Some companies that used to be shining stars no longer exist. Think about Kodak, Blackberry, or Nokia. Other companies have weathered the test of time and survived and thrived through the most turbulent times; think about Lloyd’s, which has grown for over 330 years to become the world’s largest insurance market. But how can companies achieve strategic resilience and longevity?
Some companies demonstrate remarkable longevity, having survived the direst crises, recessions and shocks. What’s the secret to continuous growth and survival? Strategic resilience. Some firms are able to reinvent and adapt their business models before circumstances change. But how do they do that?
- In less turbulent times, executives had the luxury of assuming that business models were more or less immortal. Companies always had to work to get better, but they seldom had to get different — not at their core, not in their essence.
- Successful companies, particularly those that have enjoyed an uncompetitive environment, find it very difficult to re-invent their business models. When confronted with high turbulence, their success tends to diminish (think about Blackberry or Nokia).
- Continued success no longer hinges on momentum. Rather, it relies on strategic resilience – the ability to dynamically reinvent business models and strategies as circumstances change.
- Strategic resilience isn’t about responding to one-off crises or responding to setbacks. It’s about having the capacity to change even before the case for change becomes obvious.
To achieve strategic resilience, businesses have to overcome four challenges:
- The cognitive challenge: companies must become free of denial, nostalgia, and arrogance
- The strategic challenge: resilience requires alternatives and awareness; the ability to create new options as compelling alternatives to dying strategies
- The political challenge: an organisation must be able to divert resources from yesterday’s products to tomorrow’s
- The ideological challenge: businesses need to shift their mindsets from optimising business models to exploring alternative sources of success.
Why should companies invest to build strategic resilience? Because a company that is able to make sense of its environment, generate strategic options, and realign its resources faster than competitors will enjoy a decisive advantage. It will provide the ultimate competitive advantage in turbulent times. That is the essence of resilience.
Why does this matter for businesses?
As the world is becoming more turbulent, uncertain, novel, and ambiguous, businesses that demonstrate resilience to any kinds of shocks or changing circumstances will enjoy competitive advantages.
As society and business moves towards a digital future, building cyber resilience is becoming more important as a foundation for continuous growth.
The four challenges that stand in the way to building strategic resilience – the cognitive, strategic, political and ideological challenge, also hold true for building cyber resilience.
