- April 30, 2020
- Posted by: fedefiore
- Category: Blog
This moment in history can represent the kick-off of a completely new, exciting age, if we get the message from planet Earth and accept the challenge of a paradigm shift. Here is the fourth article of 5, with a much requested “to do list” for my readers.
Part Four: Priority Actions
This further article in the post Covid-19 Dawn of a New World series, outlines the key actions that entrepreneurs and managers must take to integrate sustainability into their business models, strategies and operations to survive the ongoing transition successfully. I emphasize the entirely intentional combination of the words “survive”, because it is a matter of survival, and “successfully”, because it is a matter of thriving in the new paradigm for companies that will be capable to change radically.
The following list also indirectly outlines the essential behaviors of the management of the new Era, without which “heads” of companies will only be able to be their gravediggers, more or less quick, and accompany their organizations to bankruptcy.
Here are the priorities (internal order of the list variable according to individual cases):
- Assess the impacts of the company’s activity on Climate Change (i.e. with tools such as calculating the carbon footprint of the activity from an LCA perspective) and on Stakeholders (including the environment, also from an LCA perspective). Especially for subcontracting companies, the reflection must be made from an entire supply chain perspective; it will not always be a simple task. In any case, it has to be done;
- Evaluate the initiatives required to integrate objectives such as Science Based Targets (as a minimum requirement) in the strategic objectives of the company and establish milestones and KPIs, with clear indication of responsibilities and resources. The medium-term objectives must be carbon neutrality and circularity by zero waste processes;
- Analyze the company’s activity from the point of view of the SDGs (United Nations Sustainable Development Goals) and their 169 targets: check out how your organization can REALLY AND CONCRETELY contribute and how? What objectives’ achievement are you hindering with your current activity? Once again, realign the strategic and operational business objectives and define milestones and KPIs, with a clear indication of responsibilities and resources;
- Monitor the regulatory environment in which the company operates in relation to the rapid evolution of this aspect of the context. To be able to determine in advance the trends in legislation, requirements from funders or markets – which will surely accelerate towards Sustainable Development and the various Green Deals under discussion – can be an important source of opportunity, whereas understanding them late can be a deadly shortcoming;
- At the same time, think in depth about what are the Basic Needs that the business exists to meet and what Needs it may harm (refer to 2nd article of th series and my book “Sustainable Leadership” for the Basic Needs theory). This activity (but not only this one) requires the active involvement, after careful mapping, of stakeholders and serves to define the necessary changes and innovations in the business model;
- In the stakeholder mapping, think in terms of possible partners to solve the impact problems: systemic thinking, synergy and collaboration are the new rules of the game. Do consider the possible collaboration with non-profit organizations and specialized research centers too, especially about social and environmental impacts;
- Cascade the objectives and KPIs across all units and processes of the company, so that every function and every level of the company knows exactly how and what it contributes to the global objectives. The achievement of the objectives must be “everybody’s job anytime”, each person must know what their every action implies in relation to the objectives in order to be able to consciously contribute to them;
- From the previous point, it follows that sustainability management becomes an integral part of the management of input and output of each process, thus it has to be integrated into process mapping; as its priority objectives are functional to the very survival of the company, the sustainability balance sheet of a process becomes a key factor in the decisions related to it;
- Reverse accountability: from the dialogue with internal stakeholders, collect indications of what they need to achieve the objectives set and keep management accountable so that they can take timely action to support their people. This inversion of traditional accountability works when objectives are motivating, engaging, shared with transparency and authenticity and therefore deeply “owned” by all people. If you don’t succeed in this, you are not a leader;
- Check communication flows and the status of internal relationships within your team and the entire organization community. Facilitate in every way the development of the human potential of your people, along with the emotional, social and conflict transformation skills so that a climate of constructive collaboration is established. Invest in education and development along with professional skills training. Improving your people’s quality of life is the basis of the trust with which they will reward you while contributing to the organization’s mission. The same is with the wider galaxy of stakeholders;
- Transform traditional Risk Management, the one based on “controls” to minimize potential damage from adverse events, into “Uncertainty Management”, i.e. all of the factors that can affect the organization’s ability to achieve its objectives. Such influence can be negative or positive and its management is completely different from the former, much better suited to “navigate” the New World and seize its opportunities. With this kind of management you will also get valuable insights on how to manage the impact of Climate Change on your business – think of those who had not considered the possible “pandemic” long anticipated by the WHO – and to seize the opportunities of the New World;
- Structure an effective knowledge management inside and outside the organization so as to constitute a milieu in which creativity and innovation are in continuous constructive ferment. Remember that it often costs more to jealously protect a know-how, which inevitably ages, than to develop more innovative and disruptive ones;
- Foster effective upstream and downstream communication throughout the Value Chain and with the stakeholder galaxy, a vital factor in the new systemic thinking. Make sure that your “reporting” is based on clear and measurable objectives, transparent, even on what didn’t work, and engaging, to elicit collaboration in achieving your goals: if you play it fair, i.e. if ethics is the guideline of your actions, all these people will feel “in the same boat” as yourself. If you don’t, you’re not a leader;
- Make sure that sustainability goals are reflected in executive and board compensation. As for the value of shares, stock market historic series show that the more the company embraces sustainability seriously, the more its share value grows beyond the benchmark. Therefore your company will automatically be attractive to investors. All the more so in the “New World”;
- Actively measure the social and environmental impacts and economic performance of your sustainability strategies to verify their effectiveness. Ensure that performance improvement is equal on all the three “pillars” of sustainability and continuous, with a PDCA approach.
The above 15 actions will lay the solid foundations on which to build the resilience of the organization at the time of Climate Change and beyond, in the profoundly changed context we will all face.
In the next article, now that I have addressed the urgency of proposing a “to do list”, we will see what the education of the new “ruling class” shall be.