Topic: Business Strategy, Change Management
Publication: Harvard Business Review (DEC 2012)
Article: Two Routes to Resilience
Authors: Clark Gilbert, Matthew Eyring and Richard N. Foster
Reviewed By: Susan Rosengarten
Strategists at every organization worry about keeping their companies’ products and services relevant for the twenty first century. With new electronics brought to market before you can say the word “i-phone,” its no wonder companies are finding it harder to compete and maintain market share, yet alone dominate their industries. What’s the secret to not just staying afloat, but flourishing in this economy? Well, Gilbert, Eyring and Foster have the answer for you in their article “Two Routes to Resilience.”
You’ve got to take a dual-transformation approach and come at your competitors from both sides. Give them the “one-two punch,” if you will. “Transformation A” should focus on your presently existing core business, and strategies that allow you to adjust your current business model to accommodate shifting markets, technological advancements and an ever-changing business environment. “Transformation B” on the other hand should create a separate business that feeds and thrives off of “disruptions” in your environment. The trick to creating synergy and a competitive advantage for both businesses is a “capabilities exchange” through which the parallel businesses share resources without infringing upon the mission or operations of either company.
Take the chain bookstore Barnes & Noble for example, which saw a dramatic drop in sales with the rising popularity of the virtual mega-bookstore Amazon. Barnes & Noble responded by redesigning their business model and concentrating less on lower-margin high-selling books and more on higher margin children’s books and gifts. Stores were no longer merely places that sold books, but they now sold an experience; they became a place where parents could spend time with their children and customers could peruse through gifts for their loved ones (Transformation A). Barnes & Noble also became relevant for the 21st century with its release of the ‘Nook,’ which had an advantage over Amazon’s ‘Kindle’ because consumers could touch it in their hands and try it out before buying it (Transformation B). These transformations benefited from a number of shared resources including common branding and publishing relationships.
Now’s your chance! Take the next step in transforming your business and competing with the best of what’s out there. Best of luck! Knock ‘em dead!
human resource management, organizational industrial psychology, organizational management