“It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.” – Charles Darwin
Turtles aren’t the sexiest creatures in the animal kingdom. They can’t run fast. They can’t fly. They don’t have big sharp teeth or claws. They can’t puff themselves up to look menacing. Compared to the raw power of a tiger or a falcon, turtles are kind of lame.
What turtles do have is a variety of protective strategies – swim away quickly, use camouflage, snap with jaws, and if all else fails, retract into the shell and wait. Creatures elsewhere in the animal kingdom are pretty much screwed if they’re cornered by a predator. Turtles have a fighting chance – they win because they’re the armored tanks of nature. They can also eat many different things and go into hibernation when times get tough. That’s why they tend to live so long.
Tigers, on the other hand, rely on their strength, power, and speed to chase down their prey. When times are good, tigers are the kings of the jungle. If prey becomes scarce or they lose their hunting prowess due to age or injury, death takes them quickly and mercilessly – no second chances.
What the business world needs is more turtles and fewer tigers.
How to Handle the Unexpected
The world is a fundamentally uncertain place. Unexpected things happen – some good, some bad. You never know when Mother Nature, Lady Luck, or a hungry predator will decide that today is not your day.
Resilience is a massively under-rated quality. Having the toughness and flexibility to handle anything life throws at you is a major asset that can save your skin – literally and metaphorically. Your ability to adjust your strategy and tactics as conditions change can be the difference between survival and disaster.
Resilience Has a Price
The thing about resilience is that it’s not “optimal” by nature – flexibility always comes at a price. A turtle’s shell is heavy – they could certainly move faster without it. Giving it up, however, leaves them vulnerable in the moments when moving a little faster just isn’t fast enough.
The primary reason many businesses (and many individuals) are in trouble in the current economic climate is a lack of resilience. In an effort to chase a few more short-term dollars, many businesses trade resilience for short-term power – and pay a hefty price.
A classic example is the big investment banks. Keeping cash reserves on hand to deal with the unexpected has become “ultra conservative” and “inefficient” – it’s become “best practice” to leverage the entire company 30-40 times to eek out a few more cents in earnings each quarter, leaving the business explosively vulnerable to a very small decline in revenues.
Imagine operating a business with no cash reserves, no insurance, and high levels of debt. The reduced expenses may juice your returns for a few months or quarters, but the moment your revenues decline even by a little or someone decides to sue the business, you’re sunk.
Unfortunately, many of the advanced financial manipulation tactics taught in business schools implicitly trade resilience for paper returns – and once-successful businesses pay the price by going out of business when times get tough. Leverage works just like rocket fuel – depending on how it’s used, it can propel your business to dizzying heights… or make the whole operation explode.
Planning for Resilience
Here’s what makes a business resilient:
- Low (or zero) outstanding debt.
- Low overhead / fixed costs / operating expenses.
- Substantial cash reserve for contingencies.
- Multiple independent products / industries / lines of business.
- Flexible workers / employees that can handle many responsibilities well.
- No single points of failure.
- Backup systems for all core processes.
Planning for resilience as well as performance is the hallmark of good management. It’s certainly not sexy, mostly because the benefits suffer from absence blindness. It can, however, save your hide when things get rough. Think less like a tiger and more like a turtle, and your business will be able to withstand pretty much anything.
How resilient is your business? Your personal life? What could you do to increase your flexibility and toughness in the face of the unexpected?
(Photo credit: zatrokz on sxc.hu)
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Your advice is good for an established business but for startups, the dynamic is a bit different. What I have seen is that lack of focus creates situations that make adjusting to shifting conditions hard. For startups, it’s best to Focus On The Product (http://blog.venturecooker.com/2009/04/09/focus-on-the-product/) and not get distracted.
Resilience comes in when they have to zig and zag around whatever issue it is while still focusing on what they are doing. Planning for that is an art and usually is not done because who wants to plan for problems.
The bullets are strikingly true on a personal level. Over the last few decades or decadence, we as individuals also adopted the bad apple traits of big business. Continuing with the animal theme, we must shed this skin like snakes do every so often and slither into a new mindset.
An aside on business schooling. What we buy into as prospective business people is the idea that an MBA equates business learning. Accreditation and some modicum of job placement convinces us to dole out tens and thousands of dollars to learn how to “do business”. Business school as an industry is slowly losing this right by teaching outdated principles.
On the other hand, there are some wonderful “niche” programs for design, marketing, health care and sales that are worth checking out. UPenn and Stanford started diversifying their product line 10 years ago and are on the cutting edge of this kind of vocational training. Select a school by its professors, the strength of its alumni community, and the direct value it provides you.
Thank you for the article, and the tiger and turtle analogy is good. However, how do you convince upper management or shareholders that you need to put some buffers for resilience? I think the problem goes deeper than recognizing the importance of resilience. We tend to have short term memory of mistakes we’ve made. When the economy bounces back and things are good, it will be a challenge to bring up resilience, an unpopular subject. While everyone is a tiger enjoying the meat, the turtle shell becomes a burden. The turtle is pressured to drop the unnecessary shell. Should the turtle give in and become a tiger? Or should it become a tiger but still carry a shell just in case?
Excellent advice. This is basic stuff but as always overlooked. Works for individuals too!
Great advice! Really like the turtle/tiger analogy.
It has become blatantly obvious that this is what individuals and businesses should have done a while ago. The question is, how do you recognize good advice when it doesn’t seem very good at the time?
Hindsight is always 20/20.
Great advise and it depends on the price of the resilience, how much is it and who can pay for?
Good solid advice, however in Japan, where turtles are plentiful, there are not too many days when I don’t see a squished turtle that was run over by a car. There is no turtle shell strong enough to protect against an automobile.
Turtles can hide and protect themselves in the short run, but overtime they need to be more aggressive. Global change is a giant elephant that is going to stampede over most of the poor turtles if they don’t do business drastically different. Resilience is important but sometimes you need to leap and attack like a tiger. The world is changing to fast to remain a turtle.
I agree. David Harper, founder, Bionic Turtle
Fast as the Wind, Silent as the Forest, Ferocious as the Fire, Unmoveable as the Mountain
- Sun Tzu’s “Furinkazan”
Managers, CEOs, ourselves. We all should strive to be those 4 things. At the same time.
The trick here is balance. To be those 4 things you must know yourself and know your surroundings, know those you compete with and know your goal, which is the customer.
Ying and Yang? of course! And here Josh, you close the post rather well. Too much tiger and you will fail. However, too much turtle and you will also fail. We not only build and work for subsistence, but for progress. An enduring progress should be our aim, then, and that can only be done by a leader that can bring together those 4 aspects the furinkazan speaks of.
Luck and success everyone.
Furinkasan is not Sun Tzu, its Takeda Shingen
Hi Josh,
You are dead right.
Our greatest glory is not in never falling, but in rising every time we fall. – Confucius
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