What is business success?

Success …

“Is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives, choice not chance, determines your destiny.” (Aristotle)

We are at a pivotal point in human history and we have the unique opportunity to choose what we want the future to be. We may choose to reflect deeply, but to re-imagine the way we lead our lives at work and at home, we need to have the courage to change. Fundamentally, we need to change the way we think, the way we see things, the way we act or behave. 

When we discussed sustainability pre-pandemic, the conversation tended to be about the environment. More recently, the focus has switched to the underlying pandemic that of human wellbeing. Why has it suddenly become more acceptable to say that you need help whether you are facing a particular challenge at work or at home? At least, there now appears to be increasing attention given to the theme of human sustainability.

The point I would like to make is that the so-called “social crisis” has been building for some considerable time. We have as humans outgrown the old way of organising work (mechanistic approach) a long time ago; but governments, institutions and businesses have failed to address this, whether for lack of incentive or fear of the unknown in breaking the familiar command-control cycle - the so-called status quo. 

Inertia, dithering, excuses, sitting on the fence, denial these are all familiar experiences for people in the work place. Some leaders falsely believe the workforce is not aware of their failings - they may fall prey to “over-confidence,” which can lead to disastrous consequences. 

Today, new generations entering the workforce and those yet to come, will not tolerate false values, lack of purpose, efficiency merely for the sake of metrics, and getting nowhere. They seek purpose, direction, true values (preferably those which resonate with their own cause) and action. They want to go somewhere. 

However, getting somewhere has always been the quest for mankind. So while this is not necessarily new, but there is a sense of urgency that there are forces at play, which will push governments, businesses and other economic actors to do something about it. 

In essence, while working on strategy with our clients, this is where we begin the exercise. Where do we want to go?  Direction is key here, not setting a finite destination, as this is limiting.  Particularly in the turbulent environment we are living, the ability to adapt to change quickly is critical for business success. So, you need to approach concentration of risk and the speed of change by thinking differently. 

This also means working on problems in a different way, taking a multidisciplinary approach, embracing cognitive diversity, welcoming different perspectives and experiences and then working through the particular issue by taking a different approach (that isn’t necessarily textbook). Most importantly, shifting focus from short-term measures to encompassing a long-term vision, examining different possible outcomes, thinking through the consequences of your decision or action over time, before settling on the path to take forward. This means you need to be clear about your purpose. 

Companies able to look ahead inevitably do better than those who are fixated on short-term gains. There are many examples, not least Amazon who shunned the analysts, did not react to the share price falling at certain points in its journey; but persevered instead by Jeff Bezos’s own admission with their mission nonetheless, always seeking innovation, progress, growth. I am not advocating for Amazon, but cite them to illustrate the point that long-term value creation can be a powerful purpose; and this fosters real innovation, seeking new market opportunities, which then translates into sustainable growth over the long term.

Nonetheless, growth must be actively pursued through continuous improvement and innovation. It doesn't just happen as if by magic! 

Embracing change as a force for good, we believe in an adaptive “systemic” approach to business transformation, (which includes technology but is not only about the digital aspect). It means exploring, experimenting, learning and developing continuously to ensure fast, appropriate and immediate responses to the changes in the environment and the needs of multiple stakeholders.

Timely responsiveness is the way forward and this builds resilience within the organisation. Since it must be managed proactively at a systemic level: determining an appropriate level of risk whilst allocating resources productively, adapting to the dynamics of change through agile methodologies rather than being fixated on set goals or incremental changes through the waterfall methodology. There is too much volatility in the market for this approach to prove successful at this stage.

We are in a state of flux, and this necessitates a flexible approach to the transition. 

More importantly, if you fail to contemplate the “unknown unknown” adapting continuously as change occurs, then you’re missing valuable opportunities at best, or else you’ll be ending up with less relevant products and services, which is also another way to look at failure. Short-term gains cannot be sustained over the long term and may end up costing the organisation dearly given the suddenness and the speed at which change is now occurring. 

That is not to say change cannot be managed gradually. It most certainly can, but it requires discipline, clarity and real leadership, across the organisation, not just top-down or bottom-up, as both will prove insufficient. Without everyone’s involvement, participation and understanding the enterprise will fail.  

A recent Mckinsey study shows, 70% of transformations fail, not due to the technology itself, but because real leadership across the organisation has been lacking in the execution and on-going transformation. And this is actually the most critical element for success. It begins with the CEO modelling desirable behaviours to inspire the whole organisation. Namely, curiosity and a willingness to learn, an openness to change in the way things are done, and then asking the right questions. Then as far as the CEO is concerned having the courage to course correct, as boldly as may be required in the context, often having to navigate choppier waters than may have been expected. 

Technology is a clearly an enabler but it is not itself sufficient. It will not provide the complete solution. Algorithms analyse facts from the past, which may swiftly inform us how we got here (depending on the accuracy and quality of the data, and the sources being used). However, the human-in-the-loop model for AI / ML models being deployed in companies today, do require a more integrated approach towards transforming an organisation into the modern enterprise, as part of a carefully constructed eco-system, with in-built viability for the future. 

This can only work if human beings are individually supported at a personal level (health, safety, wellbeing) and at a professional level simultaneously, so each person fully understands how to use the technology; and also embraces their own individual responsibility towards shaping their future. At a fundamental level we need to bring ethics to the fore, recognise our true purpose made up of human values, as the cornerstone of human flourishing and progress, both within the enterprise itself and society as a whole. 

Technology can free us from mundane, repetitive tasks, but at the same time we need to rise up, finally meet the challenge of elevating ourselves, working towards a higher purpose, for the greater good and for the whole of society. People, planet and profits are not mutually exclusive. So we should stop thinking that they are and instead forge a synergistic relationship to reach a new equilibrium both in the economy and society. 

It stands to reason that the best performing companies have adopted a growth mind-set and a blue ocean strategy, one of infinite possibilities and now lead the way forward. They are conscious they have a duty, responsibility for realising future prosperity and that they will be held to account by customers, investors and the future generations, should they fail to deliver on any of the economic and social development goals. 

3 February 2021

Santacaterina & Co - A leading strategic management consultancy helping companies transition to a new business model, explore new opportunities and create lasting value over the long term.