Implementing sustainability practices in a smaller company is simple, right? No! According to the current findings of Sustainability4SMEs’ research - the largest SME-focused sustainability research effort to date in the United States - SMEs confront numerous barriers when it comes to sustainability.
A firm, or a group of people within it, may have heard about sustainable business as a way to drive cost reductions, innovation and improved financial performance. But once they start looking into it they often run into what seem to be insurmountable difficulties. Our survey queries respondents who have not embarked on a sustainability initiative in order to identify the hurdles and barriers that stymied their initial efforts.
Sustainability4SMEs asked about barriers for several reasons. First, there is an opportunity for sustainability information sources (like those discussed in a previous post) to do a better job of helping local businesses overcome these barriers if they understand precisely what barriers the SMEs are facing.
Second, the question permits these obstacles to be divided into internal and external barriers. Business leaders typically learn best from the experiences of peers and competitors. Industry-specific sustainability case studies and success stories are therefore a powerful way to show how other SMEs have overcome barriers and challenges inside their organization, and to demonstrate and quantify the economic value that makes the business case for adopting sustainable practices. Where the barriers are external, a collaborative effort from the SME community, the local chamber of commerce, a specific trade association or some other trusted advisor will generally be the best way to overcome them.
The question was also asked to assess the role sustainable practices might have on other business processes. Business processes are designed for maximum efficiency and flow. Changes in one area of the company have a high probability of impacting other business processes up or downstream. If that happens, the economic value of implementing a particular sustainable business practice may or may not generate an overall positive impact. The question was asked in part to establish if this is, in fact, a problem.
As the graphic below shows, the top two hurdles – each identified by 35-percent of the respondents - are: Lack of information on how to implement and Initiatives interfere with other business processes.
Lack of information on how to implement sustainable or green initiatives is a hurdle we expected to see. It suggests there is a major opportunity for those trusted advisors, local chambers of commerce, and industry associations to add significant value to their messaging, newsletters, and sustainability education efforts. Our previous post listed the organizations that SMEs most often turn to for this type of support and advice.
The Process Interference response was anticipated, but it is surprising to learn that it is one of the most critical barriers to sustainable business for SMEs. One possible explanation may be that SMEs start by exploring sustainability initiatives that are too ambitious in scale or scope, thereby creating operational disruption across multiple functions in the organization. Case histories tend to show that the most successful sustainable business strategies start with simple, low cost efforts that yield quick benefits with a high ROI. Larger initiatives follow from these early successes. In any case, this finding strongly argues the need for a systemic approach to planning sustainability initiatives.
The second set of most frequently cited responses, noted by 23-percent of the participants, include: "employee apathy," "upstream supply chain unable to support," and "initiative was too expensive to implement."
Overcoming employee apathy requires demonstrating to employees the business, community, and personal value of implementing sustainability-focused changes. Once employees are onboard with the sustainability concept, they often become a fountain of related ideas that benefit the firm. Employee education is an iterative process, but in the long run it proves immensely valuable in terms of employee retention and engagement.
The response "upstream supply chain unable to support" demands that the company evaluate its supplier options. If that has not been done in the past two or three years, it may be time to explore what other vendor choices are available that better meet the company’s overall sustainability goals and objectives.
The response "initiative was too expensive to implement" is closely related to "lack of information" and "interferes with other business processes." It indicates either that the company has already implemented the low-hanging fruit opportunities, or has not built a systemic sustainability roadmap that builds on preceding successes.
The goal of this research is to build these roadmaps, by industry vertical, to help companies leverage the easiest opportunities first and proceed from there. The money saved through energy, water, employee and other resource efficiencies should be able to cover most or all of the costs associated with the next initiative. If you are an SME business leader, participate today by clicking on the survey link here.
Check back soon to read our next post on who are the primary drivers of sustainability initiatives within SMEs. Meanwhile, share your thoughts on this post and explore Sustainability4smes’ web site.
Sustainability4SMEs: Graham Russell & Martha Young
Graham Russell brings 25 years of CEO experience in the environmental services industry to his current role as a sustainability professional. He currently teaches sustainable business in the University of Colorado, Denver MBA program and chair’s the School’s Managing for Sustainability Advisory Council. He provides sustainability and cleantech consulting services to SMEs through TrupointAdvisors and is on the board of the International Society of Sustainability Professionals.
Martha Young has been an industry analyst and writer for 20 years. Her expertise is in small and mid-sized businesses, information technology and energy. Young co-authored four books on virtual business processes (cloud computing), and project management for IT. She is on the board of two small Texas-based businesses, and acts in a technical advisory and business strategy capacity for an east coast venture capitalist.