We’ve all been wondering for at least the last several months what tips and tricks we can use to make our businesses more resilient. It’s worth taking a step back, though, and looking at what resilient businesses fundamentally do differently. It’s not just an issue of getting through the current or the next disruption intact; it turns out that the most resilient companies during the onset and throughout a crisis are likely to be top performers once the crisis is over. It’s not just about surviving the disruption; it’s not just about being a standout once things return to normal.
Tortoise + Hare
In the case of organizational resilience through a disruption, it seems like the most successful businesses merge the best qualities of both the Tortoise and the Hare in the well-known fable. Like the Tortoise, resilient companies are steadfast and focus on their plan and objective. They don’t get distracted from their goal of profitability, even in a disruption-filled world. In contrast, like the Hare, they need to be agile and willing to make significant changes quickly.
One of the things that seems to be true across the board for businesses during major disruptions is making cuts to increase profitability. The most resilient companies tend to make deep cuts and make them early. These kinds of cutbacks can look different at different organizations. For many, the cuts might be more about cost optimization than just flat cost savings.
Right now, there are some great examples of companies that are moving quickly to reduce operational expenses while building more flexibility into investment planning and operations. All the while, they have attained loyalty among high-value customers.
In the case of Unilever, the COVID-19 disruption boosted sales for some products, but the company keeps its focus on maximizing profitability during a crisis. The company made cuts, but not the ones you might expect. Unilever streamlined their production by significantly reducing the number of products it was manufacturing. By simplifying and focusing on the SKUs that are most in demand, it’s putting resources where they are needed the most.
It’s not just a strategy that businesses who have specific products that are highly in demand are using. Companies like Coca-Cola and Mondelez are also reducing SKUs to help streamline their supply chains and simplify production.
As for Coca-Cola axing Odwalla, it’s not just about walking away from a less popular product. That cut meant the company no longer had to keep and maintain its fleet of refrigerated trucks for that one product line. When only a single product in your line needs refrigeration during shipping, it’s easy to see how that one change can reduce the complexity of a supply chain.
But just because they’re sticking with a plan and taking deliberate action doesn’t mean these resilient businesses aren’t also moving with agility. Again, in the case of Unilever, they shortened their planning cycles from quarterly to weekly, and their planning meeting went from a weekly event to a daily one. Historical data and plans based on that data don’t necessarily apply to an entirely new normal. It’s never just business as usual during a major crisis.
L’Oréal was quick to drop its Clarisonic brand, too. It was a fast and surprising move, but considering how many copycat products there are on the market at this point, it was a quick move made with strategic thinking.
Any significant disruption will hit different organizations and even different divisions within the same organization in entirely different ways. Getting through a crisis will look different for every business, but resilience will not only help organizations get through the disruption but continue to succeed after the crisis has passed.