Linked With Resilience Are 4 Challenges (cognitive, strategic, political and ideological)

i) cognitive challenge (an organisation must move away from denial, nostalgia and arrogance. It must understand and be aware of the changing trends and the impact these trends will have on the organisation)

ii) strategic challenge (the ability to create a range of new viable options as alternatives to the current strategies)

iii) political challenge (be able to divert resources from current to future programs/projects/ services/products, etc. Need to invest in "what should be" rather than "what is". Most organisations

"...devote too much marketing energy to existing customer segments while ignoring new ones; they pour too much development dollars into incremental product enhancements while under-funding breakthrough projects; they lavish resources on existing distribution channels while starving go-to-market strategies......the root cause is always the same: current strategies have powerful constituencies; embryonic strategies do not......A persistent failure to distinguish between new ideas and risky ideas reinforces a company's tendency to over-invest in the past...... a detailed study of diversified companies by business professors Hyun-Han Shin and Rene Stulz found...... a business unit's investment budget was largely a function of its own cash flow and, secondarily, the cash flow of the firm as a whole...... if the forces of preservation really trounce the forces of experimentation, it will soon find itself over-investing in moribund strategies and outdated programs. Allocation rigidities are the enemy of resilience..."

Gary Hamel et al, 2003

iv) ideological challenge (optimisation of current business model is not enough; need a creed that extends beyond operational excellence and flawless execution). Irrespective of the techniques or tools used, optimisation has the goal of

"...Do more, better, faster and cheaper..."

Gary Hamel et al, 2003

Optimisation is sufficient as long as there is no fundamental change in what the customer wants. Organisations need to care more about resilience than optimisation. This is more than operational resilience (ability to respond to the ups and downs of the business cycle or to quickly rebalance product/service mix). It is more about strategic resilience.


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