Businesses must analyse their impact on the wider world before they are able to build a successful strategy for the long term, according to a report.
In the wake of Blockbuster, HMV, Jessops and other businesses that failed to adapt fast enough to new market dynamics, a new study called Mastering Resilient Growth promises boardrooms that businesses can uncover powerful insights for innovation and thrive for years to come if they align their strategies with their context.
The report, authored by sustainability experts Corporate Citizenship, warns that business does not exist in a vacuum. “Context refers to the economic, social, political, technological and environmental issues that create business opportunities and risk,” the report says. “These factors have traditionally been considered as part of a limited risk assessment by most companies. But now there is a bigger opportunity.”
Corporate Citizenship contends that an analysis of relevant relationships, impacts and trends, when approached strategically and holistically, can help weather the storms of unexpected regulation, changing customer needs, fashions and desires and wider economic fluctuations.
The report points out the contrasts between this approach that it calls Resilient Growth and the “short-sighted, narrow approach” to strategic management that it says most companies adopt.
“Businesses often focus on beating their competitors by matching their activities, developing similar products through incremental improvements and delivering value through the same old business models.”
That approach is increasingly coming under threat says the study, which points out that the average lifespan of an S&P 500 company has shrunk from 61 years in 1958 to just 18 years today.
The report challenges businesses to ‘map their context’ by understanding the complex interactions of its many markets and stakeholders, analysing the market forces and influences that have the potential to impact future success and integrate this thinking into business strategy.
It cites Danone, Vodafone and Unilever as businesses that have benefitted through new products which emerged from using similar approaches to Resilient Growth.
“By being more in-tune with the world and its expectations,” the report concludes, “businesses benefit their stakeholders, society and the environment . Business can be a powerful force for social good by applying their resources strategically so as to ensure long-term profitability that is in step with society.”
To download the publication, please click here.
Corporate Citizenship is one of the longest standing specialist sustainability consultancies, working with corporations around the world to achieve their commitments to being responsible businesses, built on sustainable practices.