Sustained and Sustainable Performance – The Intelligent Business Delivers

?Chief Executives are increasingly pressed to balance the triple bottom line of People, Planet and Profit.? The increasing demands for Sustainable business are pressing hard on many Chief Executives and their Boards of Directors.? When times are tough, and markets are difficult, for many, it could seem like an onerous and challenging overhead also to meet the needs of Net Zero, the so-called ‘Circular Economy’ and markets are difficult, for many, it could seem like an onerous and challenging overhead to meet the needs of Net Zero, the so-called ‘Circular Economy’, and other ESG-related commitments.?

?Our premise, is that if you are an Intelligent business squaring this circle is not so much a problem as an opportunity.

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Background

?For the UK, US and Europe the majority (up to 90%) of the economy is made up of Services business and Public/Health Care organisations.? For those organisations, typically, their biggest costs after people followed by Information Technology related services.? Those IT costs are rising again with the rapid adoption of Data and AI related services which are created increased demands for technology infrastructure.?

?At first glance, that increased demand for computing power which is going to create significant increased consumption of electricity, and water, and the output of large volumes of carbon.

These services are already generating increased demands for technology infrastructure, demands on power and water and output a larger carbon footprint than civil aviation.?

?Pausing for thought, if a conscious strategy is developed, we believe that not only is a business that aims to be sustainable and ‘Circular’ the right thing to do, but it is also actually the best thing to do.? You can square the circle between sustainability and sustained revenue and profits, or in others are the dimensions of People, Plant and Profit compatible or mutually exclusive?? If your business aims to be powered by AI and drive by data, we postulate that the objectives are in fact mutually supportive. We define such a business as The Intelligent Business?

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The Intelligent Business is an organisation that utilises predictive and adaptive insight to dynamically reconfigure itself, in response to the expected needs of its customers, and simultaneously anticipate and respond to changes and events in the external environment.

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How the Intelligent Business Delivers

Logically speaking if we look at those increased demands for compute power, if we don’t just use the biggest most resource hungry Generative AI Large Language Models (and the massively resource hungry GPU Compute that powers them) but are more agile you can deliver more value at lower cost, but also lower sustainability impact.?

?Our proposal therefore is that those organisations that are experts at using Data and Analytics to drive their business performance, can use the same capabilities to drive their sustainable performance – and other words be truly Regenerative. ?Furthermore, this hypothesis backed by empirical academic research.? Research conducted by in Europe in 2021 by leading academics, Kristofferson, Mikalef et al, (who surveyed 125 top company managers from across Europe) demonstrated that firms with a strong business analytics capability have an increased resource orchestration capability and a greater ability to excel in the circular economy, resulting in improved organizational performance in building a more sustainable competitive advantage in an increasingly competitive business landscape.

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Those of you who have followed the Intelligent Business Blog (https://www.dhirubhai.net/newsletters/the-intelligent-business-6924726039600373760 ), will have read about Resource Based Theory (RBT).? RBT has been widely applied as a?managerial framework to determine vital resources for a firm to achieve a?sustained competitive advantage.? ??It seeks to identify resources that are Valuable, Rare, Inimitable (difficult to copy) and organisationally embedded. ?Research orchestration theory (ROT) is an expansion of resource-based theory. It considers managers' roles in the selection and configuration of resources, and it aims to explain the process of achieving a competitive advantage and exploiting the dynamic capabilities of resource configuration.

?What Kristofferson and Mikalef went on to say is that the effect of business analytics capability on firm performance is not direct but fully mediated through resource orchestration capability and circular economy implementation.

?What that means in practice is those organisations whose leaders fully utilise Data and analytics to drive their critical business decisions can deliver sustainable/net zero organisation, whilst continuing to deliver improved organisation/business performance.? People, Planet and Profit can all be supported by the Intelligent Business.

?Thanks to my collaborator Lisa Rabone!? https://www.dhirubhai.net/in/lisarabone/

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Summary definitions

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• Business Analytics Capability-? is the ability of a firm to effectively mobilize, deploy, and utilize BA resources and align BA planning with its strategy to improve its performance.
• Resource Orchestration Capability (ROC) is the ability of a firm to effectively structure, bundle, and leverage the resource portfolio towards firm performance.
• Circular Economy Implementation is the degree to which a firm effectively leverages circular strategies for value creation and capture as relevant to its perspective.
• Firm performance is the degree to which a firm has superior performance relative to its competition in areas of environmental performance, financial performance, competitiveness, and corporate performance.

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