Viability

An organization's capacity to maintain identity, create value, and thrive in changing conditions. Unlike performance metrics that measure past success, viability assesses whether the organization can continue to exist and adapt. An organization can show strong performance while its viability erodes.

Beyond Performance

Organizations obsess over performance metrics: revenue growth, profit margins, market share, efficiency ratios. These numbers matter, but they share a dangerous characteristic—they measure the past. By the time performance metrics decline, the underlying conditions that will cause decline have often been deteriorating for months or years.

Viability is a different lens. It asks not "How well did we do?" but "Can we continue to exist and thrive?" This shift in framing reveals problems that performance metrics hide and opportunities that backward-looking analysis misses.

A viable organization maintains coherence while continuously adapting. It preserves what makes it distinctive while evolving how it operates. It creates value today in ways that don't undermine its ability to create value tomorrow.

The Four Pillars of Viability

Viability rests on four interconnected capabilities:

Identity. Does the organization know what it is and what makes it distinctive? Can it articulate its purpose in ways that guide decisions? Organizations that lose clarity about their identity make incoherent choices, chasing opportunities that don't fit while neglecting strengths that differentiate them.

Value Creation. Does the organization create value that someone wants enough to sustain the organization's existence? This seems obvious, but organizations can lose touch with whether their value proposition still matches what their environment needs.

Adaptation. Can the organization sense changes in its environment and respond appropriately? Not just react to crises, but detect shifts early and adjust before being forced to. Adaptation requires both sensing capability and response capability.

Sustainability. Does the organization operate in ways that can continue? This includes financial sustainability, but also human sustainability (can people maintain this pace?), relational sustainability (are we burning bridges?), and environmental sustainability (are we depleting resources we depend on?).

The Viability-Performance Paradox

Organizations can show excellent performance while their viability erodes. This happens when:

Optimization extracts future value. Cutting R&D, reducing training, deferring maintenance, or squeezing suppliers can all boost short-term performance while degrading long-term capability.

Success breeds rigidity. The practices that created past success become so embedded that the organization can't adapt when conditions change. Performance looks strong right up until it collapses.

Metrics lag reality. Financial results reflect decisions made months or years ago. By the time results decline, the window for easy correction has often closed.

The inverse is also true: organizations can show poor performance while building viability. Investments in capability, culture, or market position may depress current results while strengthening future prospects.

Example: The Profitable Decline

A regional retailer shows strong quarterly results. Same-store sales grow, margins improve, and the stock price rises. Leadership celebrates operational excellence.

But a viability lens reveals troubling signals. Customer demographics are shifting—their core customers are aging while younger consumers show no loyalty to the brand. Digital capabilities lag competitors. Store managers report difficulty hiring quality staff. Supplier relationships have become transactional and brittle.

None of this appears in quarterly results. The performance metrics measure how well the organization executes its current model. They don't measure whether that model will remain viable as conditions evolve.

Three years later, the retailer struggles. What looked like sudden disruption was actually gradual viability erosion that performance metrics failed to detect.

Assessing Viability

Viability assessment asks different questions than performance review:

• What assumptions about our environment are our current operations built on? Are those assumptions still valid?
• Where are we seeing weak signals that conditions are shifting?
• What capabilities are we building or losing?
• How would we know if our value proposition was becoming less relevant?
• What would make us unable to adapt if we needed to?

These questions feel uncomfortable because they challenge success narratives. But organizations that can hold this discomfort gain earlier warning of viability threats and more time to respond.