Disruptions are inevitable. They can come from unexpected corners and wreak havoc on even the most stable businesses. One of the primary causes of company failures is the inability to sustain operations when 40-50% of demand is suddenly taken away. How prepared are you for such a scenario?
Stashing away cash isn’t a feasible long-term strategy. Acting strategically is the only viable option. My book, Five Horizons, provides a roadmap for navigating these challenges. Get the book or audio here: Five Horizons.
The Ultimate Sustainability Challenge
The result of being unsustainable is multifaceted and dire:
- You won't sustain competitiveness.
- You won't sustain market share.
- You won't sustain investability.
- The best employees will leave.
Your competitors, customers, and investors are acutely aware of these vulnerabilities. They know that 40-50% of demand can either disappear or shift to another provider.
Learning from Global Events
Consider the strategic moves of Russian Oil Inc. The geopolitical tensions surrounding Ukraine are not just about territorial control but also about securing oil and gas reserves. This image shows the map of oil and gas reserves in Ukraine. It is evident that these reserves are a significant factor in Russia's military actions.
To a ‘country CEO,’ an oil and gas field as extensive as Norway's, right next door, poses a strategic threat to revenues and market share. Russia’s ability to sustain its market dominance in oil and gas would collapse if Ukraine and the West exploited these reserves.
Coincidentally, the areas targeted by Russian military actions are rich in oil and gas. In the west, areas populated by Hungarian speakers also possess these resources. Hungary's Orban is strategically gazing east, eyeing the potential to carve up Ukraine based on language and ethnicity.
Strategic Planning: A Lesson in Survival
While the West attempted to secure drilling rights through alliances, Russia moved swiftly with an aggressive takeover. This desperate strategy has led to a complex and messy situation, but it highlights the lengths to which entities will go to secure their survival.
We've seen this before. The lesson is clear: plan now, plan well. Strategic planning must be proactive, not reactive. Engage with experts and leverage resources to build a robust strategy.
The Five Horizons Approach
In the realm of double materiality, explore the five horizons of value chains beyond your own. Listen to outliers among stakeholders to identify future differentiation opportunities. Make decisions based on these insights across five time horizons from now.
Prepare for the next Great Shift. Tipping points are nearing, and only through strategic foresight and planning can businesses hope to survive and thrive.
Plan now and ensure your business is resilient against the unthinkable. Get expert help here: Five Horizons Consultancy.