Endurance Over Departure: Why Optimising Alone Costs You the Future

When three quarters of companies rate their situation as unfavourable, optimisation is the natural response. Streamline processes, secure liquidity, endure. All rational. But there is a point at which rational optimisation stops being a crisis strategy – and starts being a future avoidance strategy. That point is being crossed in Swiss industry right now.

The Swissmechanic SME MEM Business Climate Index stands at around –30 points at the start of 2026 – the eleventh consecutive quarter in negative territory. Three out of four companies rate their current business situation as unfavourable. EBIT margins declined at nearly half of all firms. One in four cannot make planned investments due to financial constraints. The Raiffeisen SME PMI did reach its highest level since 2022 in February 2026 – but against almost three years of crisis, that is a recovery from a low point, not a departure towards something new.

Swissmechanic Director Erich Sannemann describes the companies' response with a formulation that is more precise than it appears at first glance: "Our SMEs respond pragmatically – they optimise processes, secure their liquidity and keep their workforce as stable as possible." The press release carries the title "Endurance over departure."

Endurance over departure. That is not merely a description of the status quo. It is a strategic decision – even if, in most executive committees, it is not recognised as one.

What exploitation and exploration have to do with your organisation

When pressure mounts, organisations narrow their focus – an evolutionarily effective mechanism, no doubt. In acute threat, it is critical to concentrate energy on what is immediate. Make processes more efficient. Cut costs. Do better what already works. In organisational theory, this mode is called exploitation: the use, refinement and optimisation of existing capabilities, processes and business models.

James March, whose 1991 work on exploration and exploitation established one of the most cited frameworks in organisational research, described the problem of this narrowing with remarkable clarity: organisations that exclusively exploit achieve reliably short-term returns – but they risk a competency trap. They become so proficient at optimising what exists that they lose the ability to respond to changed conditions.

The counterpart – exploration – encompasses search, variation, risk, experiment, discovery: investment in capabilities and business areas that do not yet deliver reliable returns, but that secure the organisation's ability to adapt to future conditions.

The research of O'Reilly and Tushman at Harvard and Stanford has empirically demonstrated over two decades that companies maintaining both modes simultaneously – organisational ambidexterity – achieve significantly better long-term survival and performance outcomes than those concentrating on a single mode. This is one of the most robust findings in strategy research.

And it is precisely this finding that becomes problematic in the current situation. Because under pressure, exploration is the first to go.

The ambidexterity dilemma under pressure

The difficulty is not that executives don't understand the value of future investment. Most understand it very well. The difficulty is that the operating system – budget cycles, quarterly reports, workforce planning, liquidity management – speaks a grammar that rewards exploitation and penalises exploration.

When margins erode and one in four companies must defer investments, no division head asks whether the pilot project would be valuable. The question is who will take responsibility for investing resources in something that won't generate returns for at least 18 months – while the current quarter looks red.

Under pressure, it is not the weakest initiative that gets cut. It is the one whose benefit lies furthest in the future. That is economically understandable – and strategically devastating.

The compound interest of innovation: what the research shows

There is a helpful analogy to make the problem tangible. Think of exploration like a savings plan.

If you set aside a modest amount every month, you notice no difference for years. The balance grows imperceptibly. But after ten or fifteen years, compound interest unfolds its effect – and the gap between someone who stayed the course and someone who paused during difficult years is dramatic. The decisive damage is not caused by a one-off reduction, but by suspending contributions entirely: someone who doesn't pay in for three years doesn't lose three years of interest. They lose the entire compound effect on those three years – and that is irrecoverable.

This is exactly how it works with innovation. And the empirical evidence confirms the analogy.

Bansi Nagji and Geoff Tuff published a study in the Harvard Business Review that identified a consistent pattern across industrial, technology and consumer goods companies: outperforming firms typically allocate their innovation resources according to a rule of thumb – roughly 70 per cent to core business improvements (incremental innovation), 20 per cent to adjacent business areas (adjacent innovation) and 10 per cent to transformational initiatives (new markets, new business models).

Now comes the compound interest effect: the return distribution is almost exactly inverse. The 70 per cent invested in core business improvements generates roughly 10 per cent of cumulative long-term innovation returns. The 10 per cent allocated to transformational initiatives generates roughly 70 per cent.

Those who cut the transformational 10 per cent during a crisis save 10 per cent in the short term – and lose 70 per cent of their innovation returns in the long term. That is the arithmetic that never appears in a quarterly presentation.

What happens when the 10 per cent falls to zero

The FCLTGlobal study "Funding Innovation" confirms this mechanism from a different angle: the productivity of R&D investment has been declining for years – not because the problems have become harder, but because the time horizon of innovation portfolios is systematically shrinking. Companies are increasingly investing in projects with one-to-three-year horizons and ever less in those with five-to-ten-year horizons. The short-term projects are "stickier" – they survive every budget cycle because they deliver results faster. The long-term ones are cut first whenever pressure rises.

What disappears is not a single project. What disappears is the organisation's ability to think and act long-term at all. Exploration is not an activity you switch on and off as needed. It is an organisational capability that must be built – and that decays when it is not practised.

