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The Importance of Functional Sustainability
This is my site Written by Neil Palmquist on March 26, 2013 – 7:37 am

For success in business, or any endeavor, execution is critical.  As mentioned in my STOP Changing Strategy! post…   allegedly 90% of all failed business strategies are due to a failure in execution.  In this post, I simply wish to qualify that 90% and perhaps address the entirety of the other 10%, by warning all to never forget the importance of planned functional sustainability. Simply put, those that forget to consider the viability of a strategic plan’s operations and whether it is functionally sound enough to sustain it all the way to objective completion, has truly gambled their strategy’s execution feasibility.  In short, the strategy is incomplete.

Predominantly, I see this when businesses fail to incorporate “capital structure” into their business plans and strategy.  Companies that do not plan for growth and changing capital structure requirements as their financing needs change, hamper their abilities to execute any strategy right from their onset.  Labor, materials, and/or any other resource, stakeholder, or variable integral for a plan’s execution must also be taken into account.

For most business ventures, the functional sustainability of a plan must be assessed in terms of perpetuity or at least until a planned change in strategic operations that would require its own assessment.  For example, outsourcing manufacturing during initial growth or factory expansion needn’t be planned for into perpetuity.  However, sourcing materials for manufacturing your products should be planned for and assessed against the growing needs of the company into perpetuity, as the general end-goal presumption should be that you wish the company to survive and thrive forever; something that would be unlikely to happen without the necessary availability of materials or the capital to purchase them.

The most prominent example of a failure to incorporate a functional sustainability assessment into a launched strategy is very familiar to you all, though perhaps you have never viewed it in this capacity.  It lies with our own government and the $16.7+ trillion debt levels that we now owe due to launched initiatives made with total strategic disregard to financing them into perpetuity.  This is not a statement against the moral appropriateness of the initiatives themselves, so much as a condemnation of the government’s failure to plan operationally feasible programs inclusive of functional financing components that ensure their ongoing viability.

In summation, your venture, whether a two-week bake sale for funding a school trip or a new tech start-up to rival Google, must set goals and strategy that has considered functional sustainability.  Once assessed and amended, execution of your now complete strategy should be your focus.

Best of luck.

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