Business strategies with a belief in long-term sustainability should support and encourage change.
Prices are rising, interest rates are climbing, inflation is worsening, and an energy crisis is brewing. With all this in view, many organizations are diving deep to cut costs, trim staff, and find the best path to sustainability.
However, are companies actually forging a strategic path to true sustainability? Or are we simply seeing short-sighted tactical actions focused on operational efficiencies that achieve mere survivability?
Finding operational efficiencies can extend the runway for an organization using its cash on hand to run the business. This is especially true for startups that rely on venture capital to get them by as they seek profitability. And, yes, efficiency for survivability can be an excellent near-term objective if this decision is made purposefully. Still, it shouldn’t come at the cost of having a long-term mindset unless the only goal is to cash out as soon as possible.
Organizations with a formal strategy that accounts for long-term sustainability are usually in a better position to eye several aspects of their business. They view everything from the business model to the business outcomes and everything in between to ensure they can survive the twists and turns of the future.
Organizations that can successfully embrace economic uncertainty, market volatility, technical insecurity, and risk complexity can find a superior competitive advantage. Those that can prepare for disruption can avoid disruption.
If this big bad problem is broken down into something manageable, sustainability could be achieved.
Most organizations are effectively technology companies building systems and applications for customers, partners, and employees. So, let’s take a closer look at sustainability from a software engineering perspective: building, running, and tuning.
Building: Evolvability and Portability
If the organization is held hostage by the technologies it has created, then its ability to innovate, create, and grow could be severely limited. There are countless scenarios of rebuilding, restructuring, and revamping that can introduce delays in delivery, issues with the customer experience, and, ultimately, loss of revenue and market share. As this process of continuous issue resolution marches on, the complexities of aging technologies can catch up with the organization, bringing engineering to a standstill until a complete refresh or rewrite is accomplished.
These are situations that can be managed and mitigated to build long-term sustainability. With sustainability at the forefront of the design and carried through to the implementation, engineering teams can innovate through a platform built and comprised of multiple components. Created by a team knowledgeable with the technologies and their capabilities, these components can evolve, be expanded, ported, and even removed as needed.
This allows the company to innovate and grow without having to re-invent every part of the business at every turn.
Running: Resiliency and Supportability
It’s not enough to build the company’s technological backbone to be nimble, flexible, and sustainable. The organization’s system and application management must also be future-focused.
Operational missteps can significantly impact the longevity of the business and its ability to remain competitive and lucrative. Again, we’re not just talking about squeezing out efficiency gains here. We must consider how business processes are defined, implemented, staffed, and automated. The approach here can be similar to how we modernize our engineering programs.
However, we can’t just apply this mindset to the operations of the applications and systems. We also need to apply it to what will most likely matter most in the future: the operations of data.
To be sustainable, organizations must be prepared to expand their business to utilize data differently. Or, perhaps more likely, be ready to be forced to stop using data a certain way, given the regulatory and policy outlooks in different regions.
The future of business will continue to expand to include elements created internally and externally. Transparency across the systems, applications, and data will allow the company to control its destiny. To this end, organizations should refrain from being held captive by any third-party vendor to maintain supply chain resilience.
Tuning: Feasibility and Consequentiality
Finally, observability is critical. Organizations need to employ monitoring, sensing, and analytics. In some cases, investments in predictive modeling using artificial intelligence may even be something to consider if the return for sustainability can be justified. Organizations that perform continuous measurement and improvement using outcome-oriented insights should be in a much better position to thrive long-term.
Yes, technology can play a significant role in business operations, but it won’t eliminate the need for human involvement. With this in mind, we still need to pay close attention to burnout. A team unable to survive overly demanding operations could cause more disruption than any market change ever could.
- Invest wisely for current and future growth
- Look for creative ways to enable the company to turn on a dime if necessary
- Consider taking bold actions now that can lay the foundation for future success
- Try to avoid having to re-write history to succeed later
Just like we create systems to be fault tolerant, we need to develop the business strategy to be disruption tolerant. Start crafting a business strategy with long-term sustainability in mind. Establish a process that supports, encourages, and embraces change.
There are consequences for our actions. Finding the most feasible path to the best outcomes now and in the future will set the elite apart from the common in business.
- BCG, If Disruption Is the New Normal, Operational Resilience Is the New Necessity, November 2022