A Good Crisis (not) Wasted: How Exploiting and Expanding Dynamic Capabilities Shape Corporate Performance During the Covid Pandemic

Jacques Bughin, Francis Hinterman and Sybille Berjoan

No WP2022-051, Working Papers TIMES² from ULB -- Universite Libre de Bruxelles

Abstract: Using the covid-19 pandemic in a time window of 18 months (from March 2020 to Sept 2021) as a case study of major turbulences, we estimate how dynamic capabilities have shaped corporate resilience and rebound performance, for large multi-billion revenue generating firms worldwide. Four findings stand out. First, dynamic capabilities are positively correlated with boost in profit performance post-covid pandemic peak, but their role and importance act asymmetrically between resilient and non-resilient firms (defined as ability to (not) recover profit pre-covid). Second, among the portfolio of dynamic capability domains studied (innovation, agility, digital technology, sustainability), innovation and agility are the most relevant ones to affect resilience and performance. Third, “doubling down” on dynamic capabilities during the crisis is also important, as the crisis allows firms to seize opportunities at the expense of weaker ones that may be stuck in a retrenchment posture. Third, the seizing/reconfiguring opportunity has larger payoff after lockdown, when market opportunities are no longer constrained. Those findings are general, as they are found for a large variety of 18 industries studied.

Keywords: resilience; performance; dynamic capabilities; innovation; agility; digital technology; sustainability (search for similar items in EconPapers)
Pages: 41 p.
Date: 2022-03
New Economics Papers: this item is included in nep-eff
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