RAISE the bar: Sustainable enterprises reflect a new mindset

As innovation and new technologies accelerate every year, organizations need to sharpen their focus and embrace a new mindset if they want to flourish in this new competitive business environment.

There has been plenty of publicity about companies that have perished under a “business as usual” attitude, paying the ultimate price for ignoring disruptive change.

The key to creating sustainable enterprises – organizations that flourish in today’s landscape – is to embrace a brand-new mindset. 

Admittedly, change is hard. Letting go of an outdated outlook requires a couple of things: an acknowledgment that the ground is fundamentally shifting and; critically, a commitment to finding a new way forward. CPAs, and the organizations they support, can sharpen their focus on the endgame by asking some important questions.

1. How resilient is our business? In its current state, can it survive today’s barrage of change?
2. How adaptable is our strategy? Is it agile enough to respond to changing market conditions?
3. How innovative is our culture? Do we actively support the birth of fresh ideas? 

CPAs coined the term RAISE to reinforce the concept (posing it an equation is a natural for us).

Diagram that reads raise: Resilience + Adaptability + Innovation = Sustainable Enterprises

I spoke with Davinder Valeri for additional insight on RAISE. She leads the team at CPA Canada that conducts research and develops thought leadership in this area.

Gord Beal: Sustainable enterprise is a term we hear a lot about – but give us a sense of what it means specifically.

Davinder Valeri: The term “sustainability” is often seen as relating to environmental issues and corporate social responsibility. Not to take anything away from that, but our view of the term sustainable enterprise goes beyond this definition. Sustainable enterprises are forward-thinking organizations that consistently consider the big picture. They absolutely understand how environmental well-being underpins their own future and that of their stakeholders, and they act accordingly. But, they are just as attuned to other factors affecting their ability to maintain and grow their markets, such as technological, social, regulatory and economic factors.

Sustainable enterprises recognize there is no true finish line. Their leadership commits to a continuous state of external review and internal refinement, strategically preparing themselves to pivot – or even leapfrog – in response to potential obstacles and opportunities. Most important, they take the long view.

The first element in the RAISE approach is resilience. Give us some context on what that means in a business context.

Resilience comes from an organization’s ability to do two things well. The first is all about risk. Identifying, measuring and managing risk – so nothing comes as a surprise.  The second is to build the capacity, whether human, financial or technical, to recover when things do, inevitably, go sideways. Simply put, resilience is about an organization’s ability to protect and recover.

And adaptability?

This is a key piece – it refers to an organization’s ability to learn and respond. It’s the process of adjusting to internal and/or external change by altering routines and practices in a timely way. Ask questions, challenge the status quo, accept multiple perspectives.

Adaptive organizations look for ways to be more agile and flexible in their thinking and strategies. They often adopt a fluid, decentralized structure that creates high levels of autonomy and empowerment at all levels. They put appropriate decisions closer to the customer, creating market responsiveness. Another important feature of adaptive organizations is the capacity to rapidly learn, unlearn and relearn in response to market fluctuations and other changes.

And the final piece in the RAISE equation – innovation.

We see innovation as an organization’s ability to reframe and transform. Can it view itself and its industry from an external point of view, such as through the eyes of customers and competitors? Can it embrace the need to develop and use potentially revolutionary concepts to create sustained value? Are its employees mobilized to contribute and embrace new ideas?

Let’s talk about the role CPAs play in all of this. How can accountants make a difference?

I’ll give you one example. CPAs are experts in analyzing complex data to accurately understand the story behind the numbers. This makes us well suited to kickstart an evidence-based conversation about sustainability in our organizations. Those of us who can expand our focus from measuring and reporting on historical performance to include real-time, forward-looking data will be instrumental in the operational and strategic decision-making that’s needed for organizations to stay ahead of change and secure their future.

And finally, any recommended reading?

CPA Canada offers some great resources on this topic – most of them are available as free downloads. Also, the World Economic Forum provides some great contextual information about the breadth of change in what is being called the Fourth Industrial Revolution. Seth Godin’s podcast on how systems have changed our world is an interesting 20-minute listen. And, for inspiration, The Globe and Mail ran a great story about two Canadians who  won a prestigious international award for their ground-breaking work in artificial intelligence.

KEEP THE CONVERSATION GOING

What are the attributes of a resilient, adaptive, innovative, sustainable organization? What are you doing to make your organization more adaptive to the challenges and opportunities in today’s changing environment? Post a comment below.

 

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Gord Beal, CPA, CA, M.Ed.

Vice-president, Research, Guidance and Support, CPA Canada