HBR's 10 Must Reads for Executives 8-Volume Collection

The Quest for Resilience

by Gary Hamel and Liisa Välikangas

CALL IT THE resilience gap. The world is becoming turbulent faster than organizations are becoming resilient. The evidence is all around us. Big companies are failing more frequently. Of the 20 largest U.S. bankruptcies in the past two decades, 10 occurred in the last two years. Corporate earnings are more erratic. Over the past four decades, year-to-year volatility in the earnings growth rate of S&P 500 companies has increased by nearly 50%—despite vigorous efforts to “manage” earnings. Performance slumps are proliferating. In each of the years from 1973 to 1977, an average of 37 Fortune 500 companies were entering or in the midst of a 50%, five-year decline in net income; from 1993 ...