According to Rich Karlgaard, an organization must have a Hard Edge, a Soft Edge, and a Strategic Base to continually innovate, be healthy in volatile times, and enjoy lasting success. I agree. In The Soft Edge: Where Great Companies Find Lasting Success, he explains that there are five “pillars” that undergird the Hard Edge: Speed, Cost, Supply, Chain, Logistics, and Capital Efficiency.

All are obviously important but insufficient. That’s why he includes five “pillars” of the Soft Edge, a portion of the equation that tends to be neglected, if not ignored: Trust, Smarts, Teams, Taste, and Story.

Having both a hard edge and a soft edge is obviously important. However, long-term business success also requires a strategic base, one that enables a company to continually innovate, be healthy in volatile times, and enjoy lasting success.

As Karlgaard explains, the Strategic Base also has five “pillars”: Market, Customers, Competitors, Substitutes (i.e. indirect competitors), and Disruptors.

Here’s the challenge for business leaders: Find their company’s “sweet spot” at which its hard edge and soft edge become interdependent with its strategic base. Some decisions are best-made with hard-edged thinking, others with soft-edged thinking, but all decisions must directly or indirectly strengthen an organization’s strategic base. Rich Karlgaard thoroughly explains all this in The Soft Edge, published by Jossey-Bass/A Wiley Brand (April 2014). He is the publisher of Forbes magazine and author of its “Innovation Rules” column. He contends that the fundamentals of competitive advantage are changing fast. For high performance and endurance, you now need strategy & execution…and the under-recognized but increasingly vital “soft edge.” You can also check out his tweets and his website.