What is organisational viability?
- Ade McCormack
- 5 days ago
- 2 min read
Updated: 4 days ago
In short
Organisational viability is the organisation’s capacity to stay ‘in play’, ie remain solvent. If an organisation is not viable it will eventually become a failed organisation. So a viable organisation is one that can operate in its environment, regardless of harshness, without suffering permanent degradation.
Why organisational viability matters
As volatility increases organisational viability becomes an important consideration. Organisational failure is nothing new. Typically this was a consequence of financial mismanagement or a failure to adapt to competition from a new entrant to the market.
These remain true but are increasingly likely to happen thanks to the increasing disruption we are experiencing today. They are now accompanied by a raft of disruptive macroenvironmental forces.
An investment signal
An organisation that appears healthy today from a profitability perspective might well become obsolete should another player decide to replicate the offering and give it away as a loss leader. Or a ‘virally boosted’ change in customer sentiment might similarly make the organisation unsustainable.
Conversely, an organisation that appears to recognise this risk and can prove that it has no single points of existential failure, eg. being a one trick pony, and has the capacity to adapt in line with an increasingly volatile market is more likely to yield a positive investment return.
The Intelligent Organisation perspective
Viability is a trait that successful living systems possess.
As an aside, whilst humans continue despite the harsh conditions they have faced over millennia, in the grand scheme, it is still too early to classify them as viable. Ants, bees, corals, sharks and jellyfish would consider humans as arrivistes.
All living systems have the capacity to sense, decide and act in real-time. Those that spot danger early, decide how to respond and act swiftly are more likely to remain viable.