The Essential Elements of Resilience
Resilient companies are crafted by Resilience Builders. We know their names because they are the legends of prosperity; Thomas Watson at IBM, Kiichiro Toyoda at Toyota, Sam Walton at Wal-Mart, Steven Jobs at Apple, and more.
What is it about Resilience Builders that enables them to create firms that prosper and endure? Did Microsoft become the dominant software company in the world because of Bill Gates’ talent as a programmer? Not likely, because Digital Equipment, Altair, Commodore, Wang, and Compaq all had intelligent programmers and those firms are gone.
Was it Meg Whitman’s brilliant intellect and Harvard MBA that allowed her to grow the first virtual community and ensure e-Bay’s survival after the dot com crash? No. Although some Harvard MBA alums have generated great prosperity, others have generated great failures. Some have even gone to jail. Having a great education does not guarantee that the leader will become a Resilience Builder.
Proctor and Gamble CEO, A.G. Lafley is credited with restoring worldwide growth during his tenure from 2000 to 2009. Could it have been the facts that he rose through the ranks at P&G, and once headed its Asian operations? No. His predecessor, Durk Jaeger rose through the ranks and headed the Asian operations too, but disrupted the company and resigned after only 18 months as CEO. A leader’s career path does not make him a Resilience Builder.
Was it the smart strategy of building a discount airline in the face of the stodgy legacy airlines that made Southwest Airline’s CEO Herb Kelleher a Resilience Builder? After all, he had the ability to lower his competitors’ prices when he pulled into an airport for the first time and to repeat this over and over again for many years. Again, no. There have been many discount airline start-ups, and nearly all are gone. Simply choosing and executing the right strategy does not make a leader a Resilience Builder.
So, what do these people know, and what do they do that makes them Resilience Builders?
Our heroes can be demystified and their methods understood. Building resilience is not the product of magic, chance, or mystery. The events in our world are organized in a logical, understandable manner which gives order to our observations of resilience and explains how some achieve it and others do not. They achieve resilience not because of who they are, nor of some God-given talent, but because of what they do, and how well they do it. They all have achieved resilience by having the wisdom to understand, manage, or maneuver four variables and to know how these variables interplay with each other. These variables are what this book calls the essential elements of resilience. They are: competitive platform, developmental frame, culture, and strategy.
Competitive Platforms
Resilient companies have a clear identity; a strong and well-defined personality. We encounter this when we get a long workout on our insurance company’s voice menu, then hold for the next available agent. We experience it when a bridal shop spends more time interviewing a young woman than selling to her. We see it when our cell phone obsoletes almost overnight. And we know it when our soft drink is supposed to make us young again. Most successful insurance companies operate on an Efficient Platform. The best bridal shops are built on a Relationship Platform. Technology companies build their fortunes on the Creative Platform. And soft drink manufacturers are established on the Marketing Platform. Within each industry, those companies which have achieved resilience have done so by carefully choosing their own competitive platform, communicating it clearly to their employees, suppliers, and customers, and living according to the doctrine of this competitive platform. For them, this is more than just a business model. It is a religion.
There are four competitive platforms: Efficient Platform, Relationship Platform, Creative Platform, and Marketing Platform. There is also a fifth possibility, a Hybrid Platform, which is a combination of two or more competitive platforms. As various industries have progressively become more complex, successful Hybrid Platforms are now seen more often. Effective execution of a Hybrid Platform can powerfully enhance resilience.
This book proposes that there is a distinct set of skills and competencies associated with each of these platforms, and resilient companies specialize in a specific competitive platform. Once a Resilience Builder selects a platform and dials this platform up to extreme heights, the very nature of the organization becomes clear. Each platform has its own set of defining characteristics, relationship with money, motive, and method of growth. Each also has a unique relationship with its suppliers, employees, and customers. Each has a unique set of marketing skills. This means that it is quite different to lead, manage, sell to, or work for an Efficient Platform company than it is to do so for a Relationship Platform, Creative Platform, or Marketing Platform company. In resilient companies, everybody knows upon which competitive platform the company is built.