Finance Transformation Forum

Why strategic resilience is crucial to survival 

Even before the current crisis, digital disruption has emerged as a key challenge for many businesses. But some industries have proved more resilient to wide-scale change than others. On the one hand, sectors such as retail banking the incumbents continue as normal; in others, such as photography, the traditional players are wiped out. 

In general, the degree of creative destruction among traditional, longstanding corporations has been lower than might be expected. Of the current (2019) Fortune 500 companies, only 16 were established after 1994. Furthermore, contrary to popular belief, disruption happens slowly; disciplines such as digital imaging, have taken decades to develop. Another myth is that established firms struggle to adapt. Many larger companies are getting smarter, creating their own digital offerings, merging with competitors, or building flexible partnerships. 

Changes in strategy-making in a world of radical uncertainty 

Rather than developing and executing a detailed strategic plan, strategy-making is now about coping with the “fog of the future” – having the agility and flexibility to cope with changing circumstances. Good strategy-making involves a combination of the following disciplines:

  1. Scenario planning – this involves awareness building; keeping a close eye on emerging industry and economic developments, and preparing for a wide range of potential eventualities.
  2. Real options – companies must be able to pivot when needed; this means remaining diversified, and ready to move quickly into new markets – and say goodbye to old ones – if the situation demands it. 
  3. Active waiting – sometimes the smart move in a crisis is to simply wait and do nothing; companies should prepare for the unknown by building their financial strength, controlling expenditure, and being ready to act fast when the time is right.