Resilience in Capital Asset Management

Enterprise resilience is increased by improving asset utilization to achieve “leaner” operation, developing flexible resources, diversifying the portfolio of available technologies, and coordinating asset deployment across the enterprise. For example, Anheuser-Busch re-engineered its North American transportation and warehousing network to cope with increasing product complexity, achieving a reduction in transportation costs of 15% while cutting wholesaler out-of-stocks by 30%.

Resilience in Human Resource Management

Employee satisfaction and growth are key prerequisites for enterprise productivity and continuous learning. For example, a 1999 Watson Wyatt study of 405 public companies found that a well-managed workforce can add up to 30% to a company’s market value. (Note, however, that in some cases resilience drivers may actually conflict – for example, strengthening cultural cohesion may reduce the diversity of perspectives and business models.)

Resilience in Manufacturing

Strategic resilience is increased by encouraging innovation and establishing information connectivity. A recent GEMI study, Forging New Links, reported that Intel has saved millions of dollars annually by developing lighter-weight plastic trays that are used to move microprocessor units through the fabrication process and deliver them to customers, who can then return them to Intel in closed-loop fashion.

Resilience in Customer Relationship Management

Resilience means staying close to the customer via efficient support services and strategic alliances, sensing emerging changes in the market, and flexible tailoring of customer solutions. For example, since 1990, Ashland Chemical has operated a Total Chemical Management business for their electronics industry customers, enabling chip manufacturers to outsource full responsibility for chemical acquisition, storage, quality assurance, waste disposition and EHS compliance.

Resilience in Product Innovation

Strategic resilience is enhanced through an innovation process that emphasizes value creation for all stakeholders. For example, as part of its worldwide new product development process, 3M routinely considers opportunities and issues at each stage of the product life cycle – development and manufacturing, distribution and customer use, and disposal. This has led to breakthrough products such as Novec™ fire-fighting foam, which is superior to alternative chemicals in extinguishing efficiency and human safety, and also has extremely low global warming potential.

Resilience in Environmental Management

In environmental, health and safety (EHS) management, proactive efforts to develop new technologies for conserving resources and eliminating wastes can help to reduce costs, avoid regulatory burdens and develop trust among key constituencies. For example, in 2002 Baxter Healthcare’s annual environmental financial statement showed a savings of $65 million, about 3 times its annual expenditures. At the same time, implementation of enterprise-wide EHS management systems and effective crisis management helps to minimize the impact of disruptions and assure business continuity.

Resilience in Supply Chain Management

Nokia’s cell phone business demonstrated its resilience in 2000, when one of its key supplier facilities in New Mexico was destroyed by fire. Early recognition of the crisis and wise contingency measures enabled Nokia to secure alternative supplies and avoid any loss of market position. In contrast, Nokia’s competitor, Ericsson, was reliant on the same facility, but lost about $400 million in sales due to slowness in crisis recognition and response, and eventually exited the cell phone business.

Resilience in Chemical Process Technology

An Ohio-based company called Velocys is commercializing a new process technology, based on microchannel reactors, that promises to revolutionize the field of chemical manufacturing. An array of these miniature reactors can be scaled to suit the needs of a manufacturing site, and is 8 times more efficient than conventional reactors in terms of output per unit of reactor mass.

Resilience in Climate Policy

An example of strategic resilience is the voluntary commitment of many leading U.S. multi-national firms to reducing global warming emissions, despite the refusal of the U.S. government to ratify the Kyoto Protocol. These enterprises have recognized that, regardless of scientific uncertainties, climate change concerns cannot be ignored by major producers or consumers of energy. They are positioning themselves for competitive advantage in the face of anticipated changes such as carbon taxes and emission limits.

Resilience in Organizational Structure

Researchers at Washington University have shown that a dynamic enterprise fluctuating between different organizational structures (e.g., centralized vs. decentralized) can be more efficient than one that adheres to a constant model. Indeed, as conditions changed over the past 25 years, major companies such as HP and Ford have deliberately oscillated between a centralized and decentralized structure.

Resilience in Social Capital Development

Cemex, a global cement company based in Mexico, demonstrates the linkage between enterprise success and social resilience in its efforts to provide poor communities with access to affordable building materials. Cemex devised a program called Patrimonio Hoy (Patrimony Today) to make financial credit and technical assistance available to the economically disadvantaged – often referred to as the “bottom of the pyramid.” This program not only tapped a profitable new growth market for Cemex, but it also created new jobs and improved community quality of life both physically and psychologically – providing a sense of inclusion, cohesion, and pride.

Resilience in External Affairs Management

Resilience is increased by efficiently leveraging external resources and partnerships, exploring and preparing for external change scenarios, maintaining open dialogue with diverse stakeholder groups, and emphasizing social responsibility and corporate citizenship. For example, FedEx Express has enhanced its brand by building a reputation for environmental leadership, partnering with external groups such as Environmental Defense, and adopting sustainable technologies such as 100% recycled packaging and hybrid diesel-powered delivery vans.