As individuals, we want to do the right thing – but as businesses, we are challenged by the need to be profitable. The goal of sustainability is to accomplish both: to improve profitability today, while not compromising the environmental and social constraints of the future. As discussed in a previous post, Doing the right thing in business: Are you doing it right?, businesses must treat sustainability as a strategic opportunity, and move beyond eco-efficiency to achieve this greater goal.
Here’s how you can get started…
Sustainability as a strategic opportunity requires businesses to design and build a management infrastructure that can support business transformation. So, what does that really mean? Well, sustainability, when properly implemented, can (and probably will) change or transform many aspects of your business. To effectively manage this transformation, skilled managers and proper tools must be put in place to guide the process smoothly. This “infrastructure” will guide your organization through the sometimes-rocky process of transforming to a new, more sustainable model.
It may sound mundane, but this stuff is important. Just consider how some companies have failed to quickly adapt to industry evolutions in the past — look at GM and fuel efficiency, for instance, or newspapers and the Internet. Having the right infrastructure in place during these periods of intense transformation is often the differentiating factor between market leadership and obsolescence.
But what does an effective infrastructure for sustainability transformation look like? Some key components include:
- Clear goals and communication from executives
- A governance model that has executive oversight and guidance
- Streamlined processes and continuous improvement
- Sustainability performance transparency, on both internal and external metrics
- Training and change management programs that engage and empower employees and other stakeholders
As your business increases its commitment to sustainability, a well-designed management infrastructure will enable your business to smoothly transform into one that is more sustainable and more successful. Without the proper infrastructure, a business may not be agile enough to stay ahead of dynamic market changes.
To facilitate the design and building of this infrastructure, we have developed a Sustainability Management Maturity Model (SM3), which allows organizations to assess how ready their existing infrastructure is to address business sustainability challenges. It tells them where they are today – and provides a process to chart a clear path to where they want to be tomorrow. The model has five levels of maturity:
- Business as Usual: the company has some awareness of sustainability concerns, but is not currently doing anything to address them.
- Ad Hoc Response: the company is starting to respond to questionnaires from customers and/or NGOs, but does not have a formal sustainability function.
- Plan and Pilot: the company has created a sustainability department, which has started to plan and pilot some eco-efficiency projects.
- Operationalize: the company’s lines of business have taken ownership of sustainability initiatives, and have started to leverage sustainability to extend their products and services portfolio.
- Transform: the company has a system-wide sustainability mandate that is fully integrated into all aspects of the business; the resulting transformation creates clear competitive differentiation.
To begin using the model, we recommend that organizations look at how mature they are on the five traditional management components:
For instance, to what extent is your sustainability strategy baked into your business model and marketing message? Do your operations management systems track sustainability data? Is the organization set up to process sustainability feedback and issues? By answering these types of questions, organizations can first benchmark their overall sustainability management maturity, and then develop a roadmap for moving to the next level – and ultimately to achieving the level of business sustainability transformation that makes sense for the company.
At the end of the day, a business’s level of sustainability maturity is dependent on its aspiration to do the right thing – and its skill at doing it well. So why not start out doing things right, by treating sustainability as a strategic opportunity and developing a plan to transform? A good first step is to figure out what level you currently are on the SM3 (or a similar model), and make a plan to progress from there.
So, at what level of maturity is your company?
FairRidge 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 Wirtschaftsuniversit√§t Wien.