How to Thrive in Turbulent Markets
The Rumble in the Jungle offers an interesting business analogy from boxing for seizing opportunities during a downturn: True champions have the capacity for both agility and absorption.
Dr Donald Sull of the London Business School offers an interesting insight. In the dressing room before the fight, defending champion, George Foreman, bowed his head in prayer. He was about to defend his title against the more exalted Muhammad Ali. The fighters were to split a $10 million purse, the largest to date. And what did Foreman and his corner men pray for? Not victory - that they took for granted. Rather, they prayed that the champion would not seriously injure his opponent. Ali entered the ring as a three-to-one underdog despite his ability to 'float like a butterfly and sting like a bee.'
The uncertainty in boxing is legendary. Although fighters and trainers study the tapes of past fights they cannot predict the pattern of the flight, nor the affect of the emotional highs and lows that will take place.
Uncertainty is also the defining characteristic of business competition today. Competing in volatile markets can feel a lot like entering the ring against a Foreman or Ali, or even like stumbling into a brawl. The barrage comes from all directions, with body blows and shots to the head, seemingly coming from different people, some even using unconventional weapons.
Many consider the recent global credit crunch and resulting economic downturn a one-off blow - like that uppercut they never saw coming. I don't think so. Let's list merely a few of the significant events that have taken place including Enron, the dot-com era, September 11, the Gulf Wars, the rise of emerging markets and even the more recent Washington-induced crisis of the debt ceiling.
As they fight their way through a new crisis, business leaders can learn much from the Rumble. The two opponents personified two vastly different styles. Ali was fleet-footed and took advantage of any small opening. Foreman did not have Ali's agility but his physical strength and toughness allowed him to absorb an enormous amount of punishment, while biding his time to release his own powerful blows.
Companies can decide to employ the Ali-like agility to spot and exploit changes in the market. Alternatively they can rely on their powers of absorption to withstand market shifts. A special few have the ability to combine both approaches into a mode of agile absorption where they have the ability to regularly identify and take opportunities while retaining their structural integrity to weather the storms of change. It is those companies which can develop and use both the capabilities simultaneously that will not only survive but thrive and emerge from the unstable times as market leaders.
This organizational agility becomes a characteristic of companies which capture business opportunities more quickly than others do and often takes three distinct forms - operational, portfolio and strategic agility.
Muhammad Ali's prime endured because of his unique agility. For so long he was able to spot the momentary weakness and pounce on an opponent, often delivering the crucial blows to end a flight. It is this nimbleness that executives believe can lead to higher revenues, better customer satisfaction and an increased market share by recognizing opportunities earlier than others and having the ability to react appropriately.
Does your agility allow you to thrive in our turbulent times?