The Quest for Resilience
Publication Year: 2003
Journal: Harvard Business Review
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. Today, getting different is the imperative. It's the challenge facing Coca-Cola as it struggles to raise its "share of throat" in noncarbonated beverages. It's the task that bedevils McDonald's as it tries to restart its growth in a burger-weary world. It's the hurdle for Sun Microsystems as it searches for ways to protect its high-margin server business from the Linux onslaught. Continued success no longer hinges on momentum. Rather, it rides on resilience-on the ability to dynamically reinvent business models and strategies as circumstances change. Strategic resilience is not about responding to a onetime crisis or rebounding from a setback. It's about continually anticipating and adjusting to deep, secular trends that can permanently impair the earning power of a core business. It's about having the capacity to change even before the case for change becomes obvious. To thrive in turbulent times, companies must become as efficient at renewal as they are at producing today's products and services. To achieve strategic resilience, companies will have to overcome the cognitive challenge of eliminating denial, nostalgia, and arrogance; the strategic challenge of learning how to create a wealth of small tactical experiments; the political challenge of reallocating financial and human resources to where they can earn the best returns; and the ideological challenge of learning that strategic renewal is as important as optimization.