The Path of Least Resistance

Water, when it is faced with an obstacle, does not try to force a way through it. Rather, the flow will continue around the obstacle and the stream will continue merrily on its way. This is called the path of least resistance. An interesting thing happens however when the obstacle is left in place. Over time, the water will start chirping away at the obstacle and eventually will indeed find a way through the obstruction in its path. This is called the power of time. Corporations are faced with an array of obstacles, both known and unknown but mostly of the latter kind. While a well functioning strategy department that incorporates scenario planning can help to predict disruptive events (obstacles) and hence mitigate their effects, even the best corporate strategy teams cannot predict each and every obstacle that corporations face while trying to attain their goals. How a corporation reacts to unanticipated challenges is thus key. A well thought out response can make the difference between profitability and the bankruptcy court. While this seems to be a fairly common sense approach, it is astonishing how many company decisions including critical game changing edicts like hiring and firing of key players are made as knee jerk reactions to some fickle public caprice. While GE's stock has, together with the rest of the market, taken a beating from the effects of the current economic morass, it is fair to assume that none but the most pessimistic analysts can bet against a future GE turn around. One of the key characteristics of GE, that differentiates it from almost any other public company of its size is how patient the shareholders are with the CEO. Thus the GE CEO position is one of the safest in its class. Harking back to the water analogy, longevity of strategy seems an assured path to profitability. As long as a company has a sound strategy that is being implemented, then you should over time see positive results. The problem is that too often corporations allow the obstacles that will inevitably crop up to create a deviation from strategy or from implementation of the same. This is not to suggest that corporate strategies should be set in stone. To do so is to mistake the strategy for the goal. Rather the point is that the road maps that are strategies ought not to be abandoned just because a rock fell on the road. Instead while the corporation works to clear the road, it should remember that the goal is still down the path and just like water does, find a short term way around the obstruction while sticking with its long term objective for when the rock is cleared and it can continue towards its goal.


The CEO