Entrepreneurial resilience

The Department of Trade and Industry (DTI) estimates that 8 percent of businesses, or 112,000 of the 1.4 million micro, small, and medium enterprises (MSME), remain closed due to the current, and easier, quarantine settings. This is already a large improvement from the 16 percent that closed when the enhanced community quarantine (ECQ) was enforced.

How much of MSMEs are permanently closing remains unclear. A study by the International Trade Centre late last year revealed that around 9 percent of Philippine companies were considering permanent closure and 68 percent said they were strongly affected by the lockdowns. The actual business closures are probably more now given the protracted impact of the pandemic.

There are a lot of businesses, however, that are successfully adapting to the current environment and are even thriving in these difficult times. We call this entrepreneurial resilience – “the ability to overcome high-impact entrepreneurial challenges and persist in the entrepreneurial process in the face of adverse situations and unexpected outcomes” as defined by Y. Awotoye and R. Singh, from Morgan State University, who studied this quality among entrepreneurs. It explains “why some entrepreneurs quit in the face of those challenges while others press on in the face of uncertainty and risk”.

While there are tons of writings and webinars that talk about entrepreneurial resilience amid the pandemic, they focus on the entrepreneur’s ability to bounce back, which others may find difficult to replicate without understanding the dynamic process of adaptation.

The De La Salle University, led by Professor Raymund Habaradas, together with research teams from the Imperial College Business School, Asia Development Bank, Mahidol University, and the Malaysia Global Innovation and Creativity Center, have embarked on a landmark research to study “the learning and opportunity-seeking activities that entrepreneurs undertake during and after the Covid-19 (coronavirus disease 2019) outbreak in five research sites: Wuhan, China; Bangkok, Thailand; Kuala Lumpur, Malaysia; Manila, Philippines, and London, UK”.

 

Named the EntREsilience Project, it aims to “address the urgent need to strengthen entrepreneurial resilience and discover the post-crisis ‘New Normal'”, according to the project website. “Through our research we seek to inform both policy and entrepreneurial practice in emerging and advanced economies alike,” the website states.

I am fortunate to be part of the sample of entrepreneurs in this longitudinal study to understand and derive insights on entrepreneurial resilience enablers, processes, and outcomes. I was interviewed by Prof. Habaradas and his team last December 2020 as part of Stage 1 of the project. Interview data were culled and five key emerging themes in resilient responses of entrepreneurs to Covid-19 were revealed in a project report.

 

First is experimentation. The study “found that the Covid-19 crisis has triggered an unprecedented wave of experimentation among entrepreneurial businesses, as they seek to adjust to the pandemic”. Furthermore, “many entrepreneurs explored new products and services, partnerships and business models”, in response to the crisis.

I shared with the researchers how I experimented with new approaches to adjust our consulting work with clients. I experimented with different tools to run virtual workshops, online surveys, and engagement platforms, until we settled for tools with the lowest learning curve for my clients.

Second is digitization. “Many of the experiments triggered by the Covid-19 [pandemic] harnessed digitalization for proactive adjustment to the crisis. Interactions with suppliers, customers, and partners were transferred online”, the report states.

Related to the experimentation theme, my company acquired and implemented digital tools to better engage with customers. Almost all the resilient entrepreneurs that I know have leveraged on digital technology.

Third and fourth are social orientation and community responses, respectively. “We observed that as Covid-19 presented an external threat that discriminately affected entire communities, entrepreneurs responded by taking on social missions and engaging in altruistic behaviors”, the report states. This also entailed becoming “more closely engaged with their regional entrepreneurial communities and accessing support from customers, networks and their inner circles”.

When the pandemic set in last year, my company offered free enablement webinars on business model innovation and digital transformation for micro, small, and medium enterprises. We also volunteered work in our community to help enhance access to products and services to assist other entrepreneurs.

Fifth is converting threat into an opportunity, also called dynamic resilience. “A very common response in our case companies was to actively seek ways to convert the Covid-19 threat into an opportunity – a response reflected in the other themes described above”, the report states. “Although the entrepreneurs were facing an acute and sudden crisis, they were able to recognize opportunities that arose as a result.”

 

Indeed, when I was faced with a sudden decline in revenue due to the wait-and-see attitude of clients, I actively looked for other business areas that we could develop instead of sulking. Since we are a digital transformation consulting firm, we leveraged on this strength and developed programs aligned to business model innovation consulting, which companies were looking for at during the onset of the pandemic.

I look forward to the third phase of this project, wherein researchers will “collect rich qualitative data about the sample firms’ business models and operational templates under the ‘new normal’, the retrospective exploration and reflections of ‘what worked’ and what appears to be the most effective response strategies and why”. Entrepreneurs and policy-makers can derive a lot of insights from these.

The author is chief executive officer of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com 

Source: https://www.manilatimes.net/2021/06/10/business/top-business/entrepreneurial-resilience/1802649