a collaborative attitude both inside and outside the boundaries of the firm, and attention to brand and reputation.Beyond that, a deliberate strategy that takes the development of IC into account could prove fundamental to remaining competitive and, in some cases, to avoiding failures in case of unexpected, changing conditions in the business environment.Also, policy actions could be directed towards a greater sensibilisation of SMEs on these matters.
We must recognise that our study has some limitations, from which some other interesting avenues for future research, beyond those suggested above, emerge.Firstly, the findings of the two cases are relevant for similar situations and settings (Rivera, 2008;Yin, 2013) but cannot be applied for statistical generalisation or to different contexts.Indeed, future studies can enlarge this analysis by studying firms belonging to different industries, with different sizes and different levels of technological innovation, thus suggesting different ways to build resilience in different contexts.Along the same lines, and based on the considerations made above regarding the difference between developed and developing countries as far as resilience is concerned, other cases in developing countries could make other IC-related antecedents of organisational resilience emerge.Secondly, because we have stressed the similarities between the two cases, future studies could investigate cases in which different IC elements lead to increased resilience, or cases of resilience and non-resilience for different reasons.Thirdly, because there should be other drivers or enablers of SME resilience that we have not considered in this study, future research could understand what other elements can interact with IC to further enhance resilience.Finally, we have mentioned learning in our study, but without providing a learning lens to the interpretation of our results.Thus, studying resilience in association with organisational learning could be an interesting path for future research.

Figure 1 .
Figure 1.Example of coding -Main dimensions and themes emerged during the interviews.
Figure 2 presents an overarching picture of the IC elements that support firms in fostering the preparerespond-transform resilience process.

Figure 2 .
Figure 2. Overview on how IC may foster the prepare-respond-transform resilience process.

Figure 3 .
Figure 3. Evolution of IC elements over time.

Table 1 .
Details of the interviews.
As far as RC is concerned, the two components of external relationships and reputation are identified.Regarding the former, the two firms have established consolidated relationships with suppliers, customers, and other external parties, some of which have technical competences, whereas as regards the latter, a high reputation of the CEO facilitates resilience, in that it can more easily open new opportunities if he or she is considered a trustworthy and talented partner.
, as explained by the entrepreneurs.