Which time horizon can be classified to manage the property of being sustainable?
What kind of credibility have to be achieved to be capable of being sustained?
How to gain both the stability and changeability in the same time?
In the financial crisis period, we have realized lot of companies independent of size proves unsustainable. Some companies were so big that corresponding government saved these companies by bailout to save the balance of economy. But many small companies simply died. This may be the extreme condition but in general it looks like those companies didn’t think about the basic concept of sustainability of a business.
In general, we can define the sustainability of a business as a process to fulfill the target to meet the needs of the present without compromising the ability of the business to meet the need of the future. Business sustainability is also termed as actions of a non-ending journey but not a destination. Sustainability of a business resembles the human sustainability which can be characterized by the success in a period and followed by a crisis that needs to be resolved, or not leading to decline to produce the sustainability.
Pillars of Business Sustainability:
Each business runs in an environment. The environment tends to change continuously. Generally the company has very less control on external environment but has control on internal environment. It can manage internal resources based on its capability to response on the change of external environment for the sustainability. To meet the needs of the present, it is important to balance the production and consumption of the business. And to meet the future needs, it requires setting out future goals and has to create ‘structure of performance’ depending on the trend of future environment of a business.
Based on time horizon, the actions for the management of business sustainability can be classified into present or near future oriented (short term) and future oriented (long term) actions that is regarded as visionary actions. Depending on the business model the duration of short and long term can be varied. To maintain the efficiency of present or near future actions, business needs stability. (e.g. stabilize process, stabilize business model, etc.) But for the external environmental changes that has already happened and for the visionary actions, it is important to manage the internal resources to yield the target which is defined as changeability. Two pillars of business sustainability are stability and changeability which are mutually exclusive. The ability of change as the response of spontaneous market is seen as competitive advantage. But for the efficient execution of current actions business needs stability which is the demand of internal environment. Each business has to develop the interwoven model of
stability and changeability which creates a balance between the demands of internal and external environment. The model is defined as 'equilibrium efficiency margin' model in a permanently changing environment.
Planning for the present stability and future changeability.
Interwoven management approach of stability and changeability.
Business Sustainability Management Approach:
For the stabilized internal environment, it is important to focus internally on building unique core capabilities and offerings the product that suits their way to play. This ensures the capability-driven stability for the business which reflects the value that is offered to the selected customers' that meet their needs and also meets the business’ capabilities. An interwoven management approach for the stability and changeability is represented in the figure of the image section. The management approaches to gain the stabilization for the present success can be :
Process-ability model: In this model, personal are expected to follow the well proven standard procedures without any deviation. For this, company has to standardize the management process in all level. This can be used in highly regulated industries and process oriented production system. It is applicable in the system where deviation from the formal procedures can be extremely costly.
Flexibility Model: In the innovative technological industries, it is not possible to standardize the management approach and production processes in every level. In these industries, personal should embrace flexibility within in a definite range of space. But it is important to set a clear direction of flexibility and empower the subordinates to execute the processes accordingly. In this approach, flexibility defines the standardization in board range. Greater flexibility is required for the modular systems for which subordinates have significant power to determine appropriate actions, always in accordance with the overall plan.
In reality internal stability for any process, unit or whole business can be achieved in situation-wise approach in which both process-driven and flexibility model are used depending on the system requirement. In most cases, it requires trade of between process-driven and flexibility model.
Generally business operates in the continuously changing environments. Changeability is the process to tune the business capabilities with the change that is already happened or is expected in future. The management approaches to achieve the changeability to develop the internal capability for the future are:
Adaptability Model: It is the evolved process of an organization that adopts some inaccessible component of the environment. It is tended to be problem-driven due to internal reason or external environmental changes that already happened and oriented towards guiding decision-making process. In this model, the internal process or approach needs to be adjusted due to unavoidable internal and external environmental changes. It guides towards stability that is required to yield big return for the organization.
Vision-ability Model: From the history we can see business environment is changing over many scale of time and space. And it will change in future. To equip the efficiency to react on these visionary changes, it is important to entrain the full custom change management actions based on the expected impact of future environmental changes. To measure the impact it is important to see the bigger picture and modify the internal resources that suit according to the future needs.
So sustainability is the interwoven relationship between stability and Change. Business needs stability as the demand of internal environment. But changeability is required for the sake of future stability in uncertain environment. Company performance depends on the interwoven approach of stability versus changeability and so the sustainability of a company.
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4. 'Building Your Company's Vision', HBR Articles | James C. Collins, Jerry I. Porras
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