Choosing Resilience Over Resistance

“If you want something new, you have to stop doing something old.”
– Peter Drucker

In my last column, I likened the past 24 months to new parenthood. School teachers, business leaders, and, well, moms and dads all have had to radically change their day-to-day lives. Like parents adjusting to a newborn’s sleep schedule, we have had to adapt. Quickly.

There are two options when faced with a situation that requires a new way of thinking or doing: resistance or resilience.

Unfortunately, in the working world, most people choose the former.

Resisting Change Is Not Futile

According to McKinsey, 70 percent of corporate change programs fail. Much of that is due to resistance from within. Doing things the old way comes with certainty. You know what you are going to get, and that is comforting.

But resistance is not futile. In fact, it has serious consequences, and it is a luxury we cannot afford. Companies, for example, rise and fall at much faster rates than they did a generation or two ago. According to Innosight’s biennial corporate longevity study, the average lifespan for an S&P 500 company in 1975 was around 35 years. It’s expected to be closer to 17 this year. In 2020, 18 companies were added or dropped from the S&P list. The industrial metals sector certainly has not been immune to these trends.

Peter Drucker said an established company that is not able to innovate, “is doomed to decline and extinction.”

Stanford University psychologist Carol Dweck has found most organizations, like most individuals, exhibit either a fixed or growth mindset. A growth mindset is the belief that a person or organization is not limited by current traits or abilities. Learning is always possible. A fixed mindset thinks we have no power to change our circumstances because abilities are fixed.

Companies that have embraced a growth mindset have flourished over the last two years.

A Growth Mindset In Action

Elon Musk’s insistence that Tesla build capacity within the company — and control all of the technology that goes into its vehicles — has helped it stay profitable despite the global chip shortage. But it was controversial.

“In recent decades, the conventional auto wisdom had it that manufacturers should concentrate on design and final assembly and farm out the rest to suppliers,” wrote New York Times reporter Jack Ewing. “That strategy helped reduce how much money big players tied up in factories, but left them vulnerable to supply chain turmoil.”

Instead, Tesla built software, batteries, and electric engines in-house. While supply chain challenges still have impacted the company (no one is totally immune), the company beat earnings forecasts again in the fourth quarter of 2021.

Kristin Smith, chief operating officer of the rental furniture company Fernish, explained that, as a capital constrained startup, before the pandemic it had been relying on “just in time” inventory. Seeing how that strategy would be impacted as the global pandemic took hold, Smith and her team took “immediate action” to change.

“We added alternative products, provided partners with more long-range forecasts, shifted our sourcing plans … and built new ways for customers to interact with us,” Smith told Forbes contributor Edward Segal. Fernish also began designing its own line of upholstered furniture, which gave it “even more control and transparency in our supply chain.”

Like Tesla, it is beating expectations. The company just added five executive-level employees, and made a big play for new business during the Super Bowl. The company is thriving because its leaders chose resilience over resistance.

Industrial Metals Needs A Growth Mindset

Supply chain and pandemic-related health and safety issues are not the only pressures facing our community. The broader manufacturing industry is older and less diverse than most sectors, and we have more work to do when it comes to greening our operations.

We will have no choice but to face these challenges, and MSCI is committed to helping this community through programs like our Diversity, Equity, and Inclusion initiative, discussed here, and free thought leadership webinars like the one we recently hosted with Bank of America ESG Program Manager Kimberley Paris on “Understanding the Role of Environment, Social, and Governance in the Metals Value Chain.”

More generally, we have chosen resilience over resistance, moving from a conference-centric organization to one that provides meaningful intelligence and content to its members every day, both virtually and in person.

How do we get teams to embrace a growth mindset over a fixed one?

A few years ago, well before the pandemic, our executive education partner Thayer Leadership offered a summer reading list that included Mindset: The New Psychology of Success by the Stanford psychologist Carol Dweck who I mentioned above. Leaders who want to cultivate a growth mindset will:

• Focus on what was learned in the face of failure instead of the failure itself;
• Ask for input from their teams and celebrate accomplishments;
• Recognize and reward effort;
• Invest in developing their team through training, reskilling, and upskilling; and
• Continually set new goals and evaluate current ones.

Change does not come naturally to many people, but we can cultivate a mindset that makes us more open to it. And, in today’s world, we must.