In Brilliant Manoeuvres, I wrote about the need for resilient and robust lines of communication: the ability to bounce back and resist disruptions in supply and logistics, both incoming and outgoing.
But the concept of robustness is just as important in business strategy and commercial tactics. Too often, companies develop a strategy or a business model that is exquitely designed for a particular (and temporary) set of economic conditions. When these change, the company is left high and dry. I was reading about a manufacturer in southern Ontario that decided to specialize in supplying machinery and components to the oil industry. The business invested in retooling and recapitalizing to meet the demands of increased oil prices. Now that prices have collapsed in that sector, exploration and production has been pulling back, so the company is left high and dry.
Don’t get me wrong. I’m all for diversification away from traditional business models and the strategies that have gotten you success in the past. But you have accept that your plans might not go exactly the way you expect them to. As they say in the Army, a plan is only good until you cross the start line. This is why robustness and resiliency are essential, in strategy as well as logistics and supply. Here are the four principles of robustness and resiliency:
Redundancy: Don’t put all your eggs into one basket. Ensure you have multiple business lines and business models, and take deliberate, incremental steps away from exhausted strategies before you are in crisis mode.
Reaction: Keep reserves and develop internal flexibility of resources and capabilities to react quickly and effectively to opportunities and threats.
Responsiveness: Internally, be on the lookout for changing morale, capabilities, resources, and information. Externally, deliberately seek opportunities and threats in a constantly changing competitive battlespace.
Anticipation: Expect change and uncertainty. Build them into your projections and models. Assume you have limited information and develop a range of scenarios so you are not caught in the shallows when the tide runs out.
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