The Quest for Resilience

11 02 2010

“The world is not only changing but changing in ways that simply cannot be anticipated.”

Four Challenges:  Cognitive, Strategic, Political, and Ideological

>Denial – anticipate the worst as opposed to denying that defeat can happen. 1) “Senior managers must make a habit of visiting the places where change happens first.” “…see change close-up” 2) “You have to filter out the filterers.”  Find the trusted people who can anticipate change.  “Talk to potential customers who aren’t buying from you.  Go out for drinks and dinner with your most freethinking employees.” 3) Realize that strategies decay because they can get *replicated and they *lose their distinctiveness.  “Strategies get exhausted as markets become saturated, customers get bored, or optimization programs reach the point of diminishing returns.”

>Variety – matters. Companies need to make several smaller monetary bets instead of going into large risk endeavors.  They need to launch a “swarm of low-risk experiments,” or ‘stratlets.’ (I.E. 1000 ideas turn into dozens of ‘stratlets,’ which may create a few real successes)

>Resources – you must free up your resources so you can “support a broad array of strategy experiments within the core business.”  Businesses can “invest too much in ‘what is’ and too little in ‘what could be.’  With resources, companies need to “distinguish between new ideas and risky ideas.”  Be careful that your company is not “operationally efficient and strategically inefficient.”

>Optimization – is different than resiliency and requires that you change to meet needs.

Resilience in strategy is:  “It’s about continuously 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 before the case for change becomes desperately obvious.”

The single statement that captures the author’s ideas would be in this question:  “But where is the reinforcement for (1) strategic variety, (2) wide-scale experimentation, and (3) rapid resource development?”  Variety, experimentation, and resources were the core of this article and of the four challenges.

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