What does a sustainable organisation look like?
Many companies approach sustainability from the resource-efficiency angle and take a ground-up approach to reducing their impacts. In this blog Sarah makes the case for taking a strategic, holistic approach to achieve not just best in class but 'unassailable market advantage'.
The most frequent introductory question I am asked as a strategic sustainability consultant is: what on earth is that? My simple response is that I help make organisations more sustainable – which is usually met with a fractionally less blank expression than before I replied.
The problem we have, in my neck of the sustainability woods, is that most people have been led to think that the only measures of sustainability are energy/carbon and waste; with water perhaps sliding in from the wings making a more recent appearance. Yes of course it is true that understanding these impacts and reducing them is the backbone of a more sustainable business. However, trying to achieve this sequentially looking at each impact in turn, as appears to be the norm, is likely to yield fragmented and unsatisfactory outcomes in our brave new world.
The reason is that, like it or not, the resource issues we face in the coming decades will not be solved with tidy little incremental improvements. So whilst it is great to see businesses engaging with the issues, they won’t thank people like me for presenting the tasks through rose-tinted glasses. It’s tough out there and the companies that will survive and thrive are those who look at the whole business; looking at all the issues simultaneously and holistically and then developing a clear plan to resolve them in an integrated way.
To some this might seem overwhelming – so isn’t it better to look at one thing at a time and move on to the next issue? Logic might suggest yes; but here’s the rub. Let’s assume your business takes the singular approach. Let’s start with energy. We all know there are some great ‘quick wins’ to be had in areas like lighting, boilers and refrigeration. Let’s assume the estate/facilities management team put together a compelling business case for energy/carbon reduction and get Board approval to implement the changes. The Board is happy they can report some positive environmental activity and the Financial Director is pleased as the operational cost savings will make a welcome bonus to flagging profits after a relatively short pay-back period. Buoyed by their success, towards the end of the investment period, the estates team make further suggestions for more improvements. However, the payback periods are much longer and therefore look less attractive to the Financial Director, who can see a hard sell in the Board Room. So the next phase of improvements is put on hold and the environmental programme stalls.
Meanwhile, the biggest competitor has taken a different approach. The enlightened CEO, immersed in the growing evidence-base for doing ‘better business’, has decided to take a whole-business approach and brought in said ‘strategic sustainability consultant’ who can help them structure the programme across the entire business including all stakeholders to achieve: total staff engagement, estates/facilities, products/services, logistics and supply-chains. Every single area of the business is investigated with a very upbeat, can-do and positively-challenging approach. This consultant does not pretend to be an expert in the technical detail of each area; far from it as the organisations’ people and some extremely clever associates will be much better placed to develop the detail – but what they can do is help bring the CEO’s vision to life by structured and systemic adaptation within an exciting, vibrant, aspirational but wholly achievable plan.
With the full involvement of the company and supply-chain, all inspired by the CEO’s vision and the evidence that it will secure and future-proof their business, they set about defining what ‘best in class’ looks like – indeed in many areas they go beyond ‘best’ to consider disruption and unassailable competitive advantage looking at every single facet of their products, operations and business model.
They identify the ‘quick wins’ ensuring that the savings are ‘recycled’ into on-going projects which are all designed to create operational cost reduction whilst the product and marketing teams adapt the market-facing messages and set the tone for the ‘new era’. This is not done with complacency or trumpets – but with some humility and collective recognition; showing how the culmination of big ideas and little gems creates a culture of innovation and belonging deep into the organisation and its supply chain.
The company notes that the staff is more energetic and committed than ever. Absenteeism falls and staff retention increases. They have more applications to work for the business as they are seen as progressive and ‘caring’; locally and internationally their profile hits new heights and they start to win awards. Suppliers trust them and are prepared to do better deals as they feel supported and share in the new success. Customers start to use them as the ‘exemplar’ and this consolidates the relationship so more contracts follow. Each wave of improvements is accompanied by further cost reduction, increased market share and enhanced reputation making them not only a ‘better business’ in terms of impacts – but substantially reducing the competitive and market risks which faced them before the new era.
The product portfolio has been radically streamlined so that declining products have been dropped in favour of investment in new products which can be manufactured with less environmental impact whilst retaining only the positive attributes of their predecessors. The products use considerably less resources and are packaged in fully recycled and recyclable materials with considerable weight reduction which has immense savings for distribution. The estate has been rationalised with lean processes in less space and with vast improvements to the retained areas which are now low carbon and healthier, more productive spaces. The resulting overhead savings in more productive personnel alone ensure the investments are cost neutral across the estate; indeed some excess space is being sold off or sub-let to generate more investment capital to support R&D and some additional revenue to ameliorate yet more operational investments which are also funded by an ESCo-approach to energy management. The overall saving in carbon will mean massive potential savings over their baseline position in Mandatory Carbon Reporting and also safeguard their position with key customers who are all prioritising resource-efficiency in their supply-chains in order to meet their corporate goals. This is getting close to what I would call a sustainable business. It’s an ever-moving goal in many respects but replace the word ‘viable’ for sustainable and you see it is not just about the attitude to physical resources that makes the difference. The leanest company in the world could go out of business because of poor positioning.
Some might say this is a big business model; that they have the resources to set about the audacious reinvention that small businesses can only dream of. This is totally untrue however. Small businesses are only limited by their imagination as they are usually flat and lean enough to adapt very swiftly to changing opportunities. Larger businesses are often behemoths with layers of cynical management who can be more suspicious of change and less willing to adapt. So each has its challenges – but each also has the opportunity – if there is the vision to see a different future; a future which accelerates doing all the right things for the right reasons and reaping the rewards.
So if someone asks in ear-shot what on earth a Strategic Sustainability Consultant does; I hope you know the answer!