Exploration that is stopped under pressure and restarted when conditions ease is not ambidexterity. It is sequential monodexterity – and it is strategically futile, because the learning cycles restart from zero every time.

Three patterns that make the shift invisible

The creeping erosion of exploration capacity disguises itself. Three patterns contribute:

First: innovation is confused with exploitation. Many organisations count process improvements, automation projects and software upgrades as "innovation." In Nagji and Tuff's classification, these are core business optimisations – valuable, but not exploration. An organisation that proudly points to its "innovation projects" may be at zero per cent transformational innovation if none of these projects explores a new business area, a new customer segment or a new value proposition.

Second: the bottleneck is mislocated. When the order pipeline is weak, it is tempting to locate the bottleneck in sales or demand. That may be correct. But in many cases, the actual bottleneck lies deeper: in an organisation that has invested too little – not just since the crisis, but for years – in the ability to evolve its business model. The crisis makes the bottleneck visible. It did not cause it.

In the Ambiflow diagnostic framework, this is a question of bottleneck clarity: does the leadership team know what is actually holding the organisation back – and does it allocate its scarce resources accordingly?

Third: the future is conceived as "after the crisis." "Once the order situation stabilises, we'll invest again." That sentence sounds reasonable. It overlooks the compound interest logic: someone who doesn't contribute to their savings plan for three years cannot simply top up the lost capital afterwards. The foregone returns are gone.

What ambidexterity under pressure concretely means

The answer is not that companies should invest equally in exploration during a crisis as in good times. That would be unrealistic. The answer follows the savings plan logic: even in a bad year on the stock market, you don't cancel the savings plan. You might reduce the rate. But you don't stop.

Translated into organisational practice, this means three things:

First: a protected minimum investment in exploration that is not up for discussion even under maximum operational pressure. Depending on the size of the organisation, this could be three people, half a day per week, or a small prototyping budget. The size matters less than the fact that it is protected. In Nagji and Tuff's terms: even if the 10 per cent drops to 3 per cent – it must not fall to zero.

Second: an honest diagnosis of the actual bottleneck. Not "we need more orders," but: what exactly prevents this organisation from adapting to changed conditions? Is it the order pipeline – or a business model that hasn't been developed for ten years? The Ambiflow model examines the ambidexterity balance as one of six dimensions – alongside bottleneck clarity, value flow, information flow, social resilience and leadership system maturity. The reason: measuring the balance alone, without understanding the causes of the shift, means optimising the symptom.

Third: a leadership system that actively manages the balance. Ambidexterity doesn't happen by itself. It must be managed – by a leadership team that consciously decides how scarce resources are divided between exploitation and exploration, and that regularly reviews this decision. Without this deliberate governance, exploitation always wins, because its benefits are immediately visible and exploration benefits arrive with a delay.

Five diagnostic questions for your leadership team

1. How has the distribution between exploitation and exploration shifted over the past 18 months – and was that a conscious decision?

If no one at the table can answer that question, governance is absent. The shift is not being managed – it is happening.

2. Which investment in the future has your leadership team deliberately protected over the past six months – even though it generates no short-term return?

The ability to protect something under pressure that delivers nothing today is the most precise indicator of a leadership team's strategic maturity.

3. If a new competitor entered your market tomorrow with a digital offering – how quickly could your organisation respond?

The answer is a proxy for adaptability. Organisations that have done nothing but optimise for months need months to pivot. Time that a competitor does not grant.

4. Where exactly does the line fall today, in your organisation, between "we're optimising wisely" and "we're avoiding the future"?

This question has no natural warning signals. The line is crossed without anyone noticing – because every single cut is individually justifiable.

5. Who on your leadership team represents the exploration perspective – and does that person carry the same authority as those responsible for daily operations?

In most organisations, there is a CFO, a COO and division heads whose success is measured by operational KPIs. There is rarely a counterweight that is equally accountable for future investment. Where that counterweight is missing, exploitation wins systemically – regardless of anyone's intentions.

What follows from this

Swiss industry is currently demonstrating remarkable operational resilience. Companies endure, adapt, optimise. That deserves respect – and anyone who knows the reality of –30 index points and eroding margins understands the daily leadership effort it requires.

At the same time, it is worth stepping back and asking an uncomfortable question: if endurance is the strength – where does it lead? Endurance with direction is strategic resilience. Endurance without direction is standstill.

The organisations that emerge stronger from this phase will not be those that optimised best. They will be those that continued their savings plan even in bad years – knowing that not every contribution yields immediate returns, but that the alternative – three years of suspension – is the costliest option of all.

Endurance is not a strategic goal. It is a bridging mode. The decisive question is not whether you can hold on. The decisive question is where you will go when the pressure eases – and whether you still have the capability to get there.

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If you want to assess where your organisation stands today between exploitation and exploration – and whether the bottleneck really lies where you assume it does: Ambiflow examines precisely this question, as one of six dimensions. And if one of the five questions struck a nerve, I would welcome a comment or a conversation – open, without agenda.