#26: Resilience

Being able to roll with the punches.

I’m an author, organizational sociologist, strategy professor, unsuccessful furniture maker, and Xoogler—this is yet another attempt to make sense of the state of not-knowing.


On Sunday, I discovered my copy of Sylvain Tesson’s Consolations of the Forest trapped between the radiator and the wall. This book about real isolation in the boreal forest has something to say about artificial isolation in the city:

“Setting up residence in a one-room Siberian hut is a victory in the battle against being buried alive by objects. Life in the woods melts the fat away. Unburdened, the airship of life sails higher … An object that has been with us through the ups and downs of life takes on substance and a special aura; the years give it a protective patina. To learn to love each one of our poor patrimony of objects, we have to spend a long time with them. Soon the loving looks directed at the knife, the teapot and the lamp come to embrace their materials and elements: the wood of the spoon, the candle’s wax, the flame itself. As the nature of objects reveals itself, I seem to pierce the mysteries of their essence. I love you, bottle; I love you, little jackknife, and you wooden pencil, and you, my cup, and you, teapot steaming away like a ship in distress.”

(At every meal I use the same nearly perfect spoon that was given to me nearly twenty years ago.)


For the first few lockdown weeks, I did daily laps around Weaver’s Field, a bland but adequate parklet just east of where I live in Bethnal Green. Every passing day it became more filled with people dutifully doing yoga on the grass or jumping rope with expressions of profound despair. Last week, to escape these doleful crowds, I started heading west into London’s non-residential core.

Passing first Shoreditch High Street, then Liverpool Street, the traffic thins out and the people on the sidewalks gradually vanish. The City of London is deserted. It’s been possible to run in the middle of the road for blocks at a time without having to get out of the way of a single car. And the air is clean.

(Bliss.)

On these slow loops, I pass hundreds of retail and hospitality businesses. Nearly every one is currently closed. When they finally are allowed to reopen, there is great uncertainty around the conditions they will have to comply with. What’s pretty clear is that strict physical distancing will be enforced for months. And customers will be progressively less willing (or able) to spend as the months wear on.

As I pointed out last week (#25), only the exceptional pre-coronavirus business model can accommodate this kind of distancing, let alone economic weakness.


Though Covid-19’s ramifications are still unfolding, the pandemic has already highlighted three things that make a business resilient to uncertainty.

  1. The flexibility to change business model quickly,

  2. Loyal customers who trust the business even when it switches to a new offering,

  3. A deep understanding of what customers need and want.

Rapid-response flexibility. Coronavirus has already forced businesses to change how they work. The businesses that are adapting most effectively are inherently flexible: Small ones where the owners still do much or all the work, and which are driven by clearly defined (often highly idiosyncratic) ideas of quality. Small size naturally means less inertia. Owner-operators understand their businesses inside-out and are both the managers and the managed—they’re able to quickly make and execute strategic decisions. And having clearly understood values makes it easier to swiftly identify and eliminate costly non-essentials, leaving a leaner operation that can pivot more quickly and effectively.

Loyal and trusting customers. Changing offerings can alienate customers seeking familiarity, further distressing an already-troubled business. The businesses that have escaped this fate have customers who are loyal not to specific products or services but to the businesses themselves. Businesses are more likely to have customers who are loyal in this way when they focus on an idiosyncratic idea of quality, insist on doing things the hard way, and target only customers who pursue that idea of quality. An idiosyncratic idea of quality combined with careful customer targeting ensures that customer priorities are well-aligned with the business’s priorities. And doing things the hard way gives customers a reason to trust the business.     

Deep understanding of customers’ changing needs and wants. As the pandemic’s impact continues to spread to more parts of the economy, businesses will fail and unemployment will rise even more—disposable incomes will decline. The products and services customers need and want to buy will inevitably change in unpredictable ways as the months progress. Businesses will need to be able to continually adjust their offerings to accommodate these changes in customer demand. Owner-operated businesses in close and constant contact with loyal and trusting customers are best positioned to do this. Strong connections with customers let owner-operators see changing demand more quickly and accurately—and they have the influence over their businesses needed to act quickly on these consumer insights.


I have a weakness for small, owner-operated businesses that pursue a particular idea of quality.

To be clear, not all small businesses choose to be small or quality-focused. On the contrary, nearly all small businesses are trying to become big but aren’t competent enough to do so—they’re just not very good businesses to start with.

This may be why business schools (and nearly all businesses) seem to have forgotten about the value of pursuing quality for its own sake by staying small. It seems impossible that it can be viable to do so because pursuing profit and growth has become deeply ingrained in the culture of doing business. There is deep suspicion about how businesses that pursue quality over profit can live long, let alone prosper.

Yet, quality-focused customers can almost always find quality-focused businesses—if they care to look. These businesses are the exception not the rule. They often choose to stay small so they can continue to offer quality, and are rewarded with modest but robust economics built on loyal and trusting customers.

Until now, modern business thinking and media has treated these kinds of small, quality-focused businesses mostly as makers of cool stuff—it hasn’t valorised them as good businesses to run. What gets talked up instead is the unicorn startup and the Fortune 500 company.

But the reality is that small, quality-focused businesses don’t just make cool stuff. They also have an enormous competitive advantage in a time of uncertainty and continual change. They are flexible enough to keep changing their offerings to adapt as the business environment changes, they are more likely to have good ideas about what offerings to change to, and their customers trust them enough to buy these new offerings.

If this upheaval were to both tilt the balance in their favor and make it clear that they’re good businesses to start, own, and operate … well. That would be quite nice.


Border crossing.

The sound of the future.

Steam rising.

Bread.


If he’s still hungry, the whole country’s doomed.


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If you found this useful or thought-provoking, you should share it indiscriminately with masses of people. You can find previous issues of The Uncertainty Mindset here. I’m on the web at www.vaughntan.org, on Twitter @vaughn_tan, Instagram @vaughn.tan, or by email at <uncertaintymindset@vaughntan.org>.