Any one of us—and any one of our organizations—could be forgiven for behaving at the moment like a bear confronting winter. I don’t mean behaving “bearishly,” as investors do. No, I mean behaving literally like a bear—which is to say, shutting down the system. Hibernating. Certainly feels like the wise course just now. And haven’t we learned that nature is a sage guide to strategy?
Yes, but. First: History shows that the great winners in downturns are not those businesses that shrink production capacity, downsize the labor force and conserve cash until the economy picks up again. The winners are the ones that try to expand sales—the ones that grow. Second: Well, the bear isn’t the only creature in nature. Nature suggests many adaptive responses to a harsh or changing environment.Survival is first. But leaders must also ask themselves how they will gain advantage coming out of the downturn.
Not that the bear’s response to economic winter is all wrong. Hibernation can be an effective strategy, if certain assumptions hold. (Length of winter; adequate fat; return of normal world in spring.) Unfortunately, it’s already becoming clear that—this time—those assumptions are unlikely to hold up.
March 27, 2009 Sloan Managment Review, by Martin Reeves