Resilience is Not the Right New Goal

By March, my conversations often included discussion of how the pandemic has bolstered my longtime opinion that driving a business primarily by its numbers is unwise. Just-in-time supply chains and ultra-lean operations are brittle. They may produce more profit when everything is going well, but they are badly hurt when something goes wrong.

One of the biggest certainties in life is that things will go wrong.

Sure enough, this year it isn’t hard to find businesses that could have kept operating better if they weren’t so narrowly focused on maximizing profit in the good times. I took this as evidence that a strong business should be resilient.

Then mainstream media began to talk about resilience in business. Resilience has to do with being able to bounce back from adversity. I had been wrong to use that word. It doesn’t go as far as what we need.

Companies aren’t people (no matter what a court says), but they are made of people. As a result, a company develops a personality, character, beliefs and ways of doing things. Anything that makes a company’s character too narrow can make it too easily knocked down. Excessive emphasis on profits and squeezing as much as possible out of every resource leads to brittleness and workers who know they are regarded as disposable commodities (so loyalty would be foolish). Excessive focus on being able to bounce back from the next challenge causes constant focus on the bad rather than the good; it can lead to paranoia, defensiveness, closed-mindedness, or inability to recognize opportunities.

In a time of increasing hazard (terrorism, climate change, pandemics, economic and political upheaval), the best position to be in is one of general health, confidence and balance. It means seeking:

• enough profit instead of maximum profit

• enough efficiency rather than zero-fat leanness

• enough raw materials in stock to get through a moderate supply chain interruption

• enough suppliers (and customers) so that the loss of any of them would not cripple the business

• enough loyalty in the workforce so workers are willing to pitch in when stuff hits the fan

In other words, enough of everything, not too much or too little of anything… a Goldilocks scenario. That requires trade-offs.

If you’re in a sector that simply cannot operate in pandemic conditions, nothing can make up for that. But where operating in this pandemic is feasible, the businesses faring best aren’t simply lucky or even simply resilient. Look at the character of those businesses and the trade-offs they chose to be that way. I don’t know a single word for it, but perhaps that’s the new ideal.