Why too much tech hurts resilience

In a crisis, the best-equipped company is not always the most technologically loaded one

Featured faculty: Li Jingyu
Written by Joanne Madrid

The pandemic was a poignant reminder of the importance of information technology, or IT. Almost overnight, businesses scrambled to go digital, with video calls replacing boardroom meetings and cloud platforms keeping teams connected.

The rush to adopt technology has not slowed since. According to McKinsey & Company’s 2025 report, 88 per cent of firms across 105 countries are now using artificial intelligence in at least one area of their business, a spike from 20 per cent in 2017.

For China, technology is the core of its economic powerhouse. Private companies contribute 70 per cent of the country’s technological innovation, and Chinese tech firms, whether in semiconductors, artificial intelligence, or robotics, have been rushing to go global.

Companies now have a wealth of options to choose tech tools, but does piling on more technology automatically make a company better prepared for the next crisis? Not necessarily, according to a study co-written by Li Jingyu, an Assistant Professor of the Department of Management at the Chinese University of Hong Kong (CUHK) Business School.

“Having too much variety of IT tools can actually make it more costly and difficult for companies to come up with new plans, decide on the best ones, and then put them into action,” says Professor Li. “This problem gets much, much worse during unexpected shocks, where companies have to make decisions and act quickly.”

The paper, titled Navigating the storm: Towards a theory of IT portfolio diversity, leadership power, and organisational resilience to major shocks, found that companies with a moderate range of digital tools were generally more resilient during crises than those with either very few or many digital tools.

The safe zone of digital tools

Along with Li Mengxiang of Hong Kong Baptist University, Hsieh Po-An at Georgia State University, Wang Xincheng at Tongji University, and Gu Bin at Boston University, Professor Li examined 2,926 listed Chinese firms, tracking their revenues before, during and after the pandemic. Firms that are better at absorbing a shock would see smaller drops in income, or even manage to grow.

At the heart of the study is the concept of IT portfolio diversity, which refers to the variety of digital tools a company can deploy. This includes everything from cloud computing and video-conferencing systems to mobile applications and enterprise management software.

The analyses find that companies with a moderate level of IT portfolio diversity have genuine advantages. They have sufficient technologies to allow them to shift operations online, coordinate staff remotely, and keep information flowing when normal routines are upended.

“Having too much variety of IT tools can actually make it more costly and difficult for companies to come up with new plans, decide on the best ones, and then put them into action.”

Professor Li Jingyu

Yet the benefits did not keep rising in a straight line. Firms that had accumulated a very wide array of technologies often struggled during the crisis. A sprawling and fragmented technology setup can be expensive to maintain and difficult to coordinate.

These problems become acute when speed and clarity are most needed, such as during a crisis. In normal times, firms felt less pressure to reorganise their systems. After the crisis, many had already adapted to new ways of working. “When IT portfolio diversity is too low or too high, it can lead to inferior performance related to organisational resilience,” Professor Li adds.

Think of it as a chef’s kitchen. A good range of knives, pans and appliances makes cooking faster and more versatile. But cram every kitchenware imaginable onto the worktop and the cook room becomes cluttered and confusing, especially when hundreds of unexpected guests arrive.

Giving technology leaders a seat at the table

Having the right tools is only half the equation, because the man behind the gun pulls the trigger. Who is in charge of those tools and how much authority they hold matters significantly.

Companies where senior technology executives sat on the board or held top-level positions were far better at turning a diverse set of digital tools into a real edge. These leaders could coordinate resources across departments, resolve conflicts between teams, and ensure that technology decisions supported the company’s broader strategy under intense pressure.

“Firms that intend to build digitally enabled organisational resilience to withstand unforeseeable shocks should pay special attention to enhancing the power of their IT leaders,” Professor Li says.

Without a high level of authority, even well-stocked technology tools can go to waste. If the head of technology lacks the standing to redirect resources or overrule competing departmental priorities during a crisis, the firm’s digital tools may sit underused or, worse, pull in different directions.

It is worth mentioning that what constitutes too much varies from company to company. Companies with very strong IT leaders might be able to manage a much wider array of digital tools effectively before getting overwhelmed.

Industry context changes the calculus

Not all industries experienced the crises in the same way. Transport and hospitality were devastated during the pandemic, but pharmaceuticals and express delivery boomed. These contrasting fortunes shaped how much the technology-leadership combination mattered.

In hard-hit sectors, the payoff from owning diverse digital tools with strong tech leaders was amplified. Affected firms benefit more from well-coordinated digital responses, but if their digital systems are disjoint, more severe consequences ensue. In this case, technology becomes a high-stakes game.

For businesses that thrive during crises, their digital portfolios and powerful tech leaders aren’t critical to survival since they already meet what the market needs.

In short, digital expansion alone does not make a company crisis-proof. Organisations need to think carefully about how many different technologies they can realistically manage, and ensure that the people responsible for those technologies have decision-making authority.

“Our findings underscore the need for firms to deliberately cultivate organisational resilience, enabling them to strategically align IT portfolio diversity and the authority of tech leaders in responding to different environments,” says Professor Li.

While the study covers only Chinese listed companies, she believes the core insight is likely to resonate well beyond borders. In a crisis, the winners are not necessarily the companies with the most technology, but those with the right amount and the leadership to make it count.