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What are the first steps I can take in making my business resilient? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Ranjay Gulati, Professor at Harvard Business School, on Quora:

About a decade ago, I wrote a book called Reorganize for Resilience. While conducting research for this book, I tracked companies, like Best Buy, Cisco Systems, and Starbucks, throughout the late 1990s and 2000s – through two recessions – to see how businesses fared during turbulent times. In other words, I was interested in finding out what made businesses resilient.

To make a long story short, I came to realize that the companies that survive recessions are the ones that put their customers at the center of their business. Customer-centricity has become a cliché nowadays, and yet, I’ve found that companies often lose sight of this seemingly obvious idea. Keeping these companies’ pitfalls in mind, I believe there are three steps that leaders can take to make their businesses resilient:

Becoming Customer-Centric vs. Product-Centric

As businesses become more successful, they generally become more product-centric, not customer-centric. They shift away from thinking about what the evolving needs and wants of customers and instead focus on how to continue optimizing their specific products. Take, Polaroid, for example. Although their film cameras have made a recent resurgence, Polaroid’s insistence on prioritizing paper film over growing consumer demand for digital photography throughout the 1990s led them to file for bankruptcy in 2001. Businesses should seek to keep their pulse on what customers value and design their offerings accordingly – not the other way around.


Focusing Outward Instead of Inward

Many businesses, instead of playing to win, start to play not to lose, especially during recessions. Leaders often turn inward, hoping that cost-cutting measures will help keep their organizations afloat – they play not to lose. These measures not only result in lower customer satisfaction and employee morale, but they can also stifle innovation that might have otherwise matured into sources of post-recession growth. Focusing outwards – on how one’s business can add value to the world – is how Starbucks thrived during the 2008 recession. In the midst of hundreds of store closures, CEO Howard Schultz launched My Starbucks Idea, a website where customers could offer, discuss, and vote on ideas. That site is the very reason why your local Starbucks has free internet, accepts mobile payments, and offers a free birthday treat to customers.

Purpose as a Short- and Long-Term Plan

Finally, I believe that purpose is the ultimate unlock. In times of crisis, it reminds you of why your business exists and forces you to think about why it should continue to exist. Organizing yourself and your employees around a central purpose – such that it comes top of mind during day-to-day operations – is what gets businesses through difficult times. Purpose is what creates a resilient mindset.

You can listen to me speak with leaders about how they instilled resilience in their organizations during turbulent times on my new Harvard Business School podcast Deep Purpose.

This question originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world.


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