One of the brilliant things about this blog is the people one ‘meets’ because of it. I continue to be grateful to those who respond to posts with ideas or articles, and I am pleased when I find articles that I think will help others in their own work. The article I’m posting about here is one of the few that I think might become seminal, so I’ve already emailed it to a couple of the very helpful people that I think may appreciate it as much as I do.
You see, I’ve come to find many articles about resilience are simply like the other articles on resilience. For the lit review section on ‘how organisational resilence might be achieved‘ I even made a point of choosing four specific texts as my ‘touchstones’ because they were so different in their approaches and answers (Sheffi (2005), Valikangas (2010), Collins (2009) and Beer (2009), since you ask). But I think – annoyingly, but importantly – I need to rewrite that whole section because of what I’ve learned from Carmeli & Markman (2011). This one is very different, and I like it a lot.
In Capture, Governance, and Resilience: Strategy Implications from the History of Rome, they use the lessons from Rome to consider how and why it was so enduring. They then examined 150 companies that have lasted for longer than 200 years.
Surprisingly unsurprisingly (if you see what I mean), it turns out that small, family-owned businesses tend to last longest, quite possibly because they only expand when there are utter synergies and the ability to govern the new entity that’s being introduced to the mix. The large, listed companies rarely last anywhere near as long.
But “Rome” got huge, right? And lasted for centuries? So how does that work if the smaller companies endure better? Well, according to these guys, “it appears, also, that corporate resilience is neither about crisis management not turnaround programmes but, rather, about an ongoing bundling and redeployment of capture and governance strategies; it is not reactive but proactive organisational conditioning.”
As well as the abstract – which, if you click it, will take you to Wiley to read the article if you have a login – I’ve included some of my selected quotes/notes below, in case they’re of interest.
Anyway, I found it to be a really good read. I hope you find it useful.
- “Capture strategy relates to market expansions, while governance strategy refers to the capacity of an organization to assimilate, retain, defend, and increase its dominance within annexed markets. The history of Rome also reveals four supporting tactics—saving power, maintaining a stronghold base, isolating and weakening adversaries, and creating forward outposts—that shore up and reinforce the capture and governance strategies, to create a more enduring and resilient enterprise. Interestingly, a system-wide view of the strategy-tactic framework also offers insights on resilience through smallness, thus illustrating its conceptual utility to organizations of all sizes including small enterprises”
- Firms that expand rapidly, particularly if they go heavy on mergers and acquisitions, and if they ignore “issues such as product integration, culture harmonization, cross organisational synergies” and business ethics – “will eventually face severe setbacks”.
- Why? Well the larger companies “soon saw how the benefits from economies of scale and scope were eclipsed by complexity, including interdivisional rivalries and business units competing against each other… expansipon does make sense, but only when firms capture segments they can manage and dominate through effective governance.”
- “Even the best capture strategy wull not ensure organisational resilience unless it is coupled with an explicit governance strategy. In fact, a counterintuitive lesson is that governance is strategy… all else being equal, when governance is merely operational instead of strategic, a company might have the growth capabilities, but…”
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Posted on August 16, 2011
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