cover photo Reflect Blog
Ingo Kallenbach

Can a "healthy" strategy really be economically successful?

A key factor for our concept of a "Healthy Organisation" is a healthy strategy. We have laid out this concept in detail on our Reflect Day (see our note on the Reflect Day). According to our opinion, an organisation can only be really healthy if the targets associated with the strategy take into account the financial success as well as the responsibility towards employeescustomers,society and the environment; responsibility also regarding work conditions, the respectful handling of natural resources or social interests. Many companies try hard in this respect - more or less seriously, more or less successfully. How can a healthy balance thus be achieved? One that guarantees the profit of the business while simultaneously protecting the ecological and social interests of the respective stakeholders? Leaving aside the more common methods, such as the avoidance of inappropriate incentive systems (key word: management remuneration), a rather long-term strategic orientation instead of permanent pressure due to short-term investments, or the inclusion of ecological investments (e.g. co2 emissions), there are only little reliable models left for various branches and markets.  


Fig. 1: Healthy Organisation - healthy strategies lead to economic success

An interesting approach is being pursued by the two Harvard scientists Eccles and Serafeim (see HBR 10/13). They have provided the classical dimensions, namely environment, social capital, human capital, business model & innovation, and leadership & governance with 43 criteria by means of which they can evaluate the effects on business success. Consequently, taking as an example a company from the health sector, one can expect waste and waste water management to have a significantly higher positive effect on the financial success of the company than e.g. management remuneration (by a factor of 3).  
The interesting aspect of this approach is that respective strategies can lead e.g. to production innovations that in turn could be put on the market generating profits. Should companies have a long-term interest to grow in a balanced way without suffering financial losses, we believe that such a procedure is definitely worth considering and very promising.