Business strategies

The concept of sustainable development has received growing recognition, but it is a new  idea for many business executives. For most, the concept remains abstract and  theoretical.  Protecting an organization’s capital base is a well-accepted business principle. Yet organizations do not generally recognize the possibility of extending this notion to the world’s natural and human resources. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises. And for that to happen, the concept must be articulated in terms that are familiar to business leaders.

The following definition is suggested: For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. This definition captures the spirit of the concept as originally proposed by the World  Commission on Environment and Development, and recognizes that economic  development must meet the needs of a business enterprise and its stakeholders. The latter  include shareholders, lenders, customers, employees, suppliers and communities who are  affected by the organization’s activities.  It also highlights business’s dependence on human and natural resources, in addition to  physical and financial capital. It emphasizes that economic activity must not irreparably  degrade or destroy these natural and human resources.

This definition is intended to help business directors apply the concept of sustainable development to their own organizations. However, it is important to emphasize that  sustainable development cannot be achieved by a single enterprise (or, for that matter, by  the entire business community) in isolation. Sustainable development is a pervasive  philosophy to which every participant in the global economy (including consumers and  government) must subscribe, if we are to meet today’s needs without compromising the  ability of future generations to meet their own.

A business strategy describes how a particular business intends to succeed in its chosen market place against its competitors. It therefore represents the best attempt that the management can make at defining and securing the future of that business. A business strategy should provide clear answers to the questions:

• ·         What is the scope of the business (or offering) to which this strategy applies?
• ·          What are the current and future needs of customers and potential customers of this business?
• ·       What are the distinctive capabilities or unique competence that will give us competitive advantage in meeting these needs now and in the future?

·         What in broad terms needs to be done to secure the future of our business?

These questions should have been addressed during the process of strategy formulation. The processes and techniques and processes described in Part III may have contributed to answering them. In this chapter, we are concerned with some of the practical issues that arise when thinking and analysis leads into action and commitment. We are concerned also with what makes the difference between good and indifferent business strategies. We suggest that a good business strategy will meet six tests of quality:

• ·         It will be correctly scoped.
• ·          It will be appropriately documented.
• ·         It will address real customer needs.
• ·          It will exploit genuine competencies.
• ·          It will contribute to competitive advantage.
• ·          It will lay the ground for implementation.

Business books

So every year, we look for nominees in unexpected places. We carefully select reviewers, like O’Toole, who have a wide range of experiences and perspectives, who are willing to look far and wide for the ideas and stories that executives will find most relevant to their work and their thinking. One theme running through all the essays this year is the presence and power of human behavior in business, especially in the executive suite. Economist Diane Coyle notes that the subject of her choice for the best book on capitalism — the infamous economist Joseph Schumpeter — appreciated that the economy represents “a human order with social, political, and cultural implications.”

Futurist Howard Rheingold selected three books this year on behavioral theory. They present provocative views on the ways in which network information technologies — the Internet, mobile phones, PDAs, and the like — are changing the behaviors of billions of people around the world. In reviewing the best books on human capital, R. Gopalakrishnan, executive director of the Indian multinational Tata Sons, deftly relates his observations to his own experiences managing people and watching others do it, too. MIT’s Michael Schrage and journalist Tom Ehrenfeld highlight the importance of humility to innovation and entrepreneurship, respectively. The essay by science and health-care expert Joe Flower exposes the human hopes and fears raised by the risky business of biotechnology.

Of course, our list of the year’s best business books is not complete without a selection on strategy and competition. This year, David Newkirk — the head of executive education at the University of Virginia’s Darden School of Business — has selected five of the best guides in print for helping executives redirect their companies in an ever-changing world.