5 ways to build corporate resiliency

Resiliency is one of the defining characteristics of every great company, be it Jim Bean, Colgate, Macy’s, or Mitsubishi. However, building a resilient company – one that’s capable of enduring for decades – is far from easy.

According to Investopedia,

“In 2019, the failure rate of startups was around 90%. Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.”

In this article, I’ll explain five ways that founders can cultivate corporate resiliency and, as a result, bounce back from difficult situations and achieve sustained growth.

1. Embrace sustainable practices

The market has spoken – sustainability is the key to corporate resiliency.


“Both the number of sustainability-focused index funds, and their assets, have doubled over the past three years, according to a report from Morningstar released Wednesday. The financial research firm said that as of the end of the second quarter 2020, there were 534 index funds focused on sustainability, overseeing a combined $250 billion.”

Even the onset of Covid-19 couldn’t dampen demand for sustainable companies.

CNBC further reported,

“Global sustainable funds saw inflows of $45.7 billion [in Q1 2020], while the broader fund universe had an outflow of $384.7 billion. . .”

The “shareholder value at all costs” model is losing traction; now is the time for startups to embrace sustainable practices (e.g. energy efficiency, environmental policies, diversity hiring, proactive scalability planning). It’s important to note that you must ensure your sustainable practices are measurable. Without being able to measure your impact, stakeholders won’t be able to quantify it.

What’s more, startups should be focused on sustainable revenue growth by measuring year-over-year growth, not quarter-over-quarter. Short-term revenue growth targets often lead to missed opportunities over the long-term.

2. Develop contingency plans

It always surprises me how so few startups plan for the future when they’re the ones that are most susceptible to external shocks. Make sure you don’t just have a Plan B, but a Plan C, D, and E as well. Risk management is important at every stage of a company’s lifecycle, whether you’re an SME or a multinational.

Think of it much like the Federal Reserve’s stress test policies preceding the Great Recession. In order to determine how much money banks would be required to have in their reserves so they could absorb economic shocks or Black Swan events, the Federal Reserve and its army of economists simulated a mild economic contraction, a moderate one, and even a depression. The potential ramifications of each event were calculated in order to determine safeguards that would prevent financial institutions from collapsing. If the Fed can do it for the entire U.S. economy, you can do the same for your business.

A major product update failure, the loss of a core team member or partner, supply chain disruptions, and trade wars are just a few of the most common risks startups should plan for.

3. Build a reputation over a bank account

As the Latin writer Publilius Syrus put it: “a good reputation is more valuable than money.”

When considering potential clients and deals, think about how working with them will affect your reputation. Will the relationship create the perception of value? Will the end product be high-quality? Will it increase your market exposure?

These are all important things to keep in mind when choosing who to work with and what projects to take on. Sometimes, it can be worth it to take on a project that isn’t very profitable as long as it has significant long-term reputational benefits.

4. Co-brand with complimentary brands

Co-branding is one of the most powerful ways to reach new audiences, and a wide audience is key to a firm’s resiliency. Consider the co-branding campaigns of GoPro and RedBull (their Stratos video on YouTube has over 23 million views) or Casper and high-end furniture company West Elm. Both of these campaigns helped the companies enhance their respective profiles.

However, co-branding doesn’t have to be a six-figure joint venture. It can be as simple as a partnership with a charitable organization related to your field. By partnering with nonprofits or charities, not only do you increase your exposure, but you make a social impact as well. Win-win-win.

5. Measure beyond financials

Financials only tell one side of the story. In addition to monitoring common financial metrics like profit margin and conversion rates, be sure to also measure non-financial metrics like employee productivity rate and competitive intelligence (e.g., your competitor’s online reputation and talent pool).

While this is certainly more work, it will provide you with a more complete picture of how your business is performing. What’s more, it will allow you to spot underlying strengths and weaknesses that could influence your company’s resiliency. It’s also valuable data you can use when putting together your pitch deck.

The Resilient Entrepreneur Begins with the End in Mind

When it comes to resiliency, it’s all about beginning with the end in mind. Each of the aforementioned points – whether it’s developing sustainable practices or building a reputation – are about planting seeds that will one day flourish.

Aaron Hoddinott

Investor and marketer willing to take big swings at bold ideas.

Aaron Hoddinott

Investor and marketer willing to take big swings at bold ideas.