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Doing the Right Thing in Business: Are You Doing it Right?

| Friday June 5th, 2009 | 3 Comments

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There is a mounting consensus that while business has created serious environmental problems, developing sustainable practices to address these issues can result in bottom line benefits. So why hasn’t sustainable business taken off like those metal Klean Kanteen water bottles?
The reason may surprise you: although most businesses acknowledge the efficiency benefits that sustainability can create, few companies are treating sustainability as a strategic opportunity. The majority of existing sustainability efforts are still ad hoc (often a reaction to external compliance pressures), poorly funded, and tactical in scope – so they rarely impact the core strategy and positioning of the business. In order to really create a sustainable future – and to reap the benefits of sustainable competitive advantage – companies must move beyond efficiencies to a more transformative implementation of sustainability. This is a challenging task, so it’s not surprising that few companies have gotten it right. The upside is that doing it well can lead to a real opportunity for competitive differentiation – one that may define winners and losers for decades to come.


There is a difference between eco-efficiency and sustainability strategy.
Okay, you finally got your colleagues to start recycling in the office, and your boss has a plan to save money and energy by turning off the lights at night. Or perhaps your fleet manager has a pilot in place to see how much can be saved by leasing hybrid trucks, and your product development team would like to use some recycled packaging materials to meet market compliance. While these are all good ideas, they are tactical in nature – none of them will truly affect your company’s strategic differentiation. Generally, these improvements are referred to as eco-efficiencies – they create savings and do well by the environment, but have zero impact on business strategy.
But sustainability can do so much more than just create savings – it can have great top line impact as well. Something like sustainability strategy is found at companies like InterfaceFLOR, TerraCycle, or even Wal-Mart. These pioneering companies have all taken sustainability to the next level, integrating it into their business plans, product development, and growth strategy. The result is that these companies all are experiencing significant top-line growth, which – in conjunction with their eco-efficiency efforts – creates serious competitive advantage.
Sound familiar?
Before getting started on your strategic sustainability program, there are some critical questions that need to be considered:
* What is your corporate vision for sustainability?
Your business will need to have a clear vision and strategy for sustainability, one that is aligned with your corporate goals and has a compelling business case. Only proper alignment will result in sustainability and business success.
* Do you have clear and measurable goals?
You will need well-defined target metrics and goals to help you realize your vision.
* Who is going to sponsor and lead your sustainability initiative?
You will need to identify and solicit executive sponsors, who not only have access to funds, but have the power and the passion to effect change.
* Who will project manage your sustainability initiatives through full implementation, and coordinate across business silos?
You will need to put in place an effective management structure that can get the job done, and allow the program to scale throughout the business.
* How will you measure the results and report on your progress?
You will need to review results as you go, and streamline internal and external processes to stay on track towards your goals. Be ready to be transparent, both externally and internally, once you have genuine and grounded improvements to share.
* How will you get all the various stakeholders on board with the program? You will need to engage and empower your employees and other key stakeholders at all levels of the organization.
And that is just for starters; these questions are just a sampling of the issues you will need to consider if you want to move sustainability beyond the tactical realm. One thing is for sure: it isn’t going to happen overnight!

***

fairridge logoFairRidge Group is a team of management, strategy, and change experts focused on business transformation through the practical application of sustainability for operational improvement and strategic innovation. FairRidge brings a new framework for sustainability management that integrates strategy, operations, branding, measurement and organizational development to drive profitable business transformation.
Geoffrey Barneby is a Principal at FairRidge Group, with 15 years experience developing strategic business solutions. Geoff holds an MBA in International Business from the University of South Carolina in coordination with the Wirtschaftsuniversität Wien.


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  • http://www.business-ethics-pledge.org Shel Horowitz

    Good post–I’m going to tweet it.
    I think you hit it dead on with “few companies are treating sustainability as a strategic opportunity.”
    Yes, the more strategic you are in your approach to sustainability, the more effective it will be, and the more the economics will work in your favor.
    BTW, I discuss strategic sustainability initiatives a bit in my award-winning sixth book, Principled Profit: Marketing That Puts People First, http://www.principledprofit.com

  • http://www.2sustain.com Tim Albinson

    Since the vast majority of a company’s carbon footprint is embedded in its supply chain, it makes sense to focus eco-efficiency and sustainability initiatives there. As is typically the case, it will prove more beneficial to be proactive rather than reactionary, and companies that scrutinize their entire value chain and come out ahead of regulations will have a competitive advantage.

  • Gabriel Cade

    The inevitability of this shift in business models seems, uhm, inevitable. Being the corporation that comes through this transition first will have it’s advantages, but any efforts in this direction will later need to be realigned with the parallel integration of new technologies and global acceptance of the importance of ecofficiencies. This will ultimately become “the norm.”
    I would be interested to hear some more direct examples of how some currently thriving companies, like WalMart, have integrated sustainability directly into their business model, rather than the piecemeal efficiencies (again, ecofficiencies).
    Thanks for the great piece. It reminds me of a prize-winning essay I once wrote.

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