The Most Underrated Business Strategy: Resilience
gettyMaybe your goal is to build a dominant enterprise and conquer the world. Maybe it’s to run a profitable business, care for your team and enjoy a life outside of work. Or, maybe you’re somewhere in between. The exact same operational disciplines serve those ambitions.
Better processes, stronger systems and clearer visibility help you build an organization that earns more, relies less on daily heroics and adapts when conditions change. Whatever you want from your business, making it resilient gives you the freedom to get there.
Look back at March 2020. No business analyst predicted the global shutdown. The businesses that emerged strongest weren’t better at forecasting; they were better at adapting when conditions changed overnight.
That ability is resilience, and it doesn’t develop in the middle of a crisis.
Resilient businesses build resilience through continuous improvement. Rather than resting on their laurels, they tend to adopt more efficient processes, upgrade their systems and implement benchmarking practices that highlight where to improve. When conditions change suddenly and dramatically, they respond because adaptation is already part of how they operate.
Most shifts aren’t as dramatic as a global pandemic. Organizations are constantly adjusting to new technology, changing customer expectations, emerging competitors, rising costs and shifts in the labor market. Continuous improvement makes it easier to respond to those changes, too.
Every five to seven years, something disrupts business as usual. You can’t build a business around predicting the next black swan, but you can build one that’s prepared to adapt when it arrives.
Businesses often focus on the disruption that just happened and build defenses against it, but the odds of the exact same event repeating in the same way are slim.
Think about all the ways your business could be disrupted: supply chain breakdowns, inflation, labor shortages, cybersecurity threats, emerging technology. You could spend all your time and resources planning for every possible disruption and still get blindsided.
The better question is whether the business itself is strong enough to adapt.
How dependent are you on a handful of key individuals? How quickly can you change a broken process? Do you have a clear, accurate and timely picture of your business to make informed decisions when the stakes are high? Can your systems accommodate a new way of working? Can you absorb a setback without immediately going into crisis mode?
Disruption rarely arrives with a press release or a global crisis. More often, it looks like a sudden 8% supplier cost increase that fails to pass through to customer quotes, a key account shifting order patterns, or freight costs creeping up unnoticed over two quarters. If your systems can’t surface those leaks in real time, a minor shift in market conditions can turn an otherwise healthy P&L upside down.
That’s the resilience mindset. Stop trying to predict every possible problem and start building a better business.
Building resilience shouldn’t add to your workload; it should reduce it. If your business requires extraordinary effort to respond every time something goes sideways, then that is heroism, not resilience.
Heroism is exhausting and unsustainable.
The work you do now to improve processes, eliminate unnecessary manual work, strengthen systems and give leaders better operational visibility should make the business easier to run, not harder. It also makes your organization far less dependent on you when conditions change.
A heroic leader can drag a company through a crisis. A resilient organization doesn’t need to be dragged.
Create processes that are efficient, repeatable and visible. With reliable data and objective benchmarking, you can clearly see where the business excels and where profits leak through manual workarounds.
Operational resilience means replacing “tribal knowledge,” where critical processes live only in the heads of a few legacy employees, with standardized systems. The less your business relies on individual heroics during normal conditions, the faster your team can pivot when market conditions change.
Use technology to make the business more adaptable, and don’t just adopt technology for technology’s sake. Invest in core systems that solve foundational business problems, reduce dependence on manual touch points and give your team clean data to make better decisions. Avoid piling short-term fixes on top of legacy issues until your technology becomes another constraint on the business.
Leadership resilience makes technological and operational resilience possible. Create a culture that embraces change and gives people the information and authority to make good decisions without waiting for perfect certainty. Better systems and processes reinforce that culture, making it easier for people to respond quickly when conditions change.
You don’t need to be chasing 10X growth to care about resilience. If you’re making a good living, taking care of your employees, and you have no desire to build an empire, that’s completely valid.
But you still need to protect what you’ve built.
Don’t get complacent because business is good today, and don’t assume you can navigate the next disruption through sheer willpower. Use the good times to improve the processes, technology and decisionmaking that determine how quickly you can adapt.
A business that operates with clean data, predictable margins and repeatable workflows commands a higher valuation, lower cost of capital and greater strategic options. Whether you plan to pass the company to the next generation, execute an exit in five years or simply run a profitable enterprise for decades, operational discipline is what grants you control over your own timeline.
You can’t predict what will next disrupt business as usual. You can decide how strong your business will be when it does.
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