McKinsey Quarterly 2023 Number 1

on delegation of authority and escalation mechanisms in the event of disruptions. Leaders ensure that risks are assessed at all stages of the value chain, and they instill resilience throughout business operations.

From adaptation to growth A company’s own resilience assessment will help identify areas of strong resilience, which typically will serve as the catalyst for a growth initiative. Resilience has to be measured so that progress can be tracked to ensure return on resilience investments. For example, companies may act from a position of strong financial resilience with strong balance sheet and liquidity positions to create room for inorganic growth moves, particularly when target valuations are low in their industry. Or in sustainability, they may leverage an above peer ESG position to double down on new growth opportunities. This could involve deeper transition to greener asset and product portfolios, which protect them against customer attrition as standards continue to tighten. The result for such a company will be still greater differentiation—and better position to gain market share and seek price premiums. In another situation, a strong, resilient digital backbone can help elevate companies’ ambitions to adopt an aggressive digital agenda to raise their operating model and ways of working to new, more competitive levels. The resilient company, beyond operating under “business as usual” scenarios, shows its mettle in crises and disruptions, using foresight to shift gears fast, swerve from danger, and then accelerate into new opportunity through adaptation. The enabling mechanisms are its agile organization design and decision-making structure—with clearly defined roles and responsibilities. Everyone should know what to do when storms come. Whether this moment leads to a turn in the business cycle or to a continuation of recent inflationary trends, it is a time when companies can make the kind of pivot through their resilience that strengthens their growth trajectory for the next several years. European business leaders face a deeply unsettled economy, with potentially existential risks for those companies that enter the crisis with weaknesses in their balance sheets and business models. We’ve found that most senior executives are highly capable of playing defense in volatile and uncertain environments. Protection is a must, but opportunities for growth are also emerging. The exceptional leader finds the path to the next frontier of resilience, answering essential questions of where to shore up defenses and where to place bets on the future. The resilience framework we’ve outlined can help leaders see and understand gaps and identify growth opportunities even in the heaviest of seas.

Hemant Ahlawat is a senior partner in McKinsey’s Zurich office, where Andreas Raggl is a senior adviser; Homayoun Hatami is a senior partner in the Paris office; María del Mar Martínez is a senior partner in the Madrid office; Alfonso Natale is a partner in the Milan office; and Thomas Poppensieker is a senior partner in the Munich office.

The authors wish to thank Christian Amberg and Amandine Bastiaens for their contributions to this article.

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A defining moment: How Europe’s CEOs can build resilience to grow in today’s economic maelstrom

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