In the Aftermath of COVID-19 Use Your Business Network To Make Your Business More Resilient And Responsive
When the Tsunami flooded the eastern coastal stretch of Japan in March 2011, the ensuing nuclear disaster combined with the devastation caused by the tsunami to disrupt businesses around the world.
Japanese economy sits right in the middle of the global business network and it was natural for businesses as diverse as auto manufacturing, electronics, chemicals, petroleum products, computers, metals to experience the disruptive shock.
For example, the price of the Toyota Prius went up by nearly $2,400 due to rumors of shortages. While it is natural for a variety of businesses to experience the disruption, it was remarkable to note that those businesses which had the most responsive and resilient business networks were the ones to recover from this catastrophe the quickest.
Read the book The 5-STAR Business Network, sections 2 and 3, to see how to recognize the quality of business networks and make them more resilient and responsive at the same time.
Another stark example of the power of business networks is that of the fire than tipped the balance within an industry. Two stalwarts in the mobile phone industry in March 2000 were equally impacted by the same event - a lightening fire in the chip manufacturing plant of their common supplier, Philips, in New Mexico.
Both Nokia and Ericsson experienced the business disruption to an equal extent as a result. Fire damage to the stocks was extensive. More importantly, the manufacturing capacity was damaged and it was difficult to estimate the time for repairs.
Nokia had invested months, if not years, in creating and perfecting a robust and responsive business network, while Ericsson's business network was relatively a middle-of-the-line affair that worked well when things were good.
After the fire, Nokia was able to see the full impact of the chip shortage on its own business, as well as the entire industry with a lot more clarity than Ericsson, and even Philips. Moving quickly, it activated other parts of its business network to shore up supplies, to redesign some of the chips to manufacture them in other plants, and to take pre-emptive steps in the network.
Ericsson let the situation evolve at its own pace and made decisions more reactively. The resulting gain in profitability and market share for Nokia, and the loss of these for Ericsson tipped the balance of the industry to an extent where within a few years Nokia pulled far ahead of the Ericsson which never caught up with its erstwhile equal rival.