Building an Adaptable Business Framework

In today's rapidly evolving business landscape, executives must differentiate between the unchanging foundations that define their organization and the dynamic elements that require continuous adjustment. This distinction—between strategic constants and strategic variables—forms the structural framework upon which successful enterprises are built and sustained.

THE DUALITY OF STRATEGIC ARCHITECTURE

Strategic constants represent the enduring, non-negotiable elements of an organization's identity and purpose. They serve as the gravitational centers that ensure organizational cohesion, regardless of market turbulence. In contrast, strategic variables encompass the tactical and operational components that must adapt in response to competitive pressures, technological disruptions, and shifting consumer preferences.

The mastery of this duality—understanding what to preserve and what to transform—distinguishes resilient organizations from those at risk of obsolescence. As former Novo Nordisk CEO Lars Rebien once stated, "Long-term sustainability requires knowing which core values are sacred and which operational strategies must continuously evolve."

STRATEGIC CONSTANTS: THE ORGANIZATIONAL BEDROCK

Strategic constants function as the corporate genome, encoding the organization's fundamental purpose and principles. These elements resist the gravitational pull of short-term market fluctuations and remain relatively stable across business cycles.

Core Purpose and Mission

Consider Novo Nordisk's unwavering commitment to diabetes care and chronic disease management. Despite numerous opportunities to diversify beyond these therapeutic areas, the Danish pharmaceutical giant has maintained focus on its core mission of "driving change to defeat diabetes and other serious chronic diseases." This strategic constant has guided R&D investment, acquisition strategy, and global expansion while maintaining coherence across its business portfolio.

Another example in this category is Amazon's unwavering commitment to customer centricity. Even as it evolved from an online bookstore into a global technology giant, CEO Jeff Bezos maintained that "customer obsession" would remain a constant. This strategic focus has fueled Amazon's growth in various markets while ensuring coherence across its business portfolio.

Foundational Values and Ethics

The Grundfos Foundation, established by the Danish pump manufacturer Grundfos, exemplifies values-based strategic constants. Founded on the principle that "the world's water challenges need new solutions," Grundfos has upheld water conservation and sustainable water management as non-negotiable principles guiding product development, manufacturing processes, and corporate philanthropy. During the 2015 European refugee crisis, these values influenced the company's decision to provide water purification systems to refugee camps, demonstrating how profoundly these constants affect decision-making even in unprecedented circumstances.

Core Competencies

LEGO has consistently prioritized creativity, child development, and manufacturing precision as strategic constants throughout decades of market evolution. The Danish toy company's commitment to these fundamentals remained steadfast, even during its near-bankruptcy in the early 2000s. Rather than abandoning these constants, LEGO's turnaround strategy focused on realigning variable elements—such as its product portfolio, distribution channels, and digital strategy—while reinforcing its core competencies and values.

Another global company that rigidly focuses on its core competencies is LVMH. The company maintains craftsmanship and exceptional quality as strategic constants across its diverse luxury portfolio. Regardless of fashion trends or economic conditions, these fundamentals remain non-negotiable for brands like Louis Vuitton, Dior, and Tiffany & Co. This unwavering commitment to excellence acts as a competitive moat against market entrants trying to capture a share of the luxury market.

STRATEGIC VARIABLES: THE ENGINES OF ADAPTATION

While strategic constants ensure stability, strategic variables foster organizational agility and market responsiveness. These elements need to be continuously assessed and adjusted according to shifting market dynamics.

Business Models and Revenue Structures

Ørsted's transformation from Danish Oil and Natural Gas (DONG Energy) into a global renewable energy leader illustrates the reconfiguration of strategic variables. While keeping its strategic constant of energy production, the company divested its oil and gas assets. It redirected capital toward offshore wind development—fundamentally changing its business model, revenue structure, and environmental footprint. This strategic pivot represented the most significant transformation of an energy company in European history while maintaining the company's core identity as an energy provider.

Market Positioning and Competitive Stance

Maersk, the Danish shipping conglomerate, demonstrates how strategic variables require continuous recalibration. Initially positioned as a diversified industrial conglomerate with interests in shipping, retail, and energy, Maersk recalibrated its strategic focus to become an integrated container logistics company. Under CEO Søren Skou, the company divested its energy businesses and retail operations to concentrate resources on end-to-end logistics solutions. Each transition represented a strategic variable adjustment while maintaining the strategic constant of global trade facilitation.

Operational Models and Resource Allocation

Volkswagen's production strategy exemplifies strategic variability within constant parameters. While maintaining strategic constants of German engineering excellence and manufacturing precision, VW continuously recalibrates operational variables such as platform architecture, powertrain technologies, and manufacturing footprint. The company's recent €89 billion commitment to electric vehicle production represents a massive strategic variable adjustment within the framework of unchanging quality standards and brand positioning.

MANAGING THE CONSTANT-VARIABLE TENSION

Effective executives establish governance mechanisms that distinguish between constants and variables while enabling appropriate decision velocity for each category.

Temporal Horizons and Decision Rights

Constants typically require board-level oversight and infrequent evaluation—perhaps biennially or during significant leadership transitions. Variables demand more distributed decision authority and frequent recalibration, often quarterly or in response to market triggers.

Danfoss, the Danish industrial manufacturing company, illustrates this bifurcated governance approach. The company's Core & Clear strategy establishes strategic constants around engineering excellence, sustainability, and digitalization. Meanwhile, geographic expansion priorities, acquisition targets, and manufacturing capacity function as strategic variables with more distributed decision rights and frequent reevaluation cycles.

Measurement Systems and Success Metrics

Constants and variables necessitate distinct measurement approaches. Constants typically align with lagging indicators and long-term value creation metrics, while variables correlate with leading indicators and short-term performance measures.

Carlsberg Group's Together Towards ZERO sustainability program demonstrates this measurement duality. The program's foundational environmental objectives—zero carbon footprint, zero water waste, zero irresponsible drinking, and zero accidents—represent strategic constants measured against 2030 targets. Simultaneously, the company's brand portfolio management, brewing technologies, and route-to-market strategies function as strategic variables assessed against quarterly and annual performance metrics.

CONSTANTS AND VARIABLES IN SYMPHONY

The most sophisticated organizations recognize that constants and variables exist not in isolation but in dynamic interplay. Strategic constants provide the criteria against which variable adjustments are evaluated, while strategic variables create the adaptive capacity necessary to sustain and reinforce constants.

The European automotive industry's transition to electric vehicles exemplifies this integration. Companies like Volvo maintain strategic constants around safety, sustainability, and Scandinavian design while fundamentally recalibrating strategic variables such as powertrain technologies, supply chain partnerships, and capital allocation models. Under CEO Jim Rowan, Volvo has committed to becoming a fully electric car company by 2030 while upholding its decades-long commitment to safety innovation—demonstrating how constants and variables can evolve in synchronized harmony.

CONCLUSION: THE EXECUTIVE IMPERATIVE

Identifying strategic constants and variables is arguably the most critical executive function for today's C-suite leaders. This requires intellectual clarity to distinguish between essential and situational elements, courage to defend constants against short-term pressures, and flexibility to adjust variables in response to emerging realities.

In an age of accelerating disruption, organizations that master this duality—preserving what must endure while transforming what must evolve—will not only survive but also define their industries for generations to come. As leaders navigate increasingly complex decision landscapes, the strategic constants-variables framework provides both conceptual clarity and practical guidance for sustainable value creation.

KEY TAKEAWAYS

• Strategic constants provide organizational stability and identity preservation across market cycles, as demonstrated by Novo Nordisk's unwavering focus on diabetes care despite numerous diversification opportunities.
• Effective strategic variables enable market adaptation without compromising organizational identity, exemplified by Ørsted's transition from fossil fuels to renewable energy while maintaining its core purpose as an energy provider.
• European companies, particularly those in Scandinavia, demonstrate a disciplined balance between constants and variables. They often maintain a decades-long commitment to core values while undertaking substantial business model transformations.
• Governance structures must differentiate between constants and variables, with constants requiring board-level stewardship and infrequent evaluation, while variables demand distributed decision rights and frequent recalibration.
• Measurement systems must align with the distinct nature of constants and variables. Constants are evaluated against long-term, often non-financial metrics, while variables are assessed through more immediate performance indicators.
• The most sophisticated organizations recognize the symbiotic relationship between constants and variables. They use constants as decision criteria for variable adjustments and leverage variable evolution to reinforce and sustain constants.
• Executive leadership requires both philosophical clarity to identify true constants and operational flexibility to continuously recalibrate variables against changing market dynamics.