You can use any number of adjectives to describe today’s economy. It’s global. It’s digital. It’s sharing. Companies that have stood the test of time are being disrupted at an unprecedented rate, not just by emerging competitors in their industries, but by companies creating competitive industries that never existed before. In order to stay relevant, profitable, or alive, companies need to be adaptable, not just persistent.
“If change was as easy as a directive, then the companies that made 1999’s Fortune 500 list would not need to say goodbye to 238 of their peers a mere 10 years later, a change of almost 50% from the 1999 Fortune 500 to the 2009 Fortune 500,” says Toby Elwin.
Businesses cannot just adapt on a dime, it needs to be embedded in their DNA. As a recent BCG Perspectives report states, there are three core factors that businesses need for sustainable success: innovation, restructuring and growth.
“To any CEO, these are deeply familiar strategies. But they are hard to implement on a continuing basis. To be successful, you need to think about them jointly. They reinforce each other, creating a virtuous circle. In the beginning, there is innovation, a new idea of what to do and how to do it. The new idea requires you to restructure your portfolio, your organization, and your team. The process of restructuring creates an additional dynamic, leading to growth. Growth gives you more scope, scale, and attraction—and the opportunity to invest more, which in turn can lead to new ideas and innovation.”
Even if these core factors are the building blocks to your business, there is still one defining feature you need for sustainable success, a soul. As BCG outlines, “The heart—and soul—of any company is, or ought to be, defined by its relationships with its key stakeholders. Here’s a checklist of the things you should be doing and the stakeholders you should be focusing on. And if you’re not doing these things and focusing on these stakeholders, you should start doing so now:
- Providing a sense of mission for your employees; offering them ample development opportunities
- Satisfying the needs of your customers; providing the right mix of quality, value for money, and attentive service
- Developing an effective and efficient bond with your suppliers; focusing on costs and cooperating on everything from R&D to assembly
- Creating value for investors, whether as a growth stock or a value stock; attracting continuous investment to finance ambitious strategies
- Being a good citizen in the communities where you operate; applying world standards or becoming a multi-local champion
“Your domestic market is not sacred, either. In today’s globalized world, staying loyal to the place where your company was born could be a fatal mistake,” but investing in your company’s culture, its soul, can make all the difference.