A recent survey published by Boston Consulting Group and MIT revealed that there is no single, established definition for sustainability. Some companies engaged in sustainability focus solely on environmental issues while others include economic, stakeholder, and governmental issues. The study also revealed that although companies differ in their definition,sustainability is a force to be reckoned with and is a concept that is here to stay. (The Business of Sustainability, 2009, Boston Consulting Group)
In our research, sustainability emerged out of the concept of “going green.” Because of outside pressure from the community and special interest groups and in an effort to meet new regulatory requirements, some industries were forced to change how their processes and products impacted the environment and people. Even through the last 18 months of economic challenges, sustainability has not gone away. Companies have been forced to remain in compliance while figuring out how to make progress with less capital and resources. Therefore, we can assume sustainability is more than just going green … although being green is a big part of it.
Its about Business
To senior management, the question is, what does sustainability mean to your business? Leadership teams often lack a full understanding of how to apply the concepts of sustainability to the context of their strategic plan, their operating processes, their employees’ attitudes and skills, and their stakeholders concerns. In our experience, the successful implementation of sustainability will have a measurable and positive impact on the planet, through their people, and the result is improved profitability. Therefore, it is highly likely that sustainability will be defined conceptually as a megatrend, which applies equally to all types of organizations. Organizations that have defined what sustainability means to their business and who have a successful implementation model are seeing significant benefits. Based on the success of early adaptors, sustainability has proven to provide a sound business case of creating value through innovation and employee involvement.
Most organizations need to be presented with measurable reasons why embracing or incorporating a new strategy like sustainability makes sense. Early adaptors like WalMart, IBM, Nike, and GE are measuring value in key business areas. It is our experience that similar outcomes are just as possible in the small and mid-size markets.
The Business Benefits have been shown to include:
- A Stronger Brand
- Greater Pricing Power
- Greater Operational Inefficiencies
- More Efficient Use of Resources
- Supply Chain Optimization
- Enhanced Ability to Enter New Markets
- Enhanced Ability to Attract, Retain, and Motivate Employees
- Increased Customer Loyalty
- Reduced Environmental Impact
- Improved Innovation
In our experience, an organization should not tackle sustainability overnight without first understanding its strategic intent and developing a sustainability implementation plan. It’s not difficult, but an organization needs to understand what it is doing, why it’s doing it, and how it’s going to measure it. Most importantly what sustainability requires is, first and foremost, commitment from the leadership of the organization. “You cannot implement these kinds of programs bottom-up, it’s impossible. It’s always top-down, always. Because it is a cultural change, you cannot do it organically.” Georges Kern, CEO, IWC
After commitment is established, sustainability needs to be defined for your organization. What outcomes do you want to accomplish in what time frame? How will you measure the outcomes? How will you communicate your plan and establish buy-in with your employees and other stakeholders? These questions are important and need to be addressed before implementation begins. The answers to these questions need to be laid over the existing strategic plan. Do these new objectives require any course corrections? If your organization does not have an existing strategic plan, it will be critical to develop one that includes sustainability, as sustainability is not a strategic plan in of itself. Another often over-looked requirement is structure. Since many of the sustainability initiatives require interdepartmental cooperation there needs to be a systems linkage in both innovation and tactical implementation.
As evidenced by the research, sustainability is not going away. If your organization recognizes this fact and positions itself as a sustainable organization you will have a sizable competitive advantage while also improving our planet.
Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in business and management consulting, strategic planning, leadership development, executive coaching and youth leadership. For more information visit www.resourceassociatescorp.com or contact RAC directly at 800.799.622