THERE IS CONSIDERABLE BUZZ NOWADAYS about sustainable business performance. It is frequently held up as the Holy Grail of business strategy. Thought leaders in various fields of endeavor write and talk about sustainable success, sustainable performance, etc. as the ultimate goal for business organizations. So what is this “sustainable” business performance all about? Is it just some clever re-packaging of aging concepts, meant to stimulate post-modern thinking, or is there something genuine worth embracing?

At the risk of oversimplifying, there are three strategic domain levels.

The world of certainty
This is the domain that can be directly affected and managed by the company. The company’s own business processes, cost structure and management style are carefully scrutinized and re-engineered. Business strategies formulated for this domain should normally end up with the intended results as the environment within which the strategies are implemented is known and can be managed by the firm. This is the comfort zone of an enterprise. This world of certainty simply requires that we understand the organizational system dynamics and implement appropriate rules in order to end up with intended strategic results. Success in the world of certainty is all about operational efficiencies.

The world of uncertainty
Take the company's comfort zone and push its frontiers outwards to include customers, vendors, shareholders, etc. We now have a domain that is ruled by uncertainty; uncertainty, as this new domain is a network of several free-agent economic entities, each seeking to maximize their own welfare. In this domain, there is much less assurance that the company's strategies will have the intended results. However, all is not lost. Uncertainty does not mean unpredictability. Success in the world of uncertainty is all about collaborative effectiveness. Strategies that work in this domain typically build collaborative solutions across different entities, such as customers and suppliers. Shared value-creation is the mantra here!

The world of chaos
Take the frontiers in the world of uncertainty and push them further outward to include general market forces. Supply and demand forces, regulatory forces, and sector-specific cultural forces will all bring several more free-agent entities into the domain now, each acting to maximize their own welfare. We are now entering a world that is not just uncertain but chaotic. The chaotic domain cannot be modeled as a network of interconnected firms. At best, it may be a loosely defined network of networks. With companies of different natures, strengths, weaknesses and interests all simultaneously making decisions and implementing their own strategies in this world, it becomes nearly impossible to predict the state of this domain. So how does a company succeed in this world of chaos ? Well, this is where we bring sustainability into the picture.

Let us now connect these three worlds. Survival is a pre-requisite for competitive advantage which, in turn, is a prerequisite for sustainable business performance. Before getting to a sustainable business performance, a company needs to secure a strong competitive advantage. In order to have a chance at getting that competitive advantage, a company has to learn to survive short-term challenges.

Short-term business survival requires managing a business effectively to counteract short-term forces. To achieve basic business viability and survival, a company needs to be a finely designed organization incorporating all the advantages that technology can provide. Automating business processes, improving productivity, compressing cycle times, minimizing costs, removing internal barriers to efficiency, etc. are some strategies commonly used to achieve short-term survival. That is, success in the world of certainty is a must for short-term corporate survival. Unfortunately, there are firms that string together a series of survival strategies, and that is their long-term strategy!

Securing a competitive advantage requires strategies that can effectively counter today's fiercely competitive world of demanding customers and pay-me-now business partners. These are strategies that go beyond survival and call for success in the marketplace as the cornerstone of strategy rather than organizational excellence. Improved collaboration with business partners and realigning business processes around the marketplace (rather than around internal business efficiencies) are types of strategies commonly used to achieve a competitive advantage. That is, success in the world of uncertainty is a must for securing a competitive advantage. There are firms that are very market-focused and good at securing a competitive advantage, be it process, product or technology based. These are firms that have transcended survival as the basic motivation and are actively operating in the world of uncertainty. Success for these firms is to go from one competitive advantage to the next and then to the next and so on. As long as they continue operating in the world of uncertainty it will be difficult for them to realize that sustainability cannot be reduced to stringing together a series of competitive advantages.

Sustaining successful business performance requires strategies that can create equities with a “long shelf-life.” Succeeding in the world where chaos rules requires the identification of specific equities that are enduring and finding ways to create them. In a business world that is increasingly ruled by technology, where fundamental relationships are being replaced by “collaborative digital platforms,” where a customer's every whim is being attended to in the marketplace, where any technology-based competitive advantage can be instantly duplicated, where equity that took years to build can come crashing down immediately due to chaotic unpredictable factors, what kind of equity can really be sustained ? The type of equity that does not lend itself to sustainable business performance is the one whose DNA is post-modern technology. That type may appear for a time to insurmountable but will crumble rapidly in the world of chaos. Paradoxically, the type of equity that can endure in the world of chaos is the old-fashioned type based on the following tenets:

• Businesses exist to serve non-digital human needs
• No man-machine process can ever fully replace
human relationships
• Trust and integrity transcend any digital
technology in their ability to create sustainable
business performance

Business strategies are goal-oriented and, hence, are designed to achieve successful performance in a given business domain. It is all too easy to get caught in the survival or competitive-advantage domains, expending a lot of energy and resources, but not really realizing any long-term fruits. What all this comes down to is that success in the world of certainty is essential. Success in the world of uncertainty is what most good companies strive for. The great ones wrap their business philosophies around the simple tenets above to build a truly sustainable business performance.