The legendary Intel CEO Andy Grove once said:

It is a powerful line, but it leaves out the more interesting question: how are great companies improved by crisis? The great companies defined by crisis rarely approach it defensively. They do not merely buy insurance, hope for the best, or pray for the storm to pass. Instead, they find a way to play offence.

This is what I would call Crisis Alpha. The idea is borrowed from investment management where trend-following strategies are often associated with crisis alpha because they can perform well during periods of stress. They do not predict the crisis but rather exploit a recurring behavioural pattern: when markets break from consensus, many investors capitulate near the bottom, cut risk at the worst possible time, and then become too fearful to put risk back on. Trend-following strategies follow the new direction, cut losing positions, and stay exposed to persistent moves. On the other hand, playing defence using insurance-buying strategy leads to long term ruins.

To a degree, the business version of crisis alpha has a similar nature. The struggle and the opportunity both come from the gap between fast-moving market reality and slow-moving organisational belief.

The companies with crisis alpha do not merely survive the crisis. They use it to build the next power that fundamentally rewrites their playbook. Sometimes it can even mean the hardest move of all: counter-positioning against their own legacy model before the market does it for them.

Unlike many sources of alpha that get arbitraged away over time, crisis alpha appears unusually persistent across markets, organisations, and industries. This is not because crisis itself is rare or mysterious but because its source sits in our structural tendency to underreact to regime change. We resist new facts because accepting them would force us to abandon the story in which our previous belief system still makes sense.

However, not accepting the new reality does not stop the new reality from forming. Those who resist it will eventually have to accept the new reality at a far greater loss or disappear altogether.

This is the uncomfortable persistence behind crisis alpha, where a trend is rarely just movement, but rather the visible reflection of the old power slowly bleeding because it no longer fits the new reality. In markets, this shows up as price momentum. In business, it shows up as a cluster of symptoms all pointing to the erosion of power. Crisis alpha belongs to those who can see the trend for what it is, cut the old position, and move before the rest are emotionally ready to admit that the world has already changed.

Incumbents are rarely weak before challengers become a real threat. In fact, incumbents are powerful precisely because they are almost perfectly shaped to the previous reality. Under the same rules, new entrants can only be absorbed, ignored, or crushed.

For this reason, real disruption rarely comes from someone doing the same thing incrementally better. It comes from the emergence of a new power that leverages a different force, sometimes 10x or even 100x stronger than the old one.

Counter-positioning is one of the clearest examples. What is great for the challenger is often poisonous to the incumbent. Netflix did not beat Blockbuster by building a better rental store. It changed the basis of competition. AWS did not pull ahead simply because Amazon understood enterprise technology better than Google. It emerged because Amazon’s own operating model forced it to build deep infrastructure capability, and cloud had a very different strategic meaning to a low-margin retailer than to a high-margin advertising business. Electric vehicle companies did not merely build cars with a different engine. They shifted the game toward batteries, software, charging networks, direct customer relationships, and data loops, rendering large parts of the petrol-car playbook irrelevant.

In each case, the incumbent could see the challenger so the problem was rarely visibility. The problem was that responding properly required attacking parts of the old model that still looked successful. That is why challengers are dangerous and often unstoppable, and the incumbents can feel strangely powerless.

Should the incumbents simply follow the playbook of the challengers? The answer is a firm no.

The incumbent does not have the same leverage, the same cost structure or the same freedom, so copying the challenger can be a fast way to shoot itself to death. But doing nothing is only a slower death.

Jeff Bezos once said:

Interestingly, the best incumbents return to timeless principles, especially customer focus, but express them through their own unique power. This is different from defending the past or copying the future. It actually means creating a new playbook from the assets that only the incumbent can compound.

Microsoft is one of the clearest example. For years, its centre of gravity was Windows. But the world moved from desktop operating systems to cloud, enterprise workflows, collaboration, developer ecosystems, and AI. Microsoft did not rebuild itself by pretending to be a cloud-native startup but instead rebuilt power around what was uniquely its own: enterprise trust, distribution, developer relationships, identity, security and Office suite. Teams did not beat Slack because it was more loved as a standalone product but because of its enterprise distribution advantage.

Nintendo did something similar from a completely different angle. It was beaten badly by Sony and Microsoft in the hardware-power race. But Nintendo did not try to win a losing game on graphics, chips, or console horsepower. It rebuilt around what was uniquely Nintendo: IP, family gameplay, and tight hardware-software integration. The Switch was not the most powerful console. That was the point. Nintendo changed the basis of competition from hardware performance to experience design. It proved that old Power can still be extraordinary if it is rebuilt around the right customer truth.

Oracle is another subtle example. For years, Oracle looked like a legacy enterprise-software incumbent: sticky, profitable, but less fashionable than the cloud-native challengers. But AI changed the scarce resource. Suddenly, the world needed massive compute, enterprise trust, database gravity, regulated workload credibility, and the ability to finance and operate huge infrastructure commitments. Oracle did not need to become AWS; it just needed to turn its old enterprise power into AI-era infrastructure power.

This is the incumbent’s crisis-alpha move: not imitation to the challenger, not nostalgia to an era that has passed, but the aggressive repositioning of its unique leverage into new advantage. Challengers may express their vision of the future using new powers unique to them, but the incumbent can cast its own vision by rebuilding power in a form the new reality can still rewards